If a Rental Doesn’t Pass This “Test,” Don’t Buy It

Dave Meyer:If you are about to buy your first rental property or about to pick up another, I need you to stop and watch this. In today’s market, investors are rightfully more nervous before dropping a down payment. Down payments can be tens or even hundreds of thousands of dollars that you’ve worked hard for. And if you put it into the wrong property, it could set you back years. But of course, if you put it into the right property, you could fast track your financial independence. So how do you know which one is which? In this episode, Henry and I are sharing these stress tests we run before buying any rental. If a property doesn’t pass, we walk away no matter how good the deal looks on paper. So if you are nervous to put up that next down payment, this episode is going to help. Whether we give you the green light to relax and go out and buy that property or give you the red light to stop you from buying a very bad deal.Imagine just how much that peace of mind is worth. What’s up everyone? I’m Dave Meyer here with my co-host, Henry Washington. Today we’re dipping into the BiggerPockets forums to answer a few of your questions about real estate investing. Let’s jump right in to the first question. All right, Henry, this is a good question. Very curious your opinion on this one. It comes from Kate Thomas who says we are looking at spending a hundred grand out of pocket to buy a three-two single family home as a long-term rental in Woodstock. She also says nerves are setting in because that’s a lot of money. It is.

Henry Washington:Yeah, it is.

Dave Meyer:But she wants to know, is this how everyone feels or is this my intuition saying play it safe, leave the money in the stock market. We’ve wanted this for years. What do you think?

Henry Washington:I mean, to give a true opinion on this, I would definitely need some more information. But on its surface to answer her question, is this the way you always feel? Yeah. Yes. Yeah, it is. I’ve done hundreds of deals. And I still get nervous when I buy them, when I either use money, even when I don’t use money of my own to buy them. I still get nervous. I still think, oh, should I do this? I don’t know. Like to this day. So yeah, that’s pretty normal.

Dave Meyer:Do you think there are people who don’t? I get that way every single time.

Henry Washington:There’s probably people who don’t. I don’t know. I’m just not that guy. I still get nervous.

Dave Meyer:You’re writing a check for six figures. That’s a lot of money. You’re right about this, Kate. It is a lot of money. The one part of this though I would challenge is saying that playing it safe in the stock market is necessarily safer than real estate investing. I don’t know if that’s true.Let’s presume for the moment, Kate, that you’re buying the deal right, that it’s cash flowing, that you have cash reserves, that you’re buying at a good price in a good location. If that’s the case, then I think you can make an argument that real estate is safer than the stock market, depending on who you are. I mean, I think the stock market is very highly valued and I think that real estate risk of going to zero pretty darn low. If you really think about how much money you can lose in a situation like this, buying a single family home, let’s presume you’re using fixed rate debt. I wouldn’t say that’s more risky than the stock market, but I do understand feeling a little anxious about it.

Henry Washington:The only way to really lose buying a property like this is if you sell it before it becomes profitable. So as long as you can hold onto this for 10 years at a minimum, you’ll look like a genius at some point, I’m sure, even with modest appreciation each year. Plus you’re putting $100,000 down, which should I assume help with increasing the cash flow and hopefully putting money into your pocket and you’re buying yourself equity and hopefully you’re buying with some sort of a discount and walking into a little bit of equity as well. So I mean, it’s a safe-ish place to put your money given a lot of the assumptions you and I are deciding to make about this deal.

Dave Meyer:Yeah. We’re assuming that you listen to this podcast, Kate, and are going to buy this right. I do think though, one of the reasons why this happens so much where you get really nervous is because the normal thing is just to stick it in the stock market. If you go talk to your friends or whomever, you’re probably your financial advisor. They’re like, “Just stick it in the stock market. That’s safer.” It’s less common to interact with other investors who write these kinds of checks and can tell you that this is actually normal. It’s normal to feel anxious and that it’s relatively safe. So my advice, Kate, is if you are nervous about this, go talk to other investors.You’re clearly doing that on the forums. That’s a great place to do it in BiggerPockets. But also come to BPCon, right? Go to the BiggerPockets Conference and interact with people who are in the same shoes as you.Go to a local Ria event and talk to other people about this. I think that’s where you gain confidence in this industry where your average friend, your average cousin is not doing this and so it can feel riskier than it actually is because it’s less common.

