Eviction Moratorium made Unconstitutional

Foreign. Update.

We got an update. Yeah. Okay.

The Supreme Court has spoken.

Yeah. Okay, so let's address the hate mail topic first. Real quick. We've got a great show planned. We're talking about the eviction moratorium, which was a federal law. During the pandemic that prevented landlords.

Federal law. Yeah.

Yeah.

Okay, keep going.

Yeah. That prevented landlords from evicting tenants. States started adopting their own rules. It's been a little hairy, Carry. It's very state specific in some ways as well. But anyway, the rental assistance program was passed to try to help people and help landlords, and only a fraction of the money set aside for that actually has gotten to landlords. So we talked about this about a month ago when it was extended, and we got some hate mail that we were not sensitive to the plight of the tenant. And we certainly did not mean to give that impression. But we are also sensitive to the plight of landlords. 80% of landlords are individuals, not huge corporations. They're people, too. They are hurting for not receiving rent. And to think that landlords are all wealthy Ebenezer Scrooges and can take this hit for months on end, that's not true either. So it's a hard situation. So we addressed it, got some hate mail. And Matt, in the meantime, give us the update.

Yeah. Last week, the Supreme Court ruled the CDC extension of the eviction moratorium unconstitutional. So what happened is, during all the COVID pandemic bills, Congress gave an eviction moratorium that expired. Congress authorized a lot of emergency rental assistance. We'll talk about here in a moment. That landlords can access and tenants can access. But they placed an eviction moratorium that expired. The CDC came in and said, we are taking our authority as Centers for Disease Control because there's a pandemic and we're going to extend the eviction moratorium. Yeah, well, the national association of Realtors fought that. They, they took it to the Supreme Court. They won at district court, government appealed. They won in the Supreme Court, basically. So it was unconstitutional. The CDC did not have the authority to do that. And the Supreme Court basically said Congress can extend it. Go make. Go make another law and extend it. But the CDC didn't have the authority to extend it. So that's the. The nuts and bolts of the legal opinion. And it was six, three. So it was, you know, wasn't just all the Republicans versus Democrats, if you want to call them, our conservatives and liberals split in. Theirs is a little cleaner than that, going six, three. So.

Yeah. And states still are doing a few things on their own to try and help their citizens per se. So as we talk about this, we're going to repeat probably multiple times that you need to look up what the rule is in your state as a landlord. And we'll talk about how you can go get money, what to do with the tenant that hasn't been paying rent. What are your options? So we can try to figure this out, but it's a touchy topic and we're grateful if you're a new listener here to kind of checking out this show. Maybe this topic is important to you and you thought, I'll listen to these two yahoos. Thank you. I think yahoos was a phrase way before Yahoo.com, but I'm just guessing. Yeah, I think so.

There was the drink. Yahoo.

We should.

Was that sponsored by or yoohoo? Yoohoo? Yeah, something like that. We're not a bunch of you who's.

No, no, no. And so we are both tax lawyers and small business owners, rental property owners and parents. And we're just trying to be good guys and hold it all together. This is not a political rant. The show today. This is how can we help landlords. So I hate to say I'm sorry, tenants out there probably don't want to listen further unless you want to know what the strategies are your landlord might employ.

Good defense.

Yeah, put up a good defense. What is it? You keep your.

Well, let's say this. I mean, let's just be honest. What the landlord wants is what the tenant wants at this point. If you've had a tenant that was out of work that was unable to pay, they qualify for emergency rental assistance. That's going to cover their bill so they can stay there and also pay the landlord. It's a win win. If I don't think you got to say, you got to say it's one or the other. Here's where it's not a win win. And this is the point of why I love the. This the eviction war term getting struck down. A lot of people are like, hey, that's not fair. You guys are taking the position of landlords. You know, we need this eviction more time because people have lost their job and they can't work. Okay, they lost their job, they can't work. They qualify for emergency rental assistance and that'll pay the landlord and then they're not in default in their lease. Yeah, but who's not.

Who's the.

Who's really not paying their rent? People that don't qualify for it that aren't going and getting the emergency rental assistance.

Yeah.

Because they don't qualify. They're playing games with their landlord. Their landlord's hands are tied. They can't evict them. A lot of landlords I talked to a client wants to sell a property because the real estate market's up and like I can finally cash out on this rental I've had forever but I can't get my frickin tenant out that's not also paying me rent. It's like the worst, right?

Yeah.

