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Millions of Americans skipping payments as wave of defaults and evictions looms

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Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#391

Earlier quoted context omitted.

Every time we advertise for a new tenant we get many calls that go like this: "Do you do criminal background checks?" "Yes." "Ok, thank you, goodbye."

To me that's very up-front. There might be a lot of people who would try to hide disqualifying information, hoping you don't find it. There are probably a limited number of landlords who rent to felons, and they have to just make 1000 calls to find a place.

They also get it on both ends. Felons make 41% less than their same age counterparts [1]. Thus they are both felons, and have lower income (as well as a higher likelihood of evictions, etc).

I've been reading Evictions: Poverty and Profit in the American City on recommendation from HN and it has been eye opening. They don't make 1,000 calls, but there are several stories of people making a little over or under 100 different calls because of prior evictions and/or felony convictions. The quantity is only magnified by the fact that they're limited to apartments that are ~$500/month (which is already ~75+% of their monthly income). The book is heavily anti-landlord, although I'm not versed enough to say whether that's the truth or if there is a heavy bias.

I don't know what the solution is. There's a delicate balance of trying to give people a chance to recover or rehabilitate without also forcing landlords with cheap property to enter into blind negotiations and potentially damaging their own property. Frankly, Section 8 seems like a bad solution, and that we should go back to government owned and leased housing where you won't be evicted for complaining about sub-standard conditions because the landlord knows you can't afford a lawyer.

Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#392

Earlier quoted context omitted.

The largest insurance claim I've had was for a little over $5k for a vehicle repair after collision while avoiding a pedestrian in the street. I'm not sure if you think that's "large" but it was very painless to do IMO.

Nope, not large. A friend had an Aston Martin that caught on fire. About a $120k car. It took months of investigations to close that claim. Insurance pointed finger at AM, AM wanted their own investigator, fire inspector involved, etc. And that’s not even large relative to a house or business.

> And that’s not even large relative to a house or business.

It's way worse for a business, when I went to the MDRS for a week the bistro's kitchen in our Flagship restaurant went up in flames. The cause was unknown, but all in we lost 4.5 weeks of work due to unnecessary down time, not including the equipment repairs, contractor labor and misc costs because the city's investigators wouldn't come out to assess the damage in the allotted time slot to investigate and approve the repairs because of snow (IT'S COLORADO!) and then the Insurance stonewalled and tried to delay things further by not playing nice with the city that delayed reopening.

All told I wouldn't be surprised if we lost over a couple 100ks in lost profits and limited operational costs (we still had the bar/grill upstairs) and having to rebuild the Kitchen plus labor. Corporate paid us bonuses, which were really just 1/3 of our normal pay to help offset expenses, because of limited hours.

Bourdain was right: restaurants really are horrible businesses. Insurance which is mandatory, compounded with local government regulations and approval, makes it way worse.

Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#393

Earlier quoted context omitted.

$28000 for a car is cheap , especially for a truck. For comparison, the 2020 Honda Civic starts at just shy of $20000.

Unless you need the carrying capacity to survive, $28,000 for a car is expensive. Buy a low mileage, older sedan for $5000-$7000. It’ll last 10 years and rarely have problems.

[deleted]

Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#394
post #227

Earlier quoted context omitted.

Litigate against the tenant? You're probably right. But insurance? Maybe.

Every time I see comments like this, and no direct offense intended, It always strikes me as coming from somebody who has never filed large insurance claims before. Been seeing this so much with riots lately, "oh you have insurance right, why you mad about your business getting destroyed?". If only it was that simple.

My dad was an insurance adjuster. He loved denying claims more than anything. "I'm not good at math, but I sure can subtract!" Fucker had a major power trip. Also had a slight anti-corporate bent, so he loved approving claims too.

Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#396
post #266

Earlier quoted context omitted.

$28000 for a car is cheap , especially for a truck. For comparison, the 2020 Honda Civic starts at just shy of $20000.

An absolutely amazing claim. $28,000 is cheap for "millions of Americans". What's a moderately priced car to you? 50K?

Did I say “cheap for millions of Americans”? I’m pretty sure I just said “cheap”, as in cheap compared to most new cars.

Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#397
post #59

Earlier quoted context omitted.