Henry Washington:All you’re doing is you’re taking that $100,000 out of one account and you’re putting it into another account. And that account in this case is equity in this property. And if you look back over history, home values typically go up in price. There’s been some times where they go down in value, but for the most part they go up in value. And so the expectation that this $100,000 is going to disappear and turn into nothing is pretty unlikely. It’s going to be a little illiquid now. You won’t just be able to get access to it when you want to. And with you putting so much down, it helps you to be able to get access to some of that or all of that money back when you need to via a home equity line of credit or a sale or a refund, cash out refi.It gives you some options. So I don’t think it’s as scary as it may feel taking the $100,000 and putting it into this property, but it’s still going to be there. It’ll just be a little less liquid.

Dave Meyer:Yep. That’s a really good point. I doubt you’re putting 3% down if you’re putting a hundred grand

Henry Washington:Down, right?

Dave Meyer:You’re probably putting 25% down. That really insulates you. It protects you a lot in that kind of deal, makes it a lot less risky. Before we move on to our other questions though, just wanted to shout out. I did mention BPCon because it is on my mind and we were sending out speaker invites. Henry,

Henry Washington:Have you accepted- And I got mine and I signed my contract. So come send me speaking@bpecon.

Dave Meyer:Yeah. Oh, it’s going to be a lot of fun. If you guys have never been, BP Con is the best time. I look forward to

Henry Washington:It every year

Dave Meyer:This year. October 2nd through fourth, you can get your tickets at biggerpockets.com/conference. It’s in Orlando, Florida, so it’s going to be a lot of fun. Bring the whole family. Are you bringing your family?

Henry Washington:Yeah, we’re planning on bringing the family this time. Look, Orlando, last time we did it there, I mean, that’s arguably probably the most fun BPCon I’ve been to.

Dave Meyer:It was literally the best party I’ve ever been to my whole life.

Henry Washington:That was super fun. So excited to do that again. Last time in Orlando, you got to play golf though and I didn’t. All

Dave Meyer:Right. I’m going to tell you a secret that I contacted the golf course closest to the hotel to see if we could buy it out and do a scramble with BiggerPockets members. I’m so down. And it’s not that expensive. It is a reasonable thing that we could do. So I guess it’s up to our audience. If you want to do this, if you want to go golf with me and Henry and I’ll find other speakers to come to this too. If you want to do that, message me or Henry on Instagram. I’m at the data deli. You’re at the Henry Washington.

Henry Washington:That’s right.

Dave Meyer:Message us and tell us that you want us to do this. If we can get like 50 people, we can definitely do this. It would be a great time.

Henry Washington:Yes.

Dave Meyer:Anyway, I digress. BPCon is a lot of fun. Let’s move on to our next question. But if you want to golf, also tell us because we would love to golf. I’m

Henry Washington:So down.

Dave Meyer:Moving on. Next question.

Henry Washington:Our next question comes from Todd in Santa Barbara. Man, I love Santa Barbara. What an underage city. We don’t talk about Santa Barbara enough. I love that place. Todd says he started running every rental analysis through a what if I’m wrong by 15% filter. Oh, I like this. I

Dave Meyer:Like that.

Henry Washington:If the deal still works with rents 15% below my estimate, it’s worth pursuing. If it doesn’t, I move on. It’s a simple rule, but it’s killed about 60% of the deals I was previously excited about. Painful but probably saved me from a few disasters. What’s your go- to stress test before making an offer?

Dave Meyer:I love it, Todd. Good for you.

Henry Washington:Absolutely. Dave and I have talked about this many times where basically in underwriting, we’re trying to talk ourselves out of buying a property by underwriting so uber conservatively. It’s funny because I have an acquisitions manager who helps me field my leads and talk to sellers and she’ll call me sometimes and be like, “Hey, look at this deal and do this. If you do this and you do that and you get this just right, you can make 30 grand.” And I’m like, “Nah.”

Dave Meyer:Yeah, exactly.

Henry Washington:I’m leaving money on the table in deals because I just want them to pay me so much better than what maybe somebody else is willing to work for a deal. I think it surprises her sometimes because she’s like, “You sure you don’t want this one?” Yeah, I’m pretty sure. We’re going to leave that one on the table. I want doubles and triples right now. I’m kind of leaving singles alone unless there’s some criteria that just make a lot of sense, unless the location is super amazing and I’m okay pivoting my exit strategy to keep it if I need to. Other than that, I just underwrite so conservatively that if the deal still makes sense, I’m like, “I guess I got to buy it.