So. But the reality is there's a win win for landlords and tenants. It's the emergency rental assistance. We'll talk about here in a moment. It covers your bill if you're a tenant and it gets you paid as a landlord. And it's all coming from the government.

Yeah. And I will, I will add, it's not those that are out in the news complaining saying oh you're going to evict these people that have lost their job or this or that. And the only people playing games don't qualify for the assistance. There's a lot of people that just don't take the effort or won't cooperate or help the landlord get the assistance. It's a two part process, it really is. And if you're a landlord you've already experienced this. You've got to have the help of your tenant to go get this assistance. If you're the tenant you've got to be involved with communicating with your landlord or the property manager to help them get the rent. Is this is just not going to automatically happen. And a lot of people regrettably in

life, not like the stimulus check that just popped in.

Yeah. You know, yeah, I qualify for rental assistance. Someone's going to send someone a check. I'm just going to go back to doing what I'm doing. No. And regrettably a lot of people in life are a little lazy and think that these things will just resolve themselves. Now they're getting notices of eviction and they're mad where it's like well where have you been? You could have solved this. But anyway.

Yeah. And the eviction moratorium. This is important for everyone to know. The eviction moratorium when it was in effect didn't relieve you from the ability to pay or from the responsibility to pay. You still had to pay. And that money you owed was racking up.

Yeah.

So and, but now again you can go get emergency rental assistance. It can go backwards too as well as forwards. If you still need it for, you know, so go. So we want to talk about that. But for you landlords that have had a tenant that now you can finally evict that hasn't paid, that you're going to get a judgment against, that you're not going to be able to collect on anyways, what do you do? Engage back in this emergency rental assistance process?

Yeah. Oh, crazy. Well, anyway, we want to keep this fun, so we're going to joke around a little bit, have a good time. We're going to talk about maybe some tax tips in this process. Life tips. This week was a, you know, one little item in the news. I, Mark Kohler, went to Park City to do a little mountain biking. And, you know, it was just another wake up call on getting old. It was just, it was a little, it was a little tough. See, I, back in the day when I was in my 20s, I loved a mountain bike. It was kind of a big deal back then. You know, it's like, ooh, you're a mountain biker. You know, it was kind of a new deal. You know, it's a little old and maybe passe now, but I, you know, I thought I was living on the edge. It's still cool. So back in the 90s, I was mountain biking and I thought I was, you know, living on the edge.

Okay.

And having a. Is that Aerosmith living on the edge? I can't remember. We've got to figure out, Corey. Fact check. See, but that's what we have our studio for. Not for the quality of the show, but for fact checking songs. But anyway, so I went to Park City and I started to go down this hill. Some of you that are a little older may have experienced this because our body and our mind, they're just, they're not on the same page like they used to be. And there's a comedian over on Dry Bar. That was so good talking about this too. Like, I got up there and this is what you do in Park City. Best place in America, apparently, for what they call single track. You go up on these ski lifts, you look at the map and you're like, hey, I'm not going to ski down. I'm going to ride my bike down this mountain. Sounds reasonable, you know, and so you look at the little map and there's blue courses and green courses and black courses, just like skiing for those that are out there. And so I get off the little gondola with my mountain bike and. I didn't tell you about this, Matt. This is kind of funny. This guy comes over total. I mean, his bike was dirty, you know, right there, my bike was clean. Not a good sign. So he knew I was about ready to get my life passed before my eyes. So he pulled. He pulls over on his mountain bike. He's like, dude, which way you head Down. I'm like, I don't know. I'm going to go with a, you know, a blue run, kind of moderate. He's like, yeah, go over here. That's where you want to go. Do not go over to this black run. And he, I, I could see he was trying to save my life, which I appreciated. So I. So I go over the spot and they call this single track. People, let me explain what single track means. There's a single track. There's no other track. If you're not on the single track, you're pretty much falling down the hill to your death or dismemberment or disability. So single track that. You got to keep that in mind. So he's like. So he's like, go for it. So my body's like, again, not in line with me. So my mind, I'm all, this is going to be awesome. I put on my headphones, I'm listening to some Smashing Pumpkins great 90s band. And I'm just like, I'm going to do this. And I'm like, so excited. And I start to go down this single track, and my body's like, did you want to check with us on this? Because I don't think we're ready for this. We didn't sign up. Like, we can help you become disabled. You're going to sweat a lot, you're going to be in pain tomorrow, but I don't think we're going to help you here. This is on you. And so I saw my life pass before my eyes a few times. And as I got to the bottom of the hill, I saw another track. There was a golf course, and these old guys were on a golf cart just smoking cigars and golfing. And I thought, that's the track I should be on. You know, I need to stay in my own lane.

