All Forum Posts by: David Moore

Just wanted to post that I hired a property manager for my four plex.  I've been quite critical of Property Management companies, stating they are a waste of cash.  We had experienced high cost on turnovers in both PM companies we had.  But over time, I started to notice things about the PM companies that were ingenious.  First was the PM company I had in Albert Lea only switched out deadbolts on turnover.  Small matter, sure, but really smart.  Why put the turning knob through the added wear and tear?  I also missed our PM in the Twin Cities as my leases started to get dated, and I missed having the team readily available.  With a good PM with references, I have a property manager, a leasing company, an accountant, a maintenance manager, a lawyer, and the best thing is, they are a team and coordinate themselves.  

I'm enjoying life more, and budgeting for expenses from my PM.  Setting aside a larger monthly amount that may or may not be spent, but planning for it.  I think it is going to go better this time around.  And now I can finally add another four plex, Lord willing.

@Chris Gawlik

There is a fundamental problem with your idea, and I've personally experienced it.  Your calculation says you will have around $200K, and you will increase monthly cash flow around $7K.  In my experience, life just gets in the way, and unsupported optimism can result in unfulfilled dreams.  Putting your family in such a cramped space sounds great because you have never done it.  Before you commit to selling your house, go live in the trailer for a month or two, and see if you can stand it.  The worst time to look for housing is when you are in a hurry to get it.  Find out what storage problems, relationship problems, and the fact that sickness can run through a small place faster than when in a house.  Live it, before you commit to it, not only for your sake, but the sake of your whole family.

Also, big assumption on your part of the plan.  How do you know that there will be a recession in 1 or 2 years?  How do you know how long it will last?  How do you know a recession will locally seriously affect your real estate market?  That's a lot of ifs.  

Someone here mentioned Dave Ramsey.  His plan is better.  And you keep your house.  

Ok, gang.  I've got a problem that I'm going to try to solve in my lease.  But I want your honest feedback.  I require my tenants to pay using cozy.  Anyone who has a checking account can pay for free.  Some tenants don't have one, didn't like paying the small cozy fee, but now they get the system and actually like it.  I have one tenant who is on 80% assistance.   This tenant, even though the lease says to pay via cozy, sends me a money order to our P O Box each month.  This has been our tenant that pushes back on everything.

There is a cost to  going to the PO, making sure I get there by the 5th, and then manually depositing it.  We are raising rents now, and having tenants sign new leases.  I'm thinking of adding a 3% fee if a tenant pays by mail.  There is only one tenant who is going to give me grief about it, and perhaps, this will finally deter her to use cozy.  I don't want the 3% fee.  I want tenants paying on cozy.  I'm just looking for a lever.

Would you consider such a measure, or would you come at it from a different angle.  My risk is that other tenants learn this tenant is ignoring lease and mailing her payments to our P O Box.  Tenants are only supposed to mail checks in the event that there is an electronic issue with the pay site.  

For those who have never had a strident tenant, I ask that you put yourself in the place of someone who has.  Imagine some difficult person who never followed the rules, when framing your answer.  Thanks.  

Anyone notice the Minneapolis City Council passed Renter-First Housing Policy today?  In the words of Mayor Frey, who actually is a  good mayor, IMO, "Protecting Tenants rights is key to successfully addressing our affordable housing crisis.  Tenants often find themselves at an unfair disadvantage when they go up against powerful, exploitative landlords".

I bet a lot of apartments suddenly hit the market in Minneapolis.  How far behind will rent controls be?

@Carlos Soto

I have not found a deal that fits my criteria in nearly three years.  I have put in offers in my market, got to inspection on one deal, but it just didn't work out.  I have followed Kiyosaki's advice, which is to find value investments in other areas.  I've done pretty well in one segment of the stock market.  I cannot share those stocks, or the research I took to find them.  Just want to encourage you that real estate is not the only game in town.  

There is one more thing.  A process server (my son does this while attending college), can obtain from the Post Office the physical address of the company or person for whom the summons is being served upon.  There is a form at the Post Office that can be filled out to obtain this information.

This is why I go right to the law itself.  Many of these accepted practices are legal inferences, but not actual law.  

Again, guys, you are reading what isn't in the law.  What your reading is an interpretation of law, and one that goes far awry of it.  Do you know how many businesses in Minnesota use a P O Box as the mailing address?  The IRS uses a PO Box for tax payments.  The handbooks you are sighting, and even the attorney general site only infer via an interpretation.  My point is, you never give a tenant your personal address for correspondence.

Another fatal flaw in the interpretation of that is a company with an office but no business hours.  Again, there is a physical address with no P O Box, but no one is there to sign for it.  See the issue?  See how enforcing a made up reference can be troublesome in case law?  

I am not an attorney and I'm not offering any legal advice.  Just stating that accepted business practices, even in these guides, are often written from a slanted perspective, not found in actual law.  Just like the myth that is often perpetrated in Minnesota, and in some of these guides, that a landlord cannot use any portion of a damage deposit to cover delinquent rent.  The opposite is true...just gotta read the state law.

@Joseph Hammel @Tim Swierczek

I've seen nothing in Minnesota State law that requires a landlord to list a physical address for tenants to reach them.  I've seen the policy stated, or implied on the Attorney General website, but I've seen no reference to the law requiring it.  This is not the first time I've seen an implied rule that everyone believes, but is not in state law.  Personally, I think the only way to do this, if it is a requirement, is to go with a mailbox at the UPS store, which is really a P O Box, but is a place that will sign for mailings, and a place where the address is an actual street.  

As a business practice, I have zero intention of letting my tenants know my personal address.  

@Bobby Esposito

I can't tell you what to do, only what I did.  I coughed up $800.00 for a real estate lawyer to create a lease, and I'm glad I did.  The thing is rock solid, and includes up to date info that boiler plate leases may not.  I had a management company for a period of time for one property, and parts of my lawyer created lease are better than theirs.  

I've used that lease now on 12 tenants....cost per use is little using a lawyer.

@Michael Zuber

I read through a lot of these posts, not all, and I have a couple things to share.  First,  your statement about Millennial's making life choices to keep expenses low is not supported by data.  The average Millenial age 25-34 has $42,000 in debt, and much of that is not student debt.

Second, I'm surprised no one has defined what being financially free is.  Some have said it means different things to different people...post modernism is persistent, but not logical.  Financial Freedom involves what Dave Ramsey says, the ability to live like no one else.  The Bible says that the debtor is servant to the master.  How many people are chained to their jobs, not free to truly take a stand on an issue, because getting fired would ruin them?  The average millenial has $42K in debt, the average american has $38K in debt.

Free from debt, and free from the worry about money is being financially free.  But being rich is not necessarily financially free.  I don't see how that is possible outside a relationship with Christ, personally, because some on this board, or in real estate, will endlessly acquire more and more properties, at the expense of their marriages, families, and their own health.  Scrooge was considered financially free, but he loved his money so much, the accumulation of wealth made him not financially free.  

Look at how many lottery winners lose all their money, and how many sports figures end up broke, after earning millions.  

So, the acquisition of debt funded properties, even millions in money in the bank, is not financial freedom.  Read 'The Millionaire next door' for more proof of very rich people who were slaves to their own wealth.  Financial freedom is being free from debt and free from worry about money.