Dave Meyer:” Yep, exactly. That’s the approach to have. I like what you said about wanting triples and doubles, because then if you miss on a triple, you’re still getting a double. If you miss on a double, you’re still getting a single. If you miss on a single, you’re out. So that’s not good, right? You don’t want to do that. So that’s 100% why you just have to have high standards, especially right now, because the market is not going to save you. I think the rents stress test makes a lot of sense. I mostly stress that it’s vacancy. What if you made 20% less income? That’s really what it comes down to, whether it comes from lower rent or higher vacancy. I don’t really care. But what if your income goes down 20%? Very unlikely. Super unlikely. But what if? How bad of a situation would that be?I also pretty much always assume no appreciation. I’d put 2% appreciation long-term, which is lower than the long-term average, so I’m very conservative about that. And then if I’m doing a BER, just big contingencies in the renovation process both in timeline and budget. So I think those are the main things.

Henry Washington:I think the other thing to consider on a BER to be conservative is don’t assume the lender will give you 75%.

Dave Meyer:Ooh, that’s a good

Henry Washington:One. Yes. Loan to value. Assume a lower loan to value.

Dave Meyer:Or won’t appraise. Or it

Henry Washington:Won’t appreciate. For what you think

Dave Meyer:It’s going to … Yes, that’s a very good one.

Henry Washington:And then I’ll talk about in terms of flips, how do I protect myself? So on the flip side, the things that I’m adjusting in my underwriting or being conservative about are the not fixed costs, right? Holding costs. Most people like to budget three months to renovate a month or two to sell. I am adding an additional two to three months on top of my normal holding costs every deal I’m underwriting. So if I would typically underwrite it for six months, I’m doing it for eight to nine, just because some deals we list and they get three offers in two days, some deals we list and they get three offers in six months. And sometimes there’s no rhyme or reason. I can’t figure out why one versus the other. I’m stopped trying to figure it out and I’m just underwriting it into the deal

Dave Meyer:Conservative.

Henry Washington:Yeah, exactly.The other thing that we are doing to protect ourselves in the underwriting is we are not underwriting to sell at max ARV. We are underwriting to sell at mid ARV and then we’re still reevaluating when it’s time to list the property and we’re doing it very, very comp specific so that if I have comps and those comps are priced a certain way, I always want to be under what they’re priced at so that I force everyone who’s looking in that market to come see my property because more eyeballs equals more offers. And so those are the things that are protecting us in the underwriting.

Dave Meyer:This is just a good philosophy with just like management in general, I think. If you’re working with on a flip or a BER or whatever, the numbers you should be telling your team, your contractor, your agent, your property manager are the best case scenarios. That’s what you want people to be shooting for. Internally, you have to know that there’s a different number that still works. I think that’s … You’re not even being dishonest. You should say, “This is what I expect. I want to get 3,800 bucks a month. I want to sell this for $400,000.” But you need to know, okay, if it sells for 370, we’re going to be fine.That cushion is super important.

Henry Washington:Yep. I believe we said this on a previous episode. It’s not that underwriting conservatively is the hard part. The hard part is seeing when you underwrite conservatively that the deal just barely doesn’t meet your criteria and still walking away. That’s the hard part. That’s what you got to be able to do. And that means sometimes you’re leaving money on the table. I was talking with the seller and those of you who know me know I make very honest offers. I hope sellers know what I plan on making. That’s part of how I make my offer. And so when I told the seller, she had a higher end house in a more expensive neighborhood, very desirable neighborhood, but those properties take longer to sell. Buyers expect more to be done at a higher quality and I just want to be paid for the risks that I take on.And so I told her, I was like, “I just can’t do this deal. There’s not enough meat on the bone.” And she was like, “Yeah, but you’re still going to make 50 grand.” And I was like, “Yeah, I can’t do it. ” It just doesn’t fit.

Dave Meyer:Well, good question, Todd. And please let us know if you need more advice on your portfolio, Henry and I are willing to fly to Santa Barbara at your expense and play golf with you.

Henry Washington:And play golf with you and talk it over.

Dave Meyer:No, actually good question, Todd. I do respect this idea.This makes a lot of sense. All

Henry Washington:Right. I’m curious your thoughts on the next question, but I’m going to have to wait to hear those until after the break. All right. We’re back on the BiggerPockets Podcast and Dave and I are going through forum questions. These are questions that you guys have asked in the BiggerPockets forums and we are here to answer them. Dave, what you got for us?