The golf cart path, not the single track, mountain bike path. Downhill.

Yeah, yeah. And last point. I want to point this out, by the way. Cory. Yeah. Corey just said that Living on the Edge. Aerosmith. Thank you.

Oh, that was correct. I'm more of a dude looks like a lady. That's more of the Aerosmith I'm into.

Okay. Yeah. So if you've ever done this single track, you're Kind of going back and forth the side of the mountain and then down ravines. And if you miss one thing, you're looking over a foot cliff of death and dismemberment. And so my mind starts to catch up to my body, and I was really fearing for my life. And so as you get closer to the bottom, you go back and forth, and then you see the vision of I'm almost at the bottom of the hill, and then it takes you back into the mountain. And it was just like the movie the Perfect Storm. And I was. Mark Wahlberg's there with, um, who's the captain again? Come on, Come on. You know,

I don't know. Wasn't George Clooney, was it? Yes.

Good. See, I was testing you, George Clooney. And they see the light open up, and they're like, we're going to get out of the storm. And so I'd see the light at the end of the mountain, and I was like, I see a golf course. I see a cart girl with sandwiches. I mean, this is my. I'm seeing the light. I'm going to survive. Then we get sucked back into the mountain. And it was like the Perfect Storm when Mark Wahlberg looked over at George Clooney and they're like, nope, we're not getting out of this. So.

Okay.

Yeah, apparently poison ivy is a very decorative shrub at the bottom of those hills, too. Just want to. I won't elaborate on that situation, but anyway, it was a very big reality check. So just want to point that out for all of you that are getting a little older. You know, be careful. Make sure you check with your body. Make sure you're both on the same page. That's all I'm saying.

Maybe ease into it, you know? Yeah, just start with the greens, you know? Yeah, start with the cart path.

All right, so you're still young.

Well, that was good. That was good story time. So anyone else still listening? We are going to talk about the eviction moratorium. Let me. Let me hit a couple of important points, though, before we get into the rental assistance. Okay.

Baseline, Mark mentioned.

Yeah. As Mark mentioned earlier, there are some states that still have eviction moratoriums themselves. So as landlords, you're going to have to, you know, you're not going to be able to do anything until your state makes a change. Now, here's some of the states that already have. This is as of the end of August, that already have a state eviction moratorium in place, or I should say eviction ban, you know, where you're unable to evict.

Is this some of the states or this is the list of states.

This is the list of states as of end of August. Okay. Now I know there's been legislatures like New York, for example, and others that have called special sessions to try to implement a law. So this, there may be some not on here, but here's the current list as of this is August 27th, California, Washington, D.C. maryland, Minnesota and Illinois. They still have statewide eviction bans in place. Each of those have different end dates and stuff. So just get up to speed on your state there. That information is readily available online. If you want to just look up your state. Like I said, I know there's a number of states, even Nevada, Massachusetts, Oregon, that are, that are that we're trying to implement or may have implemented by now. But so in those states you're not able to evict, you're going to wait. But the federal mandate unconstitutional. There's no eviction moratorium.

Take the gloves off. Take the gloves off. Now. One other point I would make too, all of you landlords listening. If you are still owed any rent at all from a tenant up to 18 months ago or foresee that your current tenant is struggling, meet with them. Find out what, where you can best go in your state online. There's all sorts of oh boy, facilitators of this, I should say organizations the state has, the feds have left it to the state and various state charitable organizations and also cities and counties and cities. Yeah. To implement this. So find out where to go. Get the form, get it filled out, work with your tenant and get the money. Now, you still may want to evict them and you can, that's a key point here. If they, you can get an eviction going for some other reason, maybe if they haven't paid or maybe they didn't qualify for the payments or the payments didn't cover all the back rent or whatever the case is. So if you get all your money though, you can't evict them for not paying. They satisfied the payment. So you want to look at your lease, see if there's other reasons that you might need to consider to evict someone. But for payment purposes, if you get the money from the feds helping you with this situation, you cannot evict anymore. You can't get the best of both worlds.

