An aviation connection owns 250 apartments in the middle of the country. I asked him whether he’d lost a lot of money during coronapanic when nobody had to pay rent and he was barred by order of the CDC from evicting anyone. “No,” he said. “Nearly all of my tenants kept paying and, in fact, many of them applied for and received government assistance to pay their rent. I already had 20 percent Section 8 vouchers and ended up with about half of my income coming from the government.”
He took the opportunity to refinance his properties at a 2 percent rate and also substantially raised the rents that he was charging (i.e., his costs fell and his revenue soared). He estimates that his property doubled in nominal value between 2019 and today. He raised rents by 50 percent.
Who else got rich? “The local car dealer [in his small town] bought a Phenom 300 and a Bell 407” (that’s $15 million worth of aircraft; the Phenom 300 is made by Embraer in Brazil)
What else has been working for him? Open borders. “I love having Latinos as tenants,” he said (sorry about the hateful failure to use proper English (“Latinx”), but it is a direct quote), “but sad to say that the English-speaking tenants get upset if there are too many Latinos in their complex. They complain about Mexican music being played and noise. I don’t want to be racist and exclude people on the basis of being Hispanic because it makes other tenants upset.” Has the rising cost of labor eroded his increased profit margin from the 50 percent rent boost? “No,” he replied. “White people have pretty much stopped working, but there are plenty of hard-working Latinos. I wish that I spoke Spanish because then I could do a better job explaining what I need.”
Seems to agree with the flood of landlords bragging on twitter. Residential inflation is a free for all, now that office buildings are being given away for less than houses. Whites may have stopped working but so have landlords. No need to make anything under inflation targeting.
250 apartments or 250 apartment buildings?
TS: He is in a small town! There aren’t 250 apartment buildings total, I don’t think. Keeping on top of 250 units is more than enough work for him.
First off the term “Landlord” should not be used. It invokes some type of feudal system where the “landlord” can take advantage to the tenant. In my experience the tenants always take advantage of the so called landlord so a much better term is “housing provider”. I was going to call your aviation friend a liar but realized he is not the one operating the phenom 300 and bell. I bet the aviation friend can barely operate a decent single engine piston with only 25million in real estate assuming he is making the normal 2 or 3 % after everything. He’d be lucky to eek an after tax income of 200,000 grand. Probably makes more sense to marry an anesthesiologist than becoming a housing provider.
The housing provider has a couple of decent cars, a nice house, a wife who works, and is currently without an aircraft but has bought and sold various single-engine piston machines, just as you surmised.
“Master Bedroom” => “Primary Suite”
“Landlord” => “Housing Provider”
“Squatter” => “Pro Bono Tenant”
Anything else we can redefine?
Correct that “landlord” should not be used. This guy is obviously a slumlord and tax parasite.
“Low Income / Poverty / Welfare Recipient” => “Victims”
“Sluggard / Slackers / Loafer / Deadbeat” => “Victims”
“LGBTQ+ / Transgenders / Queers” => “Victims”
“Illegal Migrants” => “Victims”
Someone paid for this.
Fixed income investors got wiped out, between nominal capital losses and real purchasing power losses.
Who are the biggest fixed income investors? Banks and the Fed.
Banks will get it back by wrecking depositors while the Fed will get it back through taxation.
The Embraer Phenom 300E is built in Melbourne, FL.
https://www.floridatrend.com/article/33526/embraer-brings-over-150-jobs-to-melbourne-florida-facility
“Embraer’s Melbourne campus serves as the company’s headquarters for its Executive Jets unit. Opened in 2011, the facility is home to the assembly line for two of the company’s light-jet aircraft: the Phenom 100EV and the Phenom 300E. Employees also work on the final assembly of the Praetor 500 and Praetor 600, the most disruptive and technologically advanced mid-sized jets on the market. In addition, the 67-acre campus includes a 58,000 square ft. Global Customer Center and state-of-the-art Engineering and Technology Center.”
DP: To say that the airplane is built in Florida is a stretch. They do bolt together stuff that comes out of shipping containers from Brazil, hang the engines (imagine the worker who puts a sticker on the nacelles reading “Like Jeffrey Epstein, this engine didn’t hang itself”!), perhaps plug in the Garmin boxes, and apply a beautiful paint layer. And that can be efficient because it saves shipping the engines and avionics down to Brazil and then back up. But the airplane part of the airplane is made in Brazil.
Corona did not affect my long-term tenant’s ability to pay rent for my waterfront FL condo, but in July 2022 I got an offer I couldn’t refuse and cashed out at a 300% gain from when I purchased it seven years earlier.
As a white person, I am working, but my income is down by about 80% compared to pre-COVID.
This is a heart-warming video from a real estate guy about how I need to experience further “pain”:
https://twitter.com/keithboykin/status/1701955641747644807