Dave Meyer:All right. Next we have a question from a BiggerPockets community member named Eli who asks, “I just turned 20 years old.” Wow, forgotten what that feels like.

Henry Washington:Great. And

Dave Meyer:I’m finished a half gut remodel of my first home, which I recently moved into. I really fell in love with the whole process and I’m very confident that this is what I want to do for my career. Anyway, I’m going to buy a distressed property around the 60 to 80K range and most likely going with the Burr and I’m just wondering how much cash reserves I should have. Any advice is greatly appreciated for someone just starting out. And by the way, Henry, we did some research. He is in Montpelier. I can’t pronounce that. I took French for six years. I can’t even say it. Anyway, Montpelier, Ohio is where Eli is. That explains the 60 to 80K range for the Burr property. What’s your advice for Eli?

Henry Washington:If the property’s already stabilized, I typically want to have between 10 to 15, maybe $20,000 on hand because if a roof needs replaced for some reason, that’s typically the price point that that’s going to fall in. That may be probably the most expensive repair, right? But that’s for a property that’s stabilized. Seeing as if this property is not stabilized, I think you need to have that on hand, right? What’s it going to cost you for the most expensive repair? And then you need to have some cushion above and beyond your repair budget. So again, I’m making assumptions. I’m going to assume that your repair budget for this property is going to come in financed in with part of your loan, because that’s what most people do. So I’m assuming you’re not paying for the renovation out of your pocket. So what I would do is I would make sure that you’ve got enough to cover maybe 15 to 20%, 25% over your repair budget.Because if you’ve never done a repair on a property before, you’ve probably under budgeted it. It’s probably going to take you a little longer than you expect. You want to be able to cover those overages. Typically, you’re going to have to cover those overages out of your pocket. That’s my pretty generic answer is 20 to 25% over your rehab budget and then another 10 grand-ish to cover a very expensive repair if it comes up after you’ve got it as a rental property.

Dave Meyer:I like the way that you frame that because when we talk about cash reserves on the show most of the time, we’re talking about the hold period when you’re just owning and operating the rental property long term. Honestly, I just estimate it to 10 grand, something like that, five to 10 grand that usually covers most expenses. As you get larger, you can just … I sort of keep a 30 grand buffer for

Henry Washington:All

Dave Meyer:Of my rental property.

Henry Washington:Exactly the same.

Dave Meyer:You don’t need 10 for every single property. The 80 grand repair I just ate, I had to figure that one out, but most of the time 30 covers it. So I think that’s totally fine. But I think what Henry’s right about is in your situation, Eli, for this, you’re new, you’re young. I’m going to make again the presumption you don’t have a lot of cash on hand and you’re looking at a distressed property. I think 20% makes a lot of sense and maybe even higher.

Henry Washington:The bigger the renovation, the more you should definitely have a side.

Dave Meyer:Do you think percentage-wise oral? I

Henry Washington:Mean, percentage-wise is fine. Yeah. That’s why I say 20%. I’m assuming this rehab is going to cost about as much as the home, maybe more.

Dave Meyer:I agree. Right. Yeah. So I think if you’re going to renovate it and think it’s 60 grand renovation costs, I think you need, you said 20%, 12

Henry Washington:Grand.

Dave Meyer:Yeah, that might not even be

Henry Washington:Enough. That

Dave Meyer:Might be enough. You’re right. 15, 20 grand. Yeah, you’re probably right. Because then you also need a little bit of a contingency if it takes longer. Not just your renovation costs, but holding costs, especially when you’re new to this, an extra couple of months eating the debt can be expensive. I’m looking at Montpelier, Ohio, not a lot for sale there. So I’m wondering what rent demand will be. You might have vacancies there. So I would say 15, 20 grand on this one would be my estimate, but it really is our always, always err on the side of caution on these things. Always assume things are going to take longer, they’re going to cost more. And then if they don’t, that cash reserve, you get to use it for your next deal instead.That’s the better situation.

Henry Washington:Yep.

Dave Meyer:All right, Henry. I got a question that I think every real estate investor is wondering about right now. It comes from Junice, a property manager in Fort Lauderdale, Florida. And the question the title is new here, what’s the hardest part of managing your rentals recently? We might need a whole episode for this one. But Junice says, “I currently manage 250 plus multifamily units.” Wow. Handling leasing, maintenance, coordination, and resident relations. From the management side, it’s been interesting to see how differently things can play out depending on the systems in place or lack of them. Most of the time it’s small inconsistencies that build up over time and turn into bigger issues. I’m really interested in learning how investors who self-manage are navigating things right now. What’s been the most challenging part of managing your properties lately, tenant related, systems and processes or something else, maybe all of the above.That’s my own commentary, but what’s your take on this, Henry?

