Newport Beach, CA (PRWEB) July 03, 2014
Is Residential Real Estate Investing an active or passive business? Over the last fifteen years of being a landlord , Ali Roushanzamir, MBA, President of Birch Capital, learned through experience that real estate investments can become an "active business", if one doesn't have control and software systems in place. Pain and fear of loss can be compounded if an investor has limited resources or can't afford professional property management. Tenants can cause significant physical damage, reduce income and give you unbearable anxiety. Roushanzamir says, as a landlord it may become challenging and costly to deal with abusive tenants, so the question one may ask, is this all worth it? Well, the answer is not simple; Ali Roushanzamir, says with savings rates at historical lows and baby boomers in need of retirement income and real estate investments in low income areas producing high yields, an investor may have no other choice. Roushanzamir states, based on our investment experience, apartment yields have ranged from the high double digits 10%+ to 20% or more, although it can depend on an array of factors. Roushanzamir says, the investor should factor in the added legal or compliance costs into their overall return on investment. Recently though, Birch Capital deployed a secret technology allowing investors to digitize documents, record property conditions, and streamline rent payment process. Birch Capital’s software system, “BCIA” will give investors the tools in their tool box to help control costs, said Roushanzamir.
First, in 1969 the Warranty of Habitability doctrine became law, so landlords would keep their properties in good repair and provide tenants with quality living standards (Heskin, 1978). Roushanzamir states, this doctrine changed low income real estate investments in California dramatically; landlords should now factor in tenant law abuse on their return of investment. Once this law took effect, California Landlord/Tenant laws became complex and extremely difficult to navigate, says Roushanzamir. According to warranty of habitability article (Heskin, 1978), low income real estate investments began to suffer due to this new law. According to the article, this survey conducted in the Southern California area stated reasons why tenants complained on eviction response forms for low quality housing. The table in the article referenced, depicts the challenges a landlord has investing in California's low income areas, says Roushanzamir. Landlords in California are held responsible for their properties, and tenants may hold them accountable for the condition of the premises (Heskin, 1978). Based on the survey of “complaints about conditions”, landlords must now monitor and document property conditions on a regular basis to prevent tenant abuse, intentional damage, or habitability concerns (Heskin, 1978). The question every investor should ask is: How much time and expense does this add to their investment, and how does one account for this in the analysis process, according to Roushanzamir. Roushanzamir states, with BCIA software application, landlords can document property condition with Geographical Information Systems based, (GIS) based pictures or videos, and attach those to tenant digital file. Ultimately, this leads to cost control and effective real estate management, believes Roushanzamir.
On the same token, in the case of Roushanzamir Vs. Vonk, filed in the Superior Court of California, County of Riverside in 2014, the defendant who refused to pay rent, claiming that she should get free rent because her original unit was moldy. According to court documents, which ultimately went to trial in the County of Riverside Superior Court proved that the tenant while being represented by a Free non-profit attorney at Inland Counties Legal Service, were not reasonable. In court documents, tenant alleged, that she was living in a unit on the properties of Mr. Roushanzamir, and after complaining of issues with the Plumbing and Mold growth, Mr. Roushanzamir moved her to another unit in good condition. The tenant stated in court documents the move was temporary, and she should not have to pay rent till her old unit is in good repair, although the rental agreement may have shown a different story according to the Judge in the case. Mr. Roushanzamir brought the court evidence in this case, through text correspondence, using Birch Capital’s text records system, which showed clear intent to contract the units was present, and Ms. Vonk declined to acknowledge. Ultimately though pursuant to court records, the Judge in this matter ruled for the plaintiff Mr. Roushanzamir, because the evidence proved he had clear intent to contract with the defendant on the new unit. In this case, Birch Capital’s software technology allowed for court usable text evidence to counter a tenant’s false claims said Roushanzamir.
The preceding case does not in any way conclude that all low income tenants abuse the legal system, nor does it determine that the California Tenant/Landlord law works, says Roushanzamir. But it does conclude that the tenant landlord laws are difficult for real estate investors to navigate, Roushanzamir feels. A real estate investor should consider these challenges prior to making an investment decision, deploy BCIA, GIS based software for condition monitoring, digitize documents, and automate the billing process, Roushanzamir states. Also, without proper guidance and systems in place a real estate investor may be faced with difficult legal decisions, or costs. Roushanzamir learned through personal investing, developing an effective software system is tantamount to success in the low income residential markets. Investment real estate ownership may produce significant yields, high income, but landlord/tenant laws will ultimately reduce returns, and cause added headaches of management. Roushanzamir says all residential real estate companies, or investors should consider this technology, as it saves tons of money, and significantly reduces management costs.
66 Cal. L. Rev. 37 (1978)
Warranty of Habitability Debate: A California Case Study, The; Heskin, Allan David
Roushanzamir Vs. Vonk, California Superior Court 2014, County of Riverside, Moreno Valley Court Case Number # MVC1401598
About Birch Capital:
Birch Capital is a software development company, registered investment advisor, and real estate investment brokerage firm. Birch Capital specializes in truely passive real estate investments and direct investments.
Ali Roushanzamir, MBA
Ph: 888-384-0967 Ext. 801