Yeah. Which is. Well, I think again, the win win is the getting the rental assistance and getting that, you know, getting paid and the tenant getting their obligation taken care of so they don't have a judgment or bad credit chasing them down. And no landlord wants to go through an eviction process. Just because you can evict doesn't mean you should. All right? The eviction process is a pain in the butt. You're going to pay lawyers. No one likes paying lawyers crap. You know that. The process is not immediate. It's going to take months. Anyone that's evicted a tenant, you guys know this. And so. And at the end of the day, you get a piece of paper that's a judgment. That's that you can't collect on.

See, I was going to wait for this moment because I thought I was going to impress my partner Matt and wait till the end of the show. But the window is now opened. Did you hear what Matt said? Just because you can evict them doesn't mean you should. Just because you can go down the single track trail doesn't mean you should see where I was going. You see it? That was my point. Huh?

That was the payoff.

That was the payoff.

Through that mountain biking story of mark Kohler for 10 minutes for that one point. But, man.

Well, I hope it was enjoyable anyway. But this was the Arrested Development. When they found what's his name's hand in the dishwasher, that was like four episodes later. It paid off.

Buster.

Yeah, Buster. Buster's hand was in the dishwasher. You're like, oh, my gosh, they brought that together. That was the payoff. So I just want to say this is important because being a landlord, evicting someone is expensive. Usually the property is damaged upon their departure. They don't plan on paying you. They, you know, they're three sheets to the wind. They're gone. And so you want to try to avoid evicting, make sure you get. You just. Just because you can do it doesn't mean you should.

Yeah, yeah, yeah. That's my boy. Once you learn that in life, you know that's key. Yeah. All right, here's another point I think is important, too. So with the eviction moratorium lifted and it's unconstitutional now, you do have a little leverage to try to work with your tenant. Before, I think a lot of tenants were like, can't touch me, can't touch them. MC Hammer.

MC Hammer.

It's like, what are you going to do?

We went Aerosmith to MC Hammer.

Answering. Yeah, I'm not answering your phone calls. I'm not replying to your emails or your text or letters, whatever you're sending me. So. But now, oh, man, I gotta, I gotta deal with this now. Now, you know, we gotta deal with that. I was gonna try and use a mic analogy there, Mark, on the single track, you know, but, and so I think you as landlords, you should be using that. Say, you know, I, I don't want to evict you. I want to try to work with you. Let's try to work this out. There's the emergency rental assistance. Let's work together, get it paid. I guarantee you the process and likelihood of you getting paid is way higher doing emergency rental assistance and cooperating with your tenant than it is the eviction process.

Okay, all right, now next point. Let's get. These are questions we've had on our open forum, which will be next week. Any of you that want to leave a question at Main Street, Main street, business dot com, get over there. There's a click on I have a question. And you can type in any question. You'll be surprised how many people around the country are sharing similar questions. The question is, in an eviction, can I go after the difference of what they still owe me plus any damages to the property? Yes. Now, what you would do is you're going to do some math. You're going to say, here, here's the back rent they didn't pay me. You're going to go to your lease agreement for any of the interest fees, late payment fees, and you're going to add all that up. You're going to look possibly to see if it includes attorney's fees and collection fees. Some of your leases are going to be an eye awakening experience going, oh my gosh, my lease sucks. But you want to see what money can I get? Then when you get around to evicting them and getting them out, that's going to include any damages to the property after they leave. Make sure you're taking as many pictures as you can. Now, what are you going to subtract from that number? Any money you got from the federal assistance. So it's a combination. You can still get some money from the feds, but if they owe you for damages or any other back rent that didn't get covered through the federal assistance, then that's what you can get a judgment for in the eviction. So the eviction is about getting them out and getting a judgment for what they owe you.

Yeah. And keep in mind, you may have a security deposit that you took. You know, every good landlord's gonna take a security deposit for at least one month, maybe two. I started doing two on A prior on another rental of mine, so at least one month's rent. And you would use that to offset the damages to the property.

So.

But also, keep in mind. And I just. I know I'm. I don't want to sound like a broken record on this, but you may have do some negotiation here too, because you may add this up and be like, hey, tenant, here's what, you know, I can go after you for. Like, this is, you know, if I add up six months of rent and the damage to the property and late payment fees and everything, it's 10,000 bucks. Cooperate with me on rental assistance. I'm gonna. I'm gonna let. Let you out of some of this stuff. Let's negotiate and try and like, you know, get a positive outcome for both of us, because again, I've just had to do it only once, luckily, on my residential rentals. It's the worst. Doing eviction is the worst. It takes months. That property is going to be totally toast. When they leave, you're not going to get your money paid back. You have to get the sheriff over there. I had to get them out. It's just not. It's just not a pleasant experience for anyone. You kind of feel like a jerk sometimes at the end. But because of this emergency rental assistance, this other pot of money out there, yeah, I think that gives some outcomes that can be favorable for both. But now with the eviction moratorium lifted, I think it's time for landlords to start engaging. They can start making moves. And if the tenant doesn't want to play ball and you just got to get them out so you can move on and get the next tenant in there, then do what you got to do. Go through the eviction process.

Now, this is also. I like what Matt brought up. Negotiation time, because I've seen other landlords do this. They go into the tenant and go, all right, gloves are off. We got to talk. This is not good. You owe me some money. I don't want you evict you. I want you to stay here. Let's meet in the middle. If you are willing, one option is, please just leave. Please just leave. I won't go after you for the back rent. I won't go after you for the deposit. Just go and you can sign a settlement. And that might be a little settlement agreement that your attorney prepares. And you go to them and say, if you'll sign this, I waive any claim to come after you for any of these back rents. Now, I do want to do an inspection and we will sign this document the day you give me the keys and walk out. Do not sign that document before you get a chance to inspect the property because then they leave and take.

They're out.

They're out. Yeah.

And they're stuffed out. Yeah. You sign that and there's stuff still in there. You need to evict them.

Yeah.

Can I kick them out? Matt? They signed a settlement agreement that said they leave. You know, like, you're still going to need to go get an eviction, get an order. You're talking three months, and then the sheriff can come by and really kick them out.

Yeah. So great comments. And so keeping a dialogue open and saying, I'm willing to meet you in the middle. Just please leave can save a lot of heartache. Now, the professional squatter, they're not going to sign that. And regrettably, there are tenants out there that they're going to wait till the sheriff literally picks them up by their ear and plops them out in the hallway. And it's too bad that people will live that way and take advantage of others. But if you can have a reasonable conversation, cut a deal, try to get. Get them out of there, and you can settle anywhere in between. So get out there.

Love it. Well, the rental assistance, too, just so everybody knows. And just like Arizona is an example right now, I can give you numbers. It's a little different state to state on amount, but it's a maximum of 18 months of rental assistance that can include utility assistance form. And In Arizona, it's 3500 bucks per month. So I. I have a rental that's 22, 2300amonth that I had a tenant in there that was very good. They kept engaged with me. They were behind on rent, but they got the rental assistance and I got three months of rent paid in advance through the end of their lease, actually. And they've since moved out. But. And it was, it was good. They were like, they were great tenants, actually, you know, but just know that's there and you can go back, too. It's not like you're like, oh, we missed it. They haven't paid me. And they. We haven't been able to communicate failure on my end or theirs, whatever it is. No go communicate. You can go back, too.

Yeah, I love it. Now, on the topic of eviction, this is not a show on how to evict people. It's very state, city, sometimes county specific, because eviction is a very localized issue. And so if you're going to go down the path of eviction. Whether or not you get any money in rental assistance or not, whether you cut a deal with a tenant or not, I think it's very important you immediately dive into Google and start looking at state websites on the landlord laws for your state. Pull out a pad of paper, get a big diet coke, a bowl of popcorn, and sit down and go, okay, what should I be aware of here? What are the rights of tenants in my state? Some states are very landlord friendly, some states are very tenant friendly. And we've all kind of put on our blinders maybe during this pandemic. Now it's time to reopen that can of worms. And so really make a list of what you need to be aware of. A lot of times on these websites, they're going to give you the steps to proceed. You might find a local attorney that's really good at this, where they just specialize in evictions. I think the sooner if you're going to evict, the sooner you can give notice of that, the better because there's a waiting period you got to give people. I mean, the theory is give them time to pack their crap up, but it's way too long in most instances. So get it filed right away. Don't delay any advice on evicting Matt because you've done this, because you're a jerk. But in your situation, I mean, I've

never, I mean, how to property manager handle it. But, but that's I just say is like you, you avoid. This is the last, this is the last card you play. And that's why with the emergency rental assistance you've been given, you've been given some freaking wild cards, all right? You've been given, like, hey, if I can play this with you, tenant, I get paid, you get relieved of your obligation to pay me. Again, it's the win, win. And so, but for whatever reason, if they don't qualify because they didn't lose their job, they make over 100 grand a year, whatever these things are. That's like, they just don't qualify. They freaking should have been paying the rent in my mind. I just don't know, like, if you don't qualify, like, who's the tenant we should feel bad for? I'm sure there's some that fall through the cracks, but in general, it's the way that they designed the emergency rental assistance was to pick up anybody who was affected or that had less than a six figure income that couldn't pay. And so those are the ones that need help. Those are the ones you feel bad evicting, those are the ones we can get emergency rental assistance for. And again, you can have the win win so you don't have to do the eviction. But I, I've had tenants not pay. I've had tenants that have left properties trash that the security deposit didn't cover. And I just go out of pocket. It's not worth chasing them down and going to court and throwing good money at bad. You just. It's very hard to collect on an eviction judgment. I bet nine out of ten judgments from, from an eviction are never collected.

