Storytime: Section 8 Horror Story with Lessons to be Learned!

I found a post in our local Facebook group that I found to be very interesting and full of lessons.

Lesson #1

When an owner receives a move packet and the owner is not familiar with the local housing commissions, it’s a good idea to call the housing commission and ask if the email you were given is their email address.

Lesson #2

Tenants do not port at the beginning of a lease term. Porting means move to another state or county. The tenant has to do at least one year once they are renting a house before Section 8 will allow them to move.

Lesson #3

Caseworkers do not meet landlords at the house. At least not in Detroit ever. Caseworkers do not communicate unless it’s in a formal manner. It seems as though their communication is all cut and paste. They are not personal. They would never say that the keys are on the counter. They may tell you the tenant is porting or the contract is canceled. But they will not add to it that the keys are on the counter.

Lesson #4

A caseworker will never offer legal advice. In this scenario the supposed caseworker advised the owner to dispose of any personal property. Judges and lawyers all have different definitions of what constitutes a vacated property. There seems to be a lot of gray area on this subject. When in doubt, ask your lawyer.

Lesson #5

Never enter your property assuming it’s vacant. Look around before entering to see if it seems someone lives there. Even then, announce yourself as you’re opening the door, “LANDLORD!” Landlord, as in you’re not there with guns for a drug deal or as police.

Lesson #6

If someone has moved into your house without your permission, that is considered trespassing. Even though there is a new squatter law that the police are to remove squatters, for some reason the police were all trained to say, “This is a civil matter.” They will insist you file an eviction, which will take MONTHS for the courts to execute.

Lesson #7

Usually if someone has moved into your house, they did so unwittingly thinking they were renting it from the real landlord. They probably have no money anymore to move. If you don’t want to spend MONTHS evicting them and paying legal fees, offer them enough cash to move. That amount is negotiable. Some people say first month’s rent and security deposit will do it. Other people offer $500 and that’s it.

Lesson #8

Don’t go into renting to Section 8 tenants assuming you know everything. Have the humility to learn.

Pat's Common Sense Shower Surround Solution Landlords will LOVE!

Here’s a summary of the YouTube video by Monique Burns titled "Shower Wall Hack: Landlords Will Love It!" in 10 bullet points:

1. **Introduction**: Monique Burns shares her excitement about a bathroom renovation, featuring her husband Pat explaining a cost-effective shower surround solution.

2. **Tenant Reaction**: A tenant is thrilled with the bathroom transformation, moving from ugly tiles to a nice new look.

3. **Background**: Monique and her husband buy and renovate distressed properties in Detroit, selling them to investors nationally and internationally.

4. **Call to Action**: Monique invites viewers interested in buying homes or her online course to schedule calls with her.

5. **Bathroom Renovation Challenges**: Pat discusses the limitations of the bathroom layout and budget, leading to creative solutions instead of a full renovation.

6. **DIY Approach**: They opted to paint existing tiles and use solid vinyl plastic sheets as an affordable shower surround alternative.

7. **Installation Process**: Pat explains how they adhered the vinyl panels to the walls with full spread glue and capped them with trim.

8. **Cost-Effectiveness**: The vinyl panels are inexpensive (about $35 each), making them a practical choice for budget renovations.

9. **Additional Improvements**: Besides the shower surround, they reglazed the tub, replaced fixtures, and installed luxury vinyl plank flooring.

10. **Future Plans**: Pat mentions that while this solution is effective, a full gut renovation is needed for the bathroom in the future due to its poor layout.

The New Taboo: "Sorry, I don't accept Section 8."

Source of Income Discrimination

Does your state or your municipality have a Source of Income discrimination law? You’d better find out! The governor of the state of Michigan is about to sign the bill here. I’me going to break it down in this video. What does it mean? What if you violate it? What’s really going to happen?

What We Cannot Do

Link to New Ruling

1. Denying or terminating a tenancy.

2. Denying them a rental unit or making it unavailable to them when they would otherwise (i.e., if not for their source of income) be eligible to rent it.

3. Attempting to discourage the rental or lease of a rental unit to them.

4. Falsely representing to them that a rental unit is not available for inspection, rental, or lease; knowingly failing to bring a rental listing to their attention; or refusing to allow them to inspect a rental unit.

5. Making a distinction or restriction against them in the price, terms, fees, or privileges related to the rental, lease, or occupancy of a rental unit—including, House Fiscal Agency Page 1 of 6 separately and specifically, doing so on the basis of their use of emergency rental assistance.

6. Making a distinction or restriction against them in the provision of facilities or services related to the rental, lease, or occupancy of a rental unit.

7. If the landlord requires tenants to have a certain threshold level of income, excluding any income in the form of a rent voucher or subsidy (but not emