All Forum Posts by: Robert Taylor

Hi Azita,

First off, I'm VERY sorry to hear about this and can imagine where your stress level is at right now and while this is no cure all answer, please take a deep breath and remember you will get through this fine and that EVERYONE hits bumps in the road, including major bumps at times and you'll be fine in the end, but I understand it probably won't be the most fun few weeks coming up. You'll be fine soon enough though!

OK, first off I'm wondering if you're confusing in the heat of the moment the effect this "lien" would carry as a hit to your credit score, report, etc because I'm honestly not sure on this, but I DON'T think this will be like having a court judgement hit your credit report, which IS a bad thing to have on there. MKE city and many others here will take things like an unpaid water bill and tack it on to your prop tax bill and although sometimes those bills can get quite high, (like when clueless, spaced out tenant hears and sees the damn toilet running for months, never says a word and you get a massive water/sewer bill! 

I would call that inspector and find out ASAP (and here the MKE inspectors usually have office hours from 7 or 730 till 830 or 9am CST, so not too long and he/she will be in their office. Ask if this is like a court judgement, or something less and hopefully they'll know.

Then my next question, WHEN DID THIS FIRE HAPPEN??? If you have a prop mgt company running things, I'm trying to figure out if there was some delay in notifying you since the inspector called and just said "Hey we're knocking this place down" which almost sounds to me like "well since you're not going to do a thing about it, we're knocking it down!" I'm NOT an attorney, but I'd wonder if you'd have at least some recourse there if the mgt co let it sit a week or even a few days before letting you know, since I'd think NORMALLY they'd say something more like "OK, this place must go so if you want to handle it and probably save some good money on that, you MUST get it done in 3, 5,7 or however many days or else we'll just do it. 

Also, HOW DID THIS HAPPEN?? Now, I know darn well you can't expect mgt co to ne totally on top of EVERYTHING going on, but I'd bet my last buck some dumb#$% had 8 things plugged into and pulling 14 amps thru a 99 cent extension cord, clueless as to it being ANY kind of issue!!

Unfortunately, (or thankfully for me) I've never had this happen and don't know who to call, but wondering if the mgt co dropped the ball here??

Either way, best of luck and keep trying to keep in mind that you WILL get through this!!!

Also, I should add that the big banks and many medium and smaller sized banks deal through 3rd party asset managers who handle most or all of these details and you'll rarely if ever deal anymore actually working for the banks!

City of Milwaukee lists code violations, complaints, permits take out, etc on the city website, but as far as I know you would have to look up each individual address then do a few clicks and get to that screen. You can do an "address range search" like for example 100 5000 N 1st St (or however exactly their lingo goes) and then you'll have a REAAAALLLLYYYYY LLLLOOOONNNNGGG list of every single property, commercial, residential, industrial, vacant land, etc from 100 N 1st St to 5000 N 1st St, but that just saves you the step of typing in each and every address, you'll still have to click through a few screens to get to the permits and violations page.

Sounds to me like a LOT of time that could be better spent elsewhere, heck I'd say you'd be better off taking a 2nd job with that time and using the earnings for future investment!

I've never done direct mailing, but know a few who have and who've had some success at it (and as others have mentioned, even a minute % response rate is good, you only need to find one good or great deal to make a mailer worthwhile) 

Have you checked into buying lists? Again, I've no experience as far as this relates to RE investing, but I know they sure sell list of names, addresses, phone #'s and of course now emails for all sorts of legitimate reasons and targeted at a myriad of various groups, so I'd be shocked if they don't sell them related to real estate related matters.

Another possibility is going to the county courthouse downtown and going to the computer room that the register of deeds has set up, where you can have free access to a system called Laredo which is normally a somewhat pricey (depending on what kind of #s you're talking about) subscription service with all sorts of info on deeds, liens (both public and private) etc and the people working there are usually quite helpful when a new person comes in with some questions.

