Hey, it’s Joe Crump.
I’m a landlord and I have a lot of tenants in houses that I own or control.
As I’m recording this video, we’re all at home on lock down, social distancing from
each other because of the pandemic.
What our country and the world is going through is awful, and it’s probably going to get
worse before it gets better.
My company and my property managers have already started getting emails and phone calls from
my tenants telling us that they have lost their jobs and don’t know what they’re
going to do about their rent at the beginning of the month.
I teach real estate investing, so I’ve been getting a lot of emails from my landlord students
trying to figure out what they should do when their tenants can’t pay their rent.
Although there are always a few bad apples on both sides of a crisis, both tenants and
landlords, 99% of them are not trying to take advantage of the situation.
They’re frightened, can’t sleep, lying awake at night and just don’t know what
to do.
Most of them are good people and many of them have absolutely no reserves or savings.
This crisis will bring down both landlords and tenants all across the country.
I’ve heard it said on both sides, “If you don’t have enough money in reserve,
you shouldn’t be a landlord,” or, “If you don’t have enough money to ensure you
can pay your rent, you should not have signed that lease.”
And maybe both of those things are true, sort of, but one thing we know for sure: Everything
changes.
It’s the only thing that you can truly count on.
No matter how prepared we try to be, no matter how many reserves you have, you can’t plan
for everything.
Bad things happen.
And you’ve got to learn to solve those problems when they arise.
In an ideal world, we would have a strong social safety net, both for landlords and
for tenants.
The power of a civilized society is that we can help each other more effectively if we
act collective through compassionate government action.
No individual can stand on their own in society.
We all stand on the shoulders of those who came before us.
We all contribute to society through taxes – state taxes, local taxes, sales taxes,
property tax.
We all contribute.
But, there is no reason that those taxes can’t promote the common good for all our people.
But in order to effectively distribute the resources for the common good, we need to
have the political will to do it.
We need to build our social structure on the idea of compassion, ethics and basic human
rights.
We are only limited as a country by our resources and our productivity.
And our resources and our productivity can both be increased with education, with science
and technology and the innovation that those things bring.
We have so much more as a country and a world that we need that everyone on this planet
could live healthy happy lives.
But there’s so much waste and misuse of funds and greed.
And because of the way our economy is structured and the way we spend our public funds, some
people get very wealthy while most people struggle to get by.
And all people at certain times in our lives won’t be able to get by without help.
At one point or another in your life, you’ve needed the help of someone other than yourself,
even if it was only when you were a child.
The myth of the rugged individual, the solitary man, the self-made man – these concepts
resonate with Americans.
They resonate with me.
But they’re not really true.
These ideas have been drilled into our heads since childhood and we’re taught the value
of personal responsibility and the need to take care of ourselves.
And that’s good.
I think we should do everything we can to pull ourselves up by our own bootstraps and
live the lives we dream.
But there will come a time when you will need the help of others.
It happened to me back in 1991 when my business crashed.
And it’s happened to everyone I know at some time in their lives.
When you were a child you were fed and clothed and educated by others whom you did not pay.
Someone else made your survival possible.
And hopefully, they made you strong enough to stand on your own for most of your life.
When you get old and infirm you’ll need help again, even if you’ve managed to stay
strong your entire life, and no misfortune has befallen you, you’ll not be able to
escape this fate.
So, what does all this have to do with being a landlord and a tenant?
A lot.
As landlords, we have a legal and ethical responsibility to our tenants to give them
a healthy, safe environment to live with their families.
We also usually have more material wealth than our tenants and often have more options
and flexibility because of those resources.
And tenants have a responsibility, too, to fulfill their agreement to pay their rent
and keep their homes and apartments clean and habitable.
Both landlords and tenants have things at stake.
But it’s not landlord versus tenant.
We have to find a way to cooperate.
We must find a way to work together to get through a very difficult time both physically
with our health, financially with our income and emotionally as we try to work things out
together.
We need to understand what each of us has at risk in this relationship.
As a tenant, it’s all about having a place to sleep, a place to shelter during this plague.
A place to protect our families.
It’s about not becoming homeless when you lose your job and your income.
And because of the pandemic, that possibility has become a real threat to many, many people.
