44) Why HOAs Suck Right Now & How to Evict

House Money Weekly

In this week’s House Money Weekly segment, Lauren and Alan get together with their special guest Skylar Romines. They discuss blog 142, 3 Secrets to a Successful Eviction. Alan has only personally handled one eviction, but he’s had property managers do some with him. Lauren, on the other hand, has had to have an Airbnb guest removed and she’s had a squatter. If you are a landlord, you’ll likely encounter evictions, and you must understand how it works and its process. Evictions can be handled rationally. The 1st secret is judges love paperwork. They don’t care about the back story of what happened. They’re going to go by documented communications and the lease. The 2nd secret is to not accept partial payment. If someone comes to you and offer to pay $300 for their $1000 due and will pay $300 next week and another $300 on the other week and you said yes, you basically have an implicit verbal agreement that they can now pay partial payments without penalty, and you are basically giving this tenant permission to always be late and to always give partial payments. That’s why Alan doesn’t accept partial payments, even if there is a roommate situation. The 3rd secret is that mediation is the real winner. In most cases, the judge goes over the law for the tenant and landlord and sends them to mediation. In this recent eviction, Alan and the tenant agreed on a deal through mediation. Skylar shares an example from a friend of hers in California, who was able to get a non-paying tenant in an inherited property out after a year. Alan reminds us all that you can potentially avoid evictions by cash for keys.

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Mortgage Minute: Jasmine answers the question: What are my options if I don't have a large down payment?

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Real Estate Is Easy Interview

Lauren interviews Jojo, also known as Real Estate Jojo. He describes himself as a middle-aged lifelong educator, but he’s much more than that! He was a teacher, a sports coach and administrator for all of his career. Alongside that, he is also involved in entrepreneurship and investing in real estate. Jojo and his wife have six doors that are investment properties and then their primary residence and they acquired these properties over the past four years. Lauren asks Jojo what strategies they used that time and it all started out with trying to figure out a strategy that would make them most comfortable and coming into real estate investment and through their research, we learned that the BRRRR strategy would be the best strategy for them to be able to scale larger or quicker developments overtime. Jojo also explained what a BRRRR strategy is: Buy, Rehab, Rent, Refinance, Repeat. Jojo attempted to do 6 BRRRR for their properties, meaning they’ve left money in some of their deals, which is OK. Lauren asks Jojo to explain more about creative financing they used, and instead of being able to roll all the money from the first investment into the next investment, they started to utilize some private investing. What’s interesting here is that private money has a lower interest rate than hard money. Some of Jojo’s properties are in Augusta, GA. Why? You can buy houses there for “less than a Kia Soul.” He dives into the numbers for one of their recent deals, and it started with a $12,000 purchase price. And lastly, Jojo shares that he makes real estate easy by having a plan and also having some processes in place. Jojo is a fan of not “swinging for the fences” on every deal. Alan turned some base hits in Brooklyn into home runs over time. Skylar focuses on the roadblocks and being aware that they’re coming, but there’s a way to handle them.

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Guest Host's Segment

Guest Host Skyler brings up the condo situation in Florida. Way back in June 2021, there was a condo that unfortunately collapsed. Since then, there have been legislative changes surrounding the cash reserves that are required for HOAs in Florida. How much the HOAs must reserve for repairs affects the owners and investors in Florida significantly, like needing $100k in reserves on a $500k condo. Lauren explains her recollection of what happened in the Surfside, FL, collapse. On top of these needs, insurance is going up as well, which is usually paid through HOA fees. Alan has been seeing non-warrantable (meaning lenders can’t lend on them) condos in Atlanta. Lauren thinks Florida condo prices simply have to fall. Alan talks about initiation fees as a tool to build reserves, which he is not a fan of. He suggests maybe an exit fee.

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