Oklahoma Landlord Bet $1,000 Rentals Would Win In A Downturn, But That Is Where The Evictions Are, While His $1,200 To $1,500 Homes Never Cause Problems

Oklahoma City investor Cameron walked into a house his company had just finished evicting, and it did not take long to see what went wrong. In a video for @CamburkeRealEstate, he says he has bought and sold real estate full-time for six years, and this was a hard lesson in who you let move in.

A blue house with autumn trees and parked cars on a residential street.

Before he opened the door, he made a confession. He had expected cheap rentals to be the safe bet in a rough market. He now says the opposite turned out to be true.

“Affordable Housing Is Going To Win” Was His Plan, Until Evictions Crept Up

Going into this market cycle, Cameron figured affordable housing would win because that is what people need. The market was getting tighter and people were getting squeezed. He still agrees with that on paper, and he owns a good amount of affordable housing.

But he noticed evictions creeping up this year. He says affordable housing is where the most headaches in his portfolio have come from.

In Oklahoma, he considers affordable to mean $1,000 a month or less. Everything at or under that line has caused his biggest problems, which he found odd.

The $1,200 To $1,500 Homes Are Where He Says Nobody Is Causing Trouble

What has done extremely well for him is the $1,200 to $1,500 range. These are a little nicer and a little larger, mostly three-bedroom, two-bath brick homes from the 1980s. In his words, nobody has been “giving us any problems there,” and everybody makes their payments.

He is careful to say this is a general statement and to take it with a grain of salt. He says he does this full-time and it has been working so far, but that does not mean it will work forever.

His theory is a different tenant mix. Not always, but sometimes you get tenants who do not manage money well. Vetting helps a ton, he says, but you can vet all you want and still have issues.

Same 3X Rule, Very Different Cushion

Here is the number that explains it for him. Everyone he rents to has to earn three times the rent. On a $1,500 rental that means $4,500 to $5,000 a month in income. On a $700 rental it means $2,500 a month.

The ratio is the same, but the amount of spare money left at the end of the month is very different. That cushion, he believes, matters when something goes wrong.

Prices Are Up Everywhere, So He Looks Micro

He lists the headwinds: Treasury and bond rates are up, prime is up, inflation is up, oil prices are up, and material and labor prices are up too. So how do you win when the indicators look poor?

His answer is to stop obsessing over national headlines and look micro. Nationally, the consensus sounds gloomy. But in Oklahoma City, he says, prices have appreciated over the last year, the job market is stable with a lot of health care and blue collar work, and the average home price is still below the national average.

He also sees national tenants moving into the state. Days on market are good, and inventory has crept up but is still healthy. He adds that people made money in 2008, too. It depends on which side of the market you are on.

Inside The Eviction House, A Vehicle, Broken Windows And Mice

Then came the walk-through. A car was still sitting out front, and he says under the landlord tenant act in his state he has to wait 30 days before he can have it towed. He advises everyone to learn their own landlord tenant rules.

The flower bed was neglected, trash was everywhere and windows were broken. Inside, the smell was awful. He spotted mice and signs of cockroaches, including on the ceiling. Floors that had been resealed when the tenant moved in were destroyed, and he says the place had been smoked in.

He says it is a really good example of placing the wrong tenant. He says he cannot recall who placed this one, but there were issues from the start. In his own words, they should have evicted sooner, but they let it ride and are paying for it now.

Five Options, One Rule He Says He Bent

He lists his choices: sell it as is, fix it and sell it, fix it and rent it, or clean it up and do a lease purchase. The work list is long. Reseal or replace floors, redo the kitchen vinyl plank, exterminate, repaint, and swap hinges, hardware and light fixtures.

He says he is all in on this two-bed, one-bath house with a one-car garage at roughly $85,000. It rented for about $1,150 to $1,200 a month, so it penciled out on paper, and the cash flow had been great until now.

Where did he slip? The house sat on the market waiting for a tenant, and he believes his team bent its leasing rules to place someone it normally would not have. He says that is a lesson for himself and for everyone watching. “Stick to your leasing rules.”

He owns about 70 doors, and he says a portfolio that size will produce scenes like this, including a second or third one this year. His plan is to move money into nicer assets. A move-out on a $1,600 a month rental, he says, will be super clean by comparison.

What Small Landlords Can Take From His Rant

He also gave a nod to something outside the business. Cameron sits on the board of a nonprofit in Oklahoma City called the Christmas Brigade, which sponsors families whose kids might not get a Christmas. He says it sponsored 50 families and 150 kids last year, and is hoping for 75 families this year, with nobody on the board taking money.

Follow your leasing rules every time, even when a unit has sat empty.
Check your state landlord tenant law so you know how long you must wait before you act.
Look at your local market, not just the national headlines.
Remember that three times the rent leaves more cushion on a $1,500 rental than on a cheaper one.
When a bad eviction ends, he says to take a deep breath and move on rather than chase money you will not collect.

His closing line sums it up: “You’re not failing unless you stop.” He says he did not fail, he learned.

Willow and Hearth