I know it’s likely waking you up at four in the morning in a cold sweat.
I know the difficult conversations you’ve had with your loved ones at the kitchen table.
I know because I’ve been there before myself when everything crashed for me personally
and my business went under back in 1991, a long time ago.
But I remember every painful detail and it seems like yesterday to me.
Many of you are hopeful that the layoff from your job is only temporary.
Many of you suspect or know that your job is not coming back.
All of you are uncertain about when and how much money you’ll have to cover your bills
and pay for food.
Right now, you may need some help and we’re all hoping that Congress does more than bail
out the big corporations.
They need to bail out the country from the bottom up.
This “trickle down” stuff never seems to make it past the corporate boardroom bank
accounts.
Fortunately, we just found out that they passed a bill so that everyone who makes less than
a hundred grand a year is going to get a small check to help them get over the hump and put
food on the table and a roof over their heads at least for the moment.
Hopefully, that money will come soon.
We, as a country, need to do what FDR did during the Great Depression.
We need to create a path to jobs and success for everyone.
We need to protect the most vulnerable in our society.
I’m really rooting for Congress to do the right thing, but we may have to figure this
out without their help.
So that’s what the tenants are dealing with, although I’m sure if it’s you I’m talking
about, it feels much more harrowing than I can properly express.
That brings me to landlords and what they’re dealing with.
As I mentioned before, I teach real estate investing, so I’ve seen thousands of investors
in every possible situation over the last twenty years.
Every investor goes through a process of building their business.
In the early years, they tend to take more risks and fewer resources than those who’ve
been doing it for a while.
All investors have expenses every month on their properties, whether or not they collect
rent during the month.
Each month many of them have to pay a mortgage if they didn’t buy their property for cash.
If they don’t pay that mortgage, the bank takes the property back from that investor
and the investor’s credit is trashed and their work and their equity is lost.
The investor also pays property taxes each month and they pay insurance for the property.
If they don’t pay taxes the county will take back the property.
If they don’t pay insurance and something happens they’ll have to pay out of pocket,
or, they’ll lose that property and maybe everything else they own – especially if
they don’t set up their business properly.
Ideally, the investor will have enough reserves to get through an extended time without income.
But it’s not sustainable over time if it lasts too long.
No investor is immune to losing everything that they’ve built if it goes on for too
long, or if too many of their tenants, their customers, stop paying.
Often investors live on the income they get from their rents and if they don’t get that
rent, the investor can’t pay their bills.
Many of the tenants we have lost their jobs because the customers of the businesses that
employed them lost their customers.
That means those businesses lost their income and the business owners could no longer pay
the tenants’ wages.
Tenants are the customers of landlords and when we lose paying customers, our business
dies.
The goal for investors is to have more money after all their payments are made than they
started with.
It’s a business, and it only survives if they have income, if they have profit.
Eventually, the properties pay for themselves and the landlord builds their equity, their
portfolio and eventually their wealth over time.
I should mention here that there are two ways to invest in real estate.
One I buying rental properties and being a landlord.
And two, flipping properties and making chunks of cash every time you do.
And hopefully if you do it the way I teach, you do it without investing your own cash
or your own credit.
You’ll make more money flipping properties for the short term and it’ll give you cash
to live on and build your business.
It’ll also give you money to invest in buying more properties for the long term.
The long term properties are what will allow you to build wealth, but it takes time and
effort to make that happen.
And it counts on having reliable, consistent customers, also known as tenants.
A lot of investors and landlords learned the no money techniques that I teach to buy the
properties that they own.
They don’t have a lot of reserves, especially at the beginning of their business.
They’re taking some chances to achieve the American dream.
And that’s not a bad thing.
This is how we’ve always done it successfully in America.
We need entrepreneurs in our society.
We need people like this willing to put in the hard work and take a chance in order to
build a better life for themselves and their family and ultimately our nation.
We also need these landlords to protect their customer/tenants and provide a path for them
to be successful.
So we all have something at risk.
We’re all trying to accomplish something worthwhile.
We all need each other to be successful in achieving our goals, both landlord and tenant.
And we’re in a mess right now because things are breaking apart for a lot of people.
So, what’s the best way we can work together?
We need to listen to each other and understand the difficulty that each of us has.