Unfortunately, as part of the unfolding of the post 2008 recession, a lot of rentals shifted from individual or smaller landlords to larger corporate landlords whom take a much more impersonal approach to making it through the depression. To some degree, to the extent they can take out holdover loans and let rentals sit empty, they will do just that - irregardless of the social utility of compromise. https://www.thea…

Corporate landlords are rational and reasonable negotiators who will readily respond to market signals. Small landlords are a crapshoot; you might get one who just prefers an empty unit over lower rents. You can easily see this from craigslist data right now. Large buildings are lowering rent faster than small buildings and single-family houses.

This is more about the specific financials of the property and the portfolio of the owner, for both small and large owners. Many small owners are, like, funding their grandkids trust funds and a few lost payments are not worth the trouble. Large owners may have occupancy covenants, or, conversely, may have appraisals that have to be maintained.

My personal experience is small owners are "reasonable" and open to building a relationship and large owners could give an eff, but mileage varies. Cheers.

Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#398

Earlier quoted context omitted.

My understanding is that the appeal of owning real estate yourself is housing mortgages gives you: (1) the cheapest leverage available to retail investors and (2) a loan that can't be margin-called. In an upmarket, this leverage lets you juice your returns. Say you only have $200,000. Then by getting a mortgage of $800,000 you get ownership of a house worth $1M. This gives you the right to the cashflow from renting t…

> a loan that can't be margin-called What do you mean by this? That the loan can't be eagerly collected in full? That the repayment is on a schedule?

Say you have $100,000.

You could buy a house worth $500,000 with 20% down and a 30 year note. As long as you pay the mortgage, it doesn't matter how much the market value of the property changes. A drop of 40% in real estate prices that lasts for five years is not necessarily a problem.

On the other hand, imagine you put $100,000 into a brokerage account and were able to get 2:1 leverage. You could then borrow $100,000 and buy $200,000 of stock.

However, if the market runs into a bad patch and that stock decreases in value to $120,000, your equity is now only ~16.7%. This is below the minimum margin requirement (25%) for your account. Your brokerage calls you up and says you need to put an additional $10,000 in your account - that's a margin call.

If you don't have the $10,000 then your brokerage will sell enough of your position to bring your account back within requirements; possibly at the bottom of the market.

Real estate: 5:1 leverage, no margin call Margin account: 2:1 leverage, plus margin calls

Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#399

Earlier quoted context omitted.

you have to be careful. I've noticed Section 8 neighborhoods tend to attract a lot of Crime.

Attract crime? Section 8 neighborhoods are like gated communities for poor people except instead of gates they have excessive police presence, few opportunities, overpriced essential goods, poor access to banking but usually several check cashing shops and payday lenders, minimum wage jobs or worse, bad schools. Section 8 neighborhoods are a dumping ground for the people and families society deems undeserving.

Society pays for housing, health care, schooling, Pre-K, pre-pre-k, food, phone/internet, and more for folks in section 8 neighborhoods. They aren't being abandoned, they are being supported by society at considerable expense, at a higher standard of living than the average human being--in return for nothing.

Meanwhile the average worker pays 30+% of their income in federal, state and local taxes--basically working unpaid from Jan 1st through Mar 31st--and they are supposed to believe that the poor are the victims? Yikes!

Re: Millions of Americans skipping payments as wave of defaults and evictions looms

#400
post #325

Earlier quoted context omitted.

Thank you for being a decent human. Is racism more prevalent in Italy ?

Thanks for the kind words! I just did what it felt right I'm inclined to say that racism in Italy is different from the general notion of it: I mean, there are certainly racists in Italy, no point in denying that, especially towards some ethnicities (Africans, middle Eastern and South Americans in particular, they are considered too loud and unreliable - coming from us it's really something - and often also worse tha…

I only spent a month and a half in Italy, almost all of it in Milan, but I was around italian families a lot. The north south thing really seemed like a big deal, though obviously for some more of a joke than others, as you say.

In at least half of the young families (kids aged elementary to high school) I was around in Milan, one or both parents were originally from the south. They spoke of it almost like how immigrants do: they'd moved north for better jobs/better life, with the implicit sacrifice of being close to family/environs where their real roots were. I guess the southerner stereotype to northerners was sneaky/mafia etc, while the reverse was something like overly bourgeois, slick without substance, moneygrubbing etc. Very interesting and a bit sad (that development in the country seems so uneven).

I never got to visit the south so if I ever get to go back I hope to spend just as much time in the south as I did in the north.

The only other place I know well with such strong and old regional beefs is South Korea and that's really only between two regions, plus people from Jeju stereotypically don't trust mainlanders I guess.

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