All Forum Posts by: Bob Hines

If you're looking for investment management or advice, Registered Investment Advisor (RIA) is a specific type of firm that is required by the SEC to act as a fiduciary. The CFP board requires CFPs to act as a fiduciary in order to keep the designation. While not backed by the power of law, earning the CFP marks is a large undertaking and most will not want to lose the privilege to use them. You will still want to do some due diligence and see if they are a good fit for you, but this will get you pointed in the right direction to start.

A great way to find a local CFP is to use the CFP website https://www.letsmakeaplan.org/

While I don't know for sure, I have my doubts that you will find many CFPs at banks. 

If you're up to possibly working with a CFP in St. Louis, I know a guy....

No

Well, I'm not farming posts or votes, but in St. Louis City, traditionally, landlord pays water, sewer and trash. Some will have tenants pay. Water and trash are a combined bill. If you have the tenant pay and they don't, their water gets turned off. If you have tenants pay sewer, MSD puts a lien against your property. So if you're looking to have tenants pay, you might consider having them pay water and trash but keep paying sewer yourself so you know it gets paid.

I only have properties in south city, but the big things that I have seen most inspectors look at are:

Smoke detectors-location and working

CO2 detectors-location and working

House numbers on the front and back

That there is hot water, the sinks do not leak and the toilet flushes

Handrails are where they are supposed to be and solid

Other than that, they might hit some random things but I think if the property looks nice and they get a good feeling about a property, they give you the benefit of the doubt. If the place looks rough, they are going to look closer.

I always bring my tool bag and a couple of extra smoke detectors and batteries because I don't know if the city actually changes their rules that often or if it's just inspectors that change what they think the rules are but it seems locations are always changing-inside the bedrooms, outside the bedrooms, by the kitchen, nowhere near the kitchen etc. Yesterday I had an inspection where I had to move two already approved of detector locations, one needed to move down 2 inches and another had to move to a different wall because it "looked" like it was more than 15 feet away in a 12 foot wide room. I like to have the extras with me as it's easier to do it right then than getting it reinspected. Yesterday was the first time I had an inspector offer me to send pictures instead of doing a physical reinspection. It was my first inspection in 2+ years so I don't know if that is a new thing or that specific inspector.

I will also say, plan on not actually having the inspection at the time you sign up for online. I think they all play the game where they call you and have you reschedule for the morning so they can have the afternoon off. 

You state your property is in North County but that the summons is from the City of St. Louis. Those are two VERY different different legal systems, regulations, and inspections. Plus within the County of St. Louis their are 80+ different municipalities that have their own regulations and inspectors. It is extremely important to know what regulations you are dealing with when you are investing in "St. Louis". 

Assuming your property is actually St. Louis City, occupancy inspections are required every time there is a change of tenancy. Considering there is a specific issue listed, I'm guessing an initial inspection occurred but that the CO detector that was flagged missing in the initial inspection was either not remedied or there was not a follow up inspection to get the certificate issued after it was remedied. 

Inspectors can be finnicky with location of smoke & CO detectors. The rules have changed many times over the years so I always bring extra with me so if they ever say anything during the initial inspection, I can place one exactly where they want it and not have to do a follow up inspection just for that. This seems like a failure of your PM. They should be taking care of this (actually it is dumb that it was allowed to get to the point of a court summons) and might be a red flag of a shoddy PM experience yet to come.

Originally posted by @Account Closed:

Usually, you can contact the agency that filed with the court and work with them. I would not get an attorney for something like what you have.

I never heard of getting a certificate for a change of your tenant. What is that all about?

You are not facing some sort of murder trial and should not need an attorney to argue your case. You probably violated some sort of city ordinance where you will be faced with a fine and told to make a correction. Most-often, the judge will reduce the penalty amount just like judges do for many other things e.g. a few months ago my son got a ticket for riding through a red light on his bicycle. When at the court, the bailiff told everyone that if they pleaded guilty the judge would give everyone a penalty of about 10 cents on the dollar. My son's fine was $50 and the judge did not fine my son one penny.