That’s where we start.
We need to recognize that many of our tenants are going to lose their jobs and many landlords
are at risk of losing their properties.
We need to communicate with each other and look for options for our tenants on a case-by-case
basis.
Right now, many states have stopped evictions.
They just won’t allow them.
And this is a good thing.
We can’t be throwing people out in the middle of a worldwide crisis.
But the “not eviction” orders also state that this is not rent forgiveness.
The only way the state can do that is by reimbursing the landlord or providing funds for tenants
to pay their bills.
Congress is giving tenants a small amount now and hopefully they’ll increase it as
it’s needed.
So, anyway, as a tenant, if you don’t make your payment you’re still legally liable
for the rent if you don’t pay.
We as landlords need to work with you, figure out a way to help you pay the bill, create
payment plans or perhaps find other solutions depending on the individual circumstances
of each situation.
We need to look at each house, each landlord, each tenant on a case-by-case basis and figure
out the best solution for each situation.
It’s not going to be pleasant or easy for anyone – tenants or landlords.
But if we work together we can get through this mess and come out stronger on the other
side.
Now, before the end, since I teach real estate investing, let me speak to investors and maybe
some of you tenants may want to listen, too.
Maybe you might want to become investors and become the landlord rather than the tenant.
It is possible and it is worthwhile despite the risks and challenges that investors face.
I believe everyone should invest in real estate.
Even though there are some big issues that we’re currently facing, it’s the most
stable business and investment I’ve ever seen.
If you look at the Dow Jones and the S&P 500, it’s apparently a lot more stable then the
stock market.
Real estate is the business that has created more millionaires than any other business
in the history of the world.
Because of the economy there are going to be a lot more distressed homeowner and sellers
on the market than we’ve seen since 2008.
They’ll need your help.
You can build an ethical, honorable real estate investing business helping sellers who are
having difficulties selling their homes and helping buyers who could not have bought any
other way, buy a home for their families.
You can do this and solve their problem while doing well and building wealth for your own
family.
Most of you tenants rent because you don’t think you can buy a house.
And most of you investors are limited by how many houses you think you can buy because
you just don’t have much money or access to credit.
But that isn’t true.
You can build a massive investing business if you have the right knowledge and skill.
You don’t need money.
You don’t need credit.
You don’t need a rich uncle.
You just need knowledge and skill.
And that’s something you can develop over time if you’re willing to put in the work.
I teach investors how to build a business.
Usually we start with flipping properties that don’t require cash or credit to purchase
and sell.
And then when you flip the property you make money, usually at closing.
Once you can do this consistently, you can quit your job if you still have it, and start
doing this full time.
After that, I teach how to systematize your business so that it becomes consistent and
reliable and a constant stream of income that’ll feed you for the rest of your life.
My mantra has always been “Never leave your house.”
It costs me three hours every time I leave the house to go look at a property or meet
with a seller or buyer.
You can learn how to do all your business remotely without leaving your home, with nothing
more than a smartphone and an internet connection.
Learning how to do this might come in handy depending on what happens next in this pandemic.
After that, you’ll learn how to keep properties that you buy and build a long term portfolio.
We use different financing structures for these purchases that don’t require banks
or investors or money people to implement.
All these structures rely on different types of seller financing, and those sellers don’t
need cash either.
They just need a property to sell.
You can learn all these techniques from me for free.
Just check out my other YouTube videos and subscribe to this channel.
I have over 700 free videos and tons of free articles that you can read on my blog at JoeCrumpBlog.com.
I also have a six-month personal mentor program where I teach investors how to build businesses.
It’s expensive, about as much as going to a community college for one semester.
But it’s a great way to get started as an investor without putting everything on the
line.
You can check it out at ZeroDownInvesting.com.
I also have automation and systemization tools for investors.
You can automate 90% of your business with these tools.
I call this software the Pushbutton Automarketer.
You can find out more about it at PushbuttonAutomarketer.com.
Well, that’s all I’ve got for now.
Remember to be good to each other.
Act honorably and ethically and treat each other with respect.
We’re all partners in this mess and we need to work together to find solutions that’ll
work for the long term.
I’m Joe Crump.
Hang in there, stay healthy, stay safe.