Okay, now let's talk taxes for a minute. A lot of people have been asking me about what is deductible. If you've got to repair the property after the tenant's gone, that's a deduction unless it's substantively, substantively sorry, tongue twister. Improving the property and doing substantial reconstruction or something that is attached to the premises, then those might have to be depreciated. But for the most part, any repairs, maintenance, cleanup, all that is going to be immediately deductible. Can you deduct your time? No, it's only out of pocket costs. I'm sorry. So if you pay someone to go do that cleanup, subcontractor, employee, whatever it is, great. You may be paying your kids, you may be paying a family member. Whole other topic we love to talk about on our show. But the expenses to repair the place are a write off. If you paid for utility bills on behalf of your tenant because they didn't pay them, then you get to write that off. But if you got rental assistance, then that's going to be considered income because it's taking the place of rent that was supposed to be paid to you. So the rental assistance is income. All the expenses you incurred are going to be a write off. And as many of you know, we want to be really aggressive. There's thinking of any out of pocket costs during this nightmare. Tools, supplies, equipment, utilities.

But legal fees if you have to do the eviction, the filing fees to the court, the fees you pay your lawyer, maybe you have a collection company or property manager that charges you fees in the process. Those are all going to be expenses too.

Now you cannot write off them not paying rent. So you'll say, well, I want to write off because they didn't pay me rent, so I'm going to write off the rent I didn't receive. Well, 99.9% of us are all cash basis taxpayers as landlords, meaning you get rent you have income, you have an expense, you get a write off. If they don't pay the rent, you don't have income, nothing. So you don't get a write off because you don't pay rent. You just don't have to claim it as income. So I hate to break that news to you, but lots of great write offs in this. Not that. I mean, that may be a little bit of. What do they call it? Not salt. The opposite of salt in the wound. It's a little bitter. Just a little bit of, you know, it's a little like consolation prize.

Consolation prize. There you go. Yeah.

So keep track of all those expenses, whether you paid for them with your personal card, business card. I've got another thought. Matt, anything else on expenses? I got a thought on privacy. Can I go there?

Oh, yeah, sure.

I think this has been a wake up call for a lot of people that you may have your own name on that rental property. That's terrible. Asset protection, you may have an llc, but the LLC has your name all over it and your home address. And in this very volatile situation, the last thing you may want is your tenant knowing where you live. So this is a good opportunity to go, you know what? I'm not going to let that happen again. So as you're hitting reset, you're getting rid of the tenant, you're fixing up the property. Maybe you are going to sell, maybe you're not. But if you're going to keep this thing, let's reevaluate your lease agreement. Let's really get into it. A lot of people have never looked at their lease agreement until this pandemic. This is a chance to get your LLC in good order. Make sure that your home address is not on there. Really reevaluate your asset protection plan, too. Because now, moving forward, you're going to learn from this. You're going to be better, you're going to be smarter.

Yeah, great point.

Yeah.

I think as a general rule of thumb, we always want our clients to be using an LLC for their rentals for asset protection. So you're not renting the property. You don't own the property. Your LLC does. Your LLC is on title. Your LLC rents property. Why do I want that? If the tenant slips and falls, or I have some snafu in the eviction and they want to sue me, they can't sue me. They have to sue the llc. Okay? It keeps all your personal assets separate from the liabilities of the property. The other thing that's important with the LLC as Mark said is can give you some privacy. Now some of you self manage your rentals, you lease it yourself. They know you own the property. It's not like you're like hiding there. Now some of you have property managers and you're very behind the scenes, you know, the wizard of Oz, whatever, behind the curtain. And, and so your name might, you might want to try find ways to keep your name off. But your address I think is one that's pretty easy to get off. Your name's a little more tricky depending on how involved you want to be, but the address is easier. And we have services, a mail forwarding service where you can use our address, registered agent service where our office or our registered agent company we have in all 50 states is listed. And so that's a way that it at least keeps your address off of there. Because that's what I like is having a separate address. I don't want my. They may know me. I'm just gonna say that for like my tenants, you know, they do know that I own the property and I am a little bit engaged, at least in the ones here, but they definitely don't know where I live. That ain't on there. I don't want them starting on my house, you know.

