All Forum Posts by: Heidi Pliam

OK, so let me reframe.  I'm not trying to argue moral or philosophical high-ground, just strategy. When has it ever worked to tell someone to "just leave if you don't like it" when they're the ones holding all the cards?  The left owns both City Councils and Mayors offices here in the Twin Cities.  I obviously share most of your views on rent control as a failed policy. Thus, our mutual opportunity is to try and stop the current rent control initiatives by presenting meaningful alternatives, such as the ones suggested earlier in this thread.  And if you're own strategy is to "just leave" if rent control passes, then perhaps would you like to sell to me at a nice discount?  I've already got my backup strategies if this version of rent control get adopted.

  

@Bill B.  you're point is 100% valid that landlords cannot double rents unless the market demands that rate. But the natural cycles for real estate will always leave some tenants behind - always. There's a much longer explanation for this that I won't get into, but suffice it to say it's inevitable. So what does a compassionate society do when it happens? Hopefully not rent control.  Rather, as I laid out earlier, it needs to be a combination of solutions focused on balancing the reasonable interests of all sides.

Also while I do agree Bill that some people can vote with their feet - in real life that proves far more difficult than it sounds.   But maybe more importantly, cities do better to keep those low-wage workers living in their cities and working at the restaurants and pubs. But who is willing to ride 2, 3 or 4 hours in order to work 6 to 8 hours each day?  At some point the commuting formula just breaks down. So, it's not about catering to the whimsy of folks who just want to live in world class cities, it's about keeping the critical elements of a vibrant city all getting what they need so they continue to stick around and contribute. 

@Brian Garlington you make excellent points: First, if this initiative is shot down they will keep working on it.  That's precisely why it's so important to let voters know their worries are being seriously considered, but that there exist better alternatives than rent control.  

Second, your solution, namely, Section 8 or rental assistance, is one of the best ways to alleviate homelessness, and does so far better than rent control over time because it addresses the legit. needs of both sides.   

@Bill B.  

I agree rent control is a well-known bad idea - that's kind of my whole point. I also agree "Fast rising rates or high rents don’t necessarily high profits and certainly don’t mean gouging."  It's a matter of definitions. I've seen new owners come in and double rents with 30 days notice. That is my definition of "gouging." And if that's the only way a new owner is able to afford to buy a building, then they overpaid in my humble opinion. 

Further, this idea that if tenants don't like it they can just leave is a generalization I mostly support, but there are the slippage through the cracks that needs protecting.  In a tight market, where exactly are they supposed to go to?  This is were enhanced rental assistance may be helpful.  

@Evan Kraljic you have nailed it!  Even my friends on the extreme left are deeply concerned by what's on the ballot for St.Paul, for the exact reasons you site.   Here's some extra credit homework for anyone interested in reading more: 

If approved by voters, St. Paul’s rent control ordinance would be among the strictest in the world | MinnPost

twin city sidewalks: Diving Deep on Rent Control and the Housing Shortage (tcsidewalks.blogspot.com)

Personally, I rather like capitalism, and I don't appreciate the over-reach contained in the St.Paul initiative.  However, we have to do something!  Homelessness and increasing rents threaten everyone's quality of life.  (Love the late Senator Paul Wellstone's quote that "we all do better when we all do better.) 

We have to give both sides what they need to succeed: Tenants need decent affordable homes and developers/landlords need to make a profit for their risk and labor.  Problems continue so long as sides of a debate are blind to the legitimate needs of the other side.  So, looking for common-ground, I'd say the solutions lie in combining (1) super modest rent stabilization laws that won't handcuff and bankrupt developers and landlords but instead focus on anti-gouging; (2) enhancing rent-assistance programs; and (3) streamlining development, with crackdowns on NIMBYism.    

So I say "vote no" to ballots in St.Paul and Mpls (agreeing with Evan's distrust of Mpls city council), then go back to the drawing board with a wider coalition willing to roll up their sleeves and work on this urgent problem!

Looking at some A-Class deals in St.Louis and want your thoughts on cap rates and anything else we should know about the market there before submitting an offer there.  Who thinks it's a good town for investment, who doesn't, and why?

Congratulations @Jeremy Mangen!

First let me start with what caught my attention. Specifically, it was that you're not falling prey to the false idea that because you are investing with a trusted friend that somehow the legal approach is unnecessary.  Bravo!  For everyone questioning this notion I only wish I could break attorney-client confidentiality (which I cannot), because I could tell you one heart-wrenching story after another where the lifelong friendship (or family relationship) came to a halt - and equally painful, their tales of defamation and gossip within these lifelong networks of support.  I've been through it myself; one of the most difficult challenges I've ever faced!  

Now, more to your question about the best way to get your legal house in order.  

What I've observed with new investors is they tend to either err on the side of overdoing it  with complex trust/entity structures.  Or, they underdo it, looking for the cheapest, quickest solution.   I suggest the happy medium is to at least get the basic docs from an attorney (and have the CPA review them) or from a CPA (and have the attorney review them).  Both CPA/Attorney are foundations to a successful business!

As to protecting that valued relationship with your friend, know that technologies used in downloadable forms just are not sophisticated enough (yet) to get you to think through the kinds of critical  "what-if" scenarios that typically don't get asked without the prodding of an attorney.  

And, by the way, I am one such attorney, and I would be delighted to help you out with your deal structuring!  I'm sure @Brad Schaeppi and @John Woodrich would also provide great assistance, as @Basit Siddiqi has suggested.  In fact I've spoke to @John Woodrich myself a couple times and found him very knowledgeable and easy to work with.  (I haven't yet had the pleasure of working with Brad.)  

Bottom line:  It's worth the money to hire pros. Shop around and get comfortable with your team of advisors.  

Happy Investing!

Heidi

@John Woodrich is your guy!  He's not a tax attorney, but very knowledgeable and a frequent contributor to the BP community.

Never assume it's a bad deal if nobody else grabbed it, but always beware it may be a bad deal since nobody else grabbed it.  In other words, assume nothing. Always do your own due diligence.  My best deal was one that others passed on. Who knows why.   As for rents, look at rentometer.com for that area.  Also look at craigslist.com.  Those two should give you a sense of demand and pricing.

Wow Bryant, cool new business, and sorry you're having to manage this mess at a critical juncture.   I like @Ryan Schroeder solution - contact the city. It seems likely a payment would have been made, but not impossible one was not.   You have rights to pull data from the city under FOIA, which they know, so they generally comply without lawyer threats.   

Also get in touch with the prior businesses and property owners to see if they can produce payment records (they probably hated paying, so would be happy to help you avoid a double-billing).