I'd say to contact the inspector(s) you've got good relationships with and not knowing the whole situation this is one you'd have to decide exactly how to handle it, but maybe its setting up a meeting with one of the supervisors or just talking on the phone, but with the goal of getting the point across that you want to spread the word throughout their office (and admittedly, its a large city with a lot of inspectors, we're not just talking about like 5 people here) but to get the point across that you are in this for the long term, you will be keeping your properties in great shape, etc because like I said before, from the DNS point of view and especially being from out of town (and double that for being from Chicago, which for whatever reason, SOME Milwaukee people think of as being something bad) for all they know, you could be the latest out of town slumlord and you need to smash that perception into a million pieces and that may well be something you'll have to do many times over, but its not that hard to do. I'd think though that the trespass signs send exactly the opposite message and you really want to win the battle in their minds as to why exactly you're in town. If you convince them that you're here for good reasons, you'll have a MUCH easier time dealing with them.

Another ditto to @Ramon Jenkins picking a fight with the DNS, which is what I'd assume they'll think with the no trespass, signs, contesting stuff, etc is basically like committing "RE investor suicide', you're FAR better off getting a good rep with them as someone who when they buy a place, the DNS automatically knows it is good news for the block, neighborhood and city. They will then give you extra leeway in getting repairs done, etc. 

I don't know a thing about how many properties you're talking about here, total # i=in your name, how many of that # have violations or orders on them, etc but I've certainly  heard of it happening before where a totally well-meaning investor takes on too much at once and if that might be the case, then I'd HIGHLY suggest making nice with the inspectors, trying to work out a time frame to fix up in, etc which might even mean selling some of them, I don't know your particular situation. 

Keep in mind the context here from the DNS end of things, they have no idea who you are, you're from out of town and they've seen so many slumlords over the years and I'm sure many of them lied and said they were going to be the best thing for the block and the city and they were lying through their teeth about that to the DNS, so they have a right to be suspicious of anyone new who comes along. 

I'd ditch those signs ASAP to start!

I could just say "ditto" to what Dawn just said and I don't want to sound like Mr Drama person to say you're putting yourself into a death spiral but I guess this is what I've said many times, if you get on their bad side, well they can make life hell for you. Code fines become civil judgements and judgements follow you and ruin your credit report and being "up to code" is essentially a brand new house, so when you buy old housing stock, you run that risk. I've heard numerous stories on both sides, the ones who fight DNS and the ones who work with them and have yet to hear of anyone beating them one way or another, its best to be their friend.

First off, I have to agree wholeheartedly with @Wesley C. and even though I am NO "DOOMSDAY ECONOMIST" and poke fun at times at the literally THOUSANDS of youtube videos, websites, etc that have been predicting a US and/or world economic doomsday for years, even if its not a complete economic collapse with anarchy in the streets and "every man for himself" event with modern civilization ending suddenly, we still do have some scary numbers in a LOT of categories of our economy that scare me to various extents and another "Lehman event" is not at all a far off possibility. (Lehman Brothers was the first major domino to fall in the 08/09 crash for those who don't know) So, I don't want to be holding ANY real estate that isn't intended as a buy and hold holding.

Also, as another very experienced broker pointed out to me once, yes here in WI and any cold winter area we have a noticeable dip in sales volume during the winter months and yes, having an open house on Christmas Eve or Day isn't the smartest use of your time, BUT by no means do sales in our local mls drop 90% or close to that during winter AND as this broker pointed out, there's also a corresponding DROP IN INVENTORY during those months and if you're transferred into town or have some other reason to move soon while its cold, you're still just as motivated to buy in January as you would be in June. 

So, I no longer think winter or the holiday season hitting as being any sort of a drop dead date for selling a home here.

I think there's a HUGE benefit to having that option with a 30 year note vs a 15 year note as several people have already mentioned here, the bank normally doesn't mind one bit if you want to send an extra $100, $500, $5000 or whatever per month along with your normal payment due on that 30 year note, so you can effectively pay it off in 15 years or whatever term you choose and what often makes me shudder when I read some investors or would be investors "plans" is especially in an area like Milwaukee (or any city/metro with a lot of older housing stock) when they're talking about the places with what look to be excellent cash flow #s with an exceptionally low buy in price when compared to real estate in other areas is those properties are almost always going to be OLD housing stock and the part that makes me shudder is how cavalier some of the attitudes are towards unexpected major expenses that may come up over a period of 15 years. 