Try to contact the agency that filed with the court and try to work out the problem before you have to go to court and don't lose any sleep because this sounds like a small bump in the road and the cost for doing business. Then, get every book you can find for the real estate laws in your area and contact the local city halls for every area you own a property and ask them about their special ordinances and requirements.

Example. I owned a 24-unit apartment building in Gardena California and  I went to an attorney to evict a tenant. I had already owner the building for 10 years. The attorney asked me if I gave the tenant an Arbitration pamphlet provided by the city. I had never heard about this pamphlet nor did I know that I had to provide this pamphlet to my tenants every time I raised the rent.

So, the attorney tells me that since I raised this tenant's rent two years prior to wanting to evict this tenant that he wanted me to give all my tenants the money they paid since my last rent increase before he would file the eviction with the court. I can't remember how much I increased the rent, but lets guess it was $50 per month.

$50 x 24 tenants x 2 years is $50 x 24 x 24 = $28,800 + $800 for my attorney's fees to evict the tenant = $29,600 plus for some strange reason I can never grasp is when we evict a tenant we are not allowed to collect any more rent. So, suppose we evict a tenant because they are two months behind on their rent and their rent is $1800 per month (and that is super low in California) then the tenant is already into my pocket for $3600. Then, it takes about 8 weeks to have the court get the sheriff to lock-out a tenant. Then, the tenant has lived in the unit for two more month for free. So, add the $7200 to the total cost and now I was out $29,600 plus $72,00 = $36,800 because I never checked with the city hall to find out about their b.s. arbitration program.

The city of Gardena California's arbitration program states that when I raise rents the tenants have the right to ask for arbitration and I have to prove some b.s. crap like I am not making some super profits and the city can ask me about my expenses and profits. So far, since about 2002, 2 tenants filed for arbitration and it seems like the city blew them off and probably knew that any arbitration was a waste of their time and the city called my on the phone askes a few questions and I never heard back from the city.

Regardless! Pay attention to all the laws, get landlord books for your area and constantly read apartment owner magazines that will give you updates on all the b.s. laws in your state and laws in the areas the magazines cover. I love to sit at my desk and read all the apartment magazines from the front cover to the back.

I did not pay the $36,800 like me attorney wanted me to do. I think I went to another attorney, told him about the city's ordinance and he filed the case with the court and the tenant's attorney never brought up the city's arbitration program. I guess neither attorneys were educated about the arbitration, but if my tenant's attorney was educated about the arbitration I was in serious trouble!

It's best when dealing with legal issues, that if you don't absolutely know the answer, just do not reply.

It sounds to me of a classic case of the investor from California knowing more than the locals do. Think of this as a learning experience and a lucky break to learn without losing money. 

So you want to come in from out of town and buy the second most expensive multifamily in the zip code (originally priced the highest) that has been sitting on the market for more than 6 months? I don't think your plan of assuming all the local investors are uneducated rubes is going to work in your favor.

Snark aside, think about that a little bit. The locals know the market. A quad for less than $100k may sound great from your NYC perspective but why have the STL locals let it sit on the market for so long if it's a deal? Don't get me wrong, I love buying when out of state investors lose their *** in STL because they assume they are smarter than the locals, but I hate seeing the properties rot when they get in over their head and stop taking care of them. You shouldn't be looking at anything that is sitting on the market for months. It's not even worth running the numbers exercise.  Like @Max Householder said, you need to pick an area and watch it like a hawk. Whether it's STL or another out of state location, you want to see what properties are selling for that are off the market in a matter of days or a couple of weeks max, not months. Good luck.

I think there are many good areas around the park that make good investments. For such a great park, it seems like it has been overlooked by many.

Great job! I don't think I'd ever have the guts to put in $160k of work. What neighborhood was this in that you felt confident putting so much into it?