Landlord-Tenant Settlement Conferences
The Indiana Supreme Court has created an opportunity for tenants to request mediation when facing eviction. Here is what we have been told by our attorney, Kathryn Ransburg of Ransburg Law:
“It’s not a mandatory program but can be requested by either party at any time during the eviction process. If you decide to participate in it, it will delay your possession hearing by at least a couple of weeks and you will not be able to ask for the attorney fees related to participation in the mediation. As always, my suggestion is to try to work with your tenants as much as possible before making the decision to file an eviction.”
Kathryn Ransburg of Ransburg Law
We will consult with the owner if their tenant makes a request to use the program. If you have a delinquency you may want to just keep this in mind in case the tenant requests a conference. We can’t think of too many places where it will apply to our current delinquency issue.
Evictions
The end of the eviction moratorium has created the expected chaos in Marion County courts. Some interesting facts that have been published include: 600 eviction filings in Marion county in the first 5 days after the expiration of the moratorium. In the same period of 2019 there was a total of 82 filings of any kind at all during the same period.
An estimated 40% of Indianapolis landlords refused to participate in the Indianapolis rental assistance program. For your information, we agreed to participate in every request.
Landlords are starting to receive funds where a tenant received approval. You should see those in your September distributions.
The IndyRent.org site is now working through the backlog of applications from their wait-list. They are reviewing 1000 applications at a time and giving a short period for responses. So, this week we have received notice of a few more requests for assistance. Fortunately, none have been cases where we already had filed for eviction.
Housing Inventory
The limited supply of homes for sale continues to be the biggest news in real estate. From National Mortgage News: The shortage “is now undermining price stability and threatening to further quell home sales activity,” HouseCanary CEO Jeremy Sicklick wrote in the company’s latest Market Pulse report. “The lack of housing supply is keeping prices unexpectedly high across the country, making it difficult for potential homebuyers to purchase properties despite access to credit and low mortgage rates,” Sicklick said. “Homeowners appear very reluctant to list their homes due to the recessionary environment, political uncertainty and pandemic unknowns.”
Why Invest In SFR?
Despite the lack of inventory, Justin Pierce with the Washington Post makes a strong case why a single family home or a portfolio of homes make for a strong investment. Lower prices, more financing options and a safer investment are some of the reasons why.
According to Bendix Anderson in his article in the National Real Estate Investor, the largest companies operating in the rental housing space are reporting few vacancies and strong rents. Smaller players are struggling. But read closely as we believe the real trend to watch as an investor is the increasing preference of renters to live in a single family home over denser housing options. It is a significant trend that we are seeing daily as nicely finished homes in safe locations rent very quickly to qualified applicants.
Investing Reminder
Buy your next rental using REAL Net Operating Income-NOI (all revenue from the property, minus all reasonably necessary operating expenses before taxes, P and I, depreciation and capital expenditures-CapEx). Don’t fall for the numbers a seller provides that are based on projections. If that is all that is available, do some independent verification and research.
If you have no choice but to buy from projections- you are buying spec. If you buy from projected NOI the lender will want MORE reserves and MORE down payment to be assured you can get through the stabilization periods. Don’t forget to request on the front end all needed CapEx into the loan (or seller’s note).
Buying on projections with expected CapEx might make your real estate investment a huge cash drain.