Henry Washington:Well, I haven’t self-managed in close to four years.

Dave Meyer:Congratulations.

Henry Washington:Thank you very much. Yes. Here is what I was struggling with. Again, it was several years ago, but this is the thing that I was struggling with. It was tenant turns in a timely fashion. And mind you, I had gotten to a point where at this time I think I had about 65-ish and a lot of the reason the turns were challenging is because I don’t have in- house maintenance and so I was using contractors to handle maintenance and turns, plus I was also flipping houses. And so flipping houses took priority a lot of the time because so much more expensive for me to hustle and get those things done versus a lot of the times what the rent was going to be if I took an extra week to get a turn done. But what started to happen was this compounding effect. If you’ve got one tenant turn you’re managing that’s easy.If you’ve got six or seven tenant turns that are all coming up within a week or so of each other, it just became too time consuming and tedious to manage all of the intricacies that go on with that. And so I had a choice to make. It was either I find a company who can take on all of this for me and handle it more efficiently, or I have to hire somebody in house who can focus solely on that thing.

Dave Meyer:Yeah. Tenant turns suck. No one likes doing that. It’s not fun. If the tenants did something wrong that you’re getting compensated to that- Who’s responsible for parts of the tenant turn, right? Exactly. Yeah. It’s just not a lot. I agree. Yeah, it is. So I agree with that. I’ll say I also stopped self-managing six years ago, did it for 10 years though. So remember it actually fondly, I don’t mind. I didn’t mind doing it at the time, but I will say that right now, I think the hardest part of managing rentals is controlling expenses. And it’s not that it can’t be done. It’s just so much shopping around.You can’t trust anything anymore. I just feel like that’s kind of where I’m at. Every quote just feels like you’re getting kicked in the ribs.You’re just like, what? I’ve never seen this in my life where I am literally seeing quotes now two or three X times what the lowest quote will be. And I’m not talking like small things. I am sure you deal with this with flipping all the time, but even in rental properties, this is getting crazy. Redoing a bathroom now it spans from $7,000 to $35,000. It’s unbelievable and it’s like I’m willing to do it. I obviously do it, but like- It’s so true. It just takes so much time and it’s so annoying. And it’s not even my time. It’s like I want to do it for the tenant. Maybe there’s something wrong and then I have to spend three weeks getting quotes before I can even start the work because I’m not paying $25,000 for you to go to Home Depot and get a Kohler toilet and replace it.I’m sorry. I’m just not. Not Kohler, American Standard Toilet and

Henry Washington:Replacing it. There we go, baby. That’s what I’m talking about.

Dave Meyer:Yeah, exactly. You got to go American standard.

Henry Washington:And that’s the difficult part about property management even after you outsource it is because if you don’t train your property managers and force them to get multiple bids, they’re just going to get one and it may be the most expensive one and they’re going to go with it because they’re trying to be efficient. But right now I’m really pushing back. If it’s over my not to exceed amount, then I need you to get three bids because some of these bids discrepancies are

Dave Meyer:Crazy. 100%. I’ve been dealing with, this is the managing of the managers that I feel like I need to just kind of be a pain in the ass about. I’m like, these are big projects. Some of these are like full renovations of a unit. I got quote for $35,000 for one of them, called around, I found another one. It was like 26. I mean, nine grand for the same thing. These are cheap homes. Those aren’t expensive units I’m talking about. Nine grand is a big difference. So I think that’s the big thing. And it’s not just trades. Insurance costs right now are the same way. You need to shop around on that. Lending obviously is a little bit, if you’re going conventional, it’s a little tighter banned, but even in the private money or the DSCR space things are really different. So I think that’s one of the most difficult, but it’s also the best use of time because you can save so much money.When you actually think about it, it’s a couple of hours to save tens of thousands of dollars. So that is well worth it. I’m just being grumpy and I’m annoyed that I have to do it because you didn’t have to do it like five years ago. You didn’t have to do this.

Henry Washington:Totally agree.

Dave Meyer:All right. We got to take a break, but we’ll be back with more questions from the BiggerPockets community right after this. Welcome back. Henry and I are answering the BiggerPockets community questions. Henry, what’s our next question?