Now, if you have another source of income and I mean a fairly large source, or are sitting on a large liquid reserve, then an unexpected say, $15k or $20k repair(s) cost might not be much of a hardship, but if you're relying solely on rent income and/or maybe just an average income if you are still working a job, that can fold a big house of cards quickly when you run into an unexpected major repair or multiple repairs. 

When you own and rent out multiple old stock residential properties, you almost have to expect that at some point you're going to get hit hard with maybe multiple major repairs on multiple properties and if it includes some emergency type repairs, like furnaces or boilers failing when we had a winter like two years ago where a few days the high temp was minus 15, crazy stuff starts to happen quickly. 

I had a home I was rehabbing with a less than 10 year old Lennox furnace that decided to quit on one of those minus 15 days and thank God I had a carpenter working there that day who's just an all around smart guy and he knew I had some propane fired heaters sitting in a garage at another house, called me and I got them over there before pipes began to freeze and burst. We'd already partially completed insulating that place too, yet within a matter of hours it was below 32 degrees inside of the house and most of these old homes have NO insulation!

Now, if you've got tenants in there, they're not going to be too happy about it either and will almost certainly call the building inspector if they don't see someone on top of that problem ASAP, so its not the time to start shopping around for a smart fix that will save big money, you may end up simply having to pay for a new furnace or pay the highway robbery type price that the one HVAC guy in town who's even got time to show up charges to fix it.

Times like that are when, if operating on a tight budget, I'd say that extra flexibility of the 30 year note is worth its weight in gold, or else your properties will begin popping up at the sheriff's auction as many already have!

Also, check out the city of MKE website, which will also have links to state of WI codes, as the codes for 1 and 2 unit dwellings are different from 3+ units and DEFINITELY get hooked up with a realtor who REALLY KNOWS multi unit properties. I'm not one of them, but my understanding has been that once you go over 4 units, you cross a few more lines and basically whenever you cross any of these "lines" it mainly means more expense. You especially DO NOT want to run into some oddball issue like where you suddenly find out you need to install fire sprinklers, which can range from being simply a real big expense to a MASSIVE expense, if you have to do things like have a larger water main run to the building, which often can be tens of thousands of dollars to have done. 

There are many factors that come into play with a multi unit building, especially crossing the 2 unit number and the 4 unit number, the city will expect more out of the owner and the people hired to do the work and having someone experienced in handling the sale and ownership/management of a 6 unit building will prove to be worth its weight in gold, there may also be various help available from the city (and other levels of govt too) that aren't widely known, but that someone well versed in this market will be of much help with.

Good luck to you on this and thank you very much for your service to our country too!

@Derreck Wells is right on taking a lead class, I had been signed up for one about a year ago and had to cancel after something else popped up, but have been meaning to do another one. That way you'll not only know how to "safely" remove the lead affected stuff, but you should also have some good insight into the myriad of often insane laws we now have from many levels of gov't. It was a one day class, an 8 to 5 type deal for around $300 I believe.

One thing that really gets me is how ALL of these various new rules and regulations, brought in with the best of intentions by "do gooder" lawmakers or sometimes un-elected people in the EPA, etc hit the areas hardest that need help by far the most. For lack of a better term, they screw themselves and our area with every new "protection".

Here in Milwaukee, we have an entire area of the city with very low property values and that's the area where its usually (or almost always) not worth fixing up many properties due to all of these various costs that are now involved. Am I saying "let them eat lead paint?" HELL NO! Yet, they take what could, with a modicum of common sense, be done for $1000 and make it a $5000 job!

I don't bother with the low priced stuff anymore and I look at these projects and think how on the two I have where one will sell around $220k, the other around $260k (although prices keep going up-woo hoo!) an unexpected $5000 cost isn't fun, but its not the end of the world. On my big current project, so nice I had to move in and would like to stay if I can swing a plan to cover the $30k/yr property tax alone and if I have to sell, should fetch around $1.3 or $1.4M, an unexpected 5 grand is just a small part of the contingency budget. Yet, when you're talking about a $15k property, or even $40k, 5 grand unplanned is the end of the world, or seems like it at the time. All that is often because as was already mentioned, some elected official (of which we have WIDELY varying ones here) got some idea themselves or from whoever in the community or found out what other cities had done (stupidly) and they copy it and guess what, now we have a whole swath of the city where we have a massive number of abandoned homes that make no financial sense but to bulldoze!