Yeah, yeah. Now another point I want to make if I may. A lot of people in the 2018, 2017, 2019, whenever the crash really hit you back when the big short occurred, a lot of people said, I'm never going to be a landlord again. Real estate sucks. The real estate market crashed. I'm licking my wounds. I'm going to never do real estate again. There's a couple companies that I've come to know over the last 10 years that went all in on life insurance. That's what I'm going to do. I'm going to be a lender and do life insurance. Never going to own real estate again. Well, that's kind of like saying, man, I had a bad dating experience. I'm never going to date again. I'm going to die single. Well, okay, you had a bad date or maybe you had a bad marriage. Does that mean you're going to bury yourself in a bunker or put your head in this hand the rest of your life? No. Try to realize that a lot of people were affected by this, both tenants and landlords. And it's the up and down of real estate that we all knew we were getting into. But what's going on right now? See, when people call me up and go, real estate sucks, I got this Tenant. I'll go. How much is your property worth right now? Well, yeah.

Right.

It's really good right now. Then chill out. You know.

Yeah, that was, yeah that was a client I talked to actually that was I mentioned earlier who's was wanting to sell their property because it appreciated so much. Arizona's had huge price appreciation. In fact I sold the rental last, last week even so myself. It was pretty great. So. But we've seen that on the plus side the rental prices have increased and I think while there has been some headaches for a lot of smaller landlords that and we know you know you've had to pay the mortgage you haven't collected on rent, you've struggled with the emergency rental assistance because you've lacked tenant cooperation. We, we've heard that you know that happening. Mark Kohler will always be the class is half full. Your property's appreciated. I guarantee you it's appreciated more than the rent you've lost. At least if you're in places where I am. And then I've been following the market so there's a plus side to it and I think we always like to what can we learn from this process and what I've really learned and this is what I just, I mentioned this earlier is I've had to learn a lot in my own rentals and one I that I have a property manager manage. I told them I'm not doing one month security deposit anymore. We had 80 applications like within two days for when I listed it for rent. There's tons of people I'm like I want two months of a security deposit because the last tenant moved out and I had like five thousand in repairs and a fifteen hundred dollar security deposit. I didn't go very far. Like I want two months security deposit on here to cover any repairs that we have to make. And so figure out the lessons you've learned. Know the market you're in and if you're going to keep it as a rental guarantee you your rent is going to go way higher than what your lease was last.

Just took my, you know, you can't just have all the good comments. Geez. I was just going to say what

you gotta, you gotta be fast. You gotta be fast.

You know Matt right before he started his wonderful statement that you know, took all the goodies off the table for me, left me crumbs. He said in that statement, some might call it diarrhea the mouth but I wouldn't say that. That would not be me. I'm just saying some may but not me. You're close. I respect your comments.

There's no explanation of what is a single track trail.

Touche.

Apparently.

Hey, mine had a point. You know, just because you can go down the mountain doesn't mean you should. That. Okay.

It took you 15 minutes to think of that one and bring it back.

I had it. I had it in the back pocket the whole time.

You knew where you were going. I don't.

I knew. I knew where I was going. I think through this. Okay? I mean, I. Even when I got off the mountain, I called a friend and I said, you know what? That was death defying. But I got some good podcast material. You know, that. That was well worth it. And that was worth it, by the way. By the way. I got off the mountain, called this friend, and I was like. They're like, well, I thought you died. Where was your phone? Just to add to my stupidity, I went down the mountain by myself and my cell phone died before I went. Yeah, I didn't tell you. My. My podcast partner here, my law partner's like, dude, never do that again. I could have been at the bottom of the mountain. Not good. Okay, here's what Matt said that was helpful. He said rents went up, but not only did rental properties values go up, rents are on the increase. So even though you're licking your wounds, maybe you're feeling a little dismayed with rental property. You know, own it. This is. Chill out. I'm not going to let you cry on my shoulder too long because you've got a great opportunity to turn around, really reevaluate your lease. Reevaluate the type of tenant you want. This has been a reality check. We had a show with Rent Prep here on the show about a year ago, and that's a. There's websites like them everywhere. We really like Rent Prep. It's an Affordable website. For 20 bucks, you can do a background check. So when Matt's out there doing applications, wanting two months deposit, you know what he's doing now? I bet you he's asking for a credit check. He's wanting to look at those applications because he's going to choose a lot better tenant this time around. You know, not. You know, it was hard, my kids. When Matt kicked him out last week and evicted him, it hurt, but I knew he had to do it. My. My kids weren't paying the rent. And, yeah, it was a hard life lesson. You won't let Uncle Matt let me stay here any longer? No, I'm. I'm.

I just have that personal Guarantee from Mark Kohler there. So, you know, I know I'm getting paid. No, he didn't kick out another story for another day. We got to talk about that. But, but okay, so let me kind of summarize a couple of key things. Federal eviction moratorium gone. Supreme Court ruled it unconstitutional. You may have be in a state that has a state eviction moratorium. So just check that in your specific state. Landlords realize the best ability for you to get paid is the emergency rental assistance. It's a win win for your tenant. It's a win win for you. That check will not bounce. And it comes from the government. Okay. It's good. All right. And the eviction process will take you months if you have to do it. You'll cost you thousands in legal fees. And at the end of the day, you're going to get a trashed property because your tenant's not going to love you because you're evicting them, you didn't work with them. And you're going to get a piece of paper that says they owe you something that's not worth the piece of paper it's written on. So I want to encourage people to reach out to these resources that are there. Again, it's 18 months of federal emergency assistance that can be used for rent. Arizona is up to 3,500amonth. Every state's a little different. That's just an example there.

Okay, well, I think those are all. Those are reasonable summary. Summary points. I think the best one is just because you can evict someone doesn't mean you do.

Yeah, and that was mine. I did say that. That was mine.

Oh, my gosh. Now I go through that whole story and you steal the punchline. Okay, mine.

No, I said it. Just because you can evict someone doesn't mean you should.

Well, that, because that was going to be summary to my story. Unbelievable. This hurts. This hurts people. This is what.

Well, I mean, you know, you brought it back to mountain biking, but yeah.

Oh, no. By people. Real estate is still good. Real estate is still good. Dating is still good. Marriage is still good. Life is still good. Just because you got the crap kicked out of you with the tenant, don't think the sky is falling. Look for the glass half full. Learn from this experience. Get a better lease, get a better tenant, get a better llc. Think about your privacy. Increase your rents, maybe refi. Interest rates are down now.

Yeah, that's another big one.

Yeah, lots of opportunities here. So you're not going to get a shoulder to cry on here because we're going to tell you all the good things that you can do now and learn from this. And there's rental assistance out there to probably get. So a little bit of tough love there. Is that okay? Little tough love?

Well, it's necessary, you know, sometimes necessary.

That's. That's what Matt set to his tenant. This hurt. Did you say this hurts me than. More than it hurts you? Did you. Yeah.

You don't even know that.

Yeah, do or did you say, it's not about you, it's about me? Did you use that one?

Can't believe you're trying to use the. It's not you. It's not me. I invented that. Okay, you're right. It's you.

Jeez.

You're damn right it's me. George Castanza. That's a good.

Oh, that was awesome. That was a good. Well, everybody, please continue to make this podcast a part of your regular listen every week. We want to save you money, make you money, Help you hide it, help you launder it, help you. No, we don't want to do that. We want to. What do we want to do?

Help you protect it.

Yes.

And help you strategically pay only as much tax as you need to.

There you go. So those are all good things. We're not dirty rotten.

Scrambling sounds way better.

Yeah. I was looking at my hate mail all of a sudden, just realized what

kind of an operation you think we running over here?

Well, I was just looking at the hate mail and I was like, you know, someone said the other day, you should read your comments. You have a lot of good comments. People really appreciate what you do. And I go, yeah, but the problem is I kind of focus in on those nasty comments. And then, you know, then I end up, you know, with a bottle in the basement huddled up in a corner for a weekend. That's not healthy. You know, some may say it's healthy. It's not, you know. Yeah, but.

All right, well, thanks for hanging in there on it. We appreciate you will be having more episodes, of course, coming up. Make sure you're following the newsletter. You'll get notifications of shows you may have missed. See what the upcoming shows are. You'll get our. Our workshop updates, our summit, all the educational stuff we're doing throughout the fall, which is a lot. We'd love to see you there. Any of those events, get over to mainstreetbusiness.com where you can sign up for that. We'll be back next week with another amazing episode of Main street business.

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