Henry Washington:This question comes from David P. He says, I have an excellent tenant that has lived in my property for the last four years. She called me earlier this week and said she and her husband are separated and she needs to start looking elsewhere. They were paying $4,500 a month for a large house here in Los Angeles and she told me that her budget is now $3,800. I told her we can do $4,000 a month for a new one-year lease and then reevaluate later. And I was essentially breaking even on the property at $4,500 a month. So now I’ll be slightly negative each month. Would you guys do the same to keep an excellent tenant? A one-month vacancy will be almost the same as a one-year price reduction. So I figure it’s better to keep someone who’s been great this whole time.

Dave Meyer:That’s a tough question. This is a tough

Henry Washington:Question. This is a hard one.

Dave Meyer:I would say philosophically, I would lower rent for a good tenant. On principle, this makes sense to me the way that you’re thinking this through. The thing that’s holding me up about this particular situation is you’re only breaking even and now you’re taking a loss.That’s a tough situation because David’s also saying a one-month vacancy would be almost the exact same as a one-year price reduction. I don’t know. It’s more like a two-month vacancy, right? You’re taking 700 bucks a month off rent. That times 12 is $8,400 a year. That’s basically two months of rent. So could you find a good tenantIn less than two months? I would hope so. And I do really respect the idea that you’re like, “This is a good tenant as a good person. I want to do that. ” It’s the thing we always talk about on this show. You put yourself at a lot of risk if you’re not cash flowing. And if you make this your default, how does it get better? Because you’re basically investing into this tenant and saying, “I’m going to keep this tenant indefinitely.” And so you’re just going to lose money indefinitely. I don’t really like that idea. If this was temporary, I would personally be able to live with that. Or if it was in a multifamily unit where it was like, okay, I might make a little less overall, but I could still cash flow the overall financial position of the portfolio, still good,

Henry Washington:Then

Dave Meyer:I would be okay with it. But it’s like, now I’m just going to have a drain on my own assets. I don’t like that.

Henry Washington:I think it’s fine to lower your rent a little bit to accommodate an excellent tenant for the right property. In this particular situation, I wouldn’t do this. The things that concern me are putting yourself in the negative every month as a default. So what you’re saying is if everything goes great and she pays her rent on time, you’re still going to lose money. That’s scary. The other part that scares me about this is this financial situation is new to her. And so we’re hoping that she can afford the $3,800 a month rent, but it sounds like she just got into this situation herself and so you don’t really know. So if I was going to do the situation, I would definitely put her on a month-to-month lease for a little while to see if she can continue to pay even that $3,800 a month and do that consistently.And then I might look to put her on something more long-term, but I don’t know that I would lock her in long-term off the bat just in case you need to end that lease so that you can really find somebody who can pay more closer to market if you need to. But in my opinion, it’s just a little too risky if you’re going to be losing money and you’re not quite certain if her new financial situation is truly what she says it is.

Dave Meyer:One of the things missing in the information here is like, what is market rent? Yeah. Because David said 4,500 bucks for the last four years, market rent might be 4,800 at this point. Rents might be higher than that. And I am not one to say you should be maximizing rent all the time, but if market rents are 48 and you’re allowing it to go out for 38, that’s $12,000 a year, you’re just giving up and coming out of pocket to pay your mortgage on. I am sensitive to the that, but I personally would not do it. I’d figured out a way to be flexible with this person andHelp them, don’t say you have to get out by this day, but figure out a way to help them transition to a place that they can afford. And in exchange for that, work with this person so that you can show the property while she’s still living there and you don’t have that one month of vacancy. I feel like this is one of those things you clearly, David, have your heart in it in the right place where you want to do the right thing, but I think you can do that in a way where you can put this person in a situation where she can comfortably pay because it’s not right to put her in a situation she can’t and where you can avoid vacancy and get market rents at the same time.

Henry Washington:Yep.

Dave Meyer:All right. Well, this was a lot of fun. Great questions today. I think we got some unique and

Henry Washington:Interesting ones. So

Dave Meyer:Thanks for weighing in here. Before we go though, reminder, we found these questions on the BiggerPockets Forum. So if you have real estate questions of your own, which you definitely do, go to biggerpockets.com/forums and get advice from more than three million members. It’s totally free and we might even pick your question for a future community question episode of the BiggerPockets Podcast. Thank you all so much for listening to this episode. I’m Dave Meyer. He’s Henry Washington. We’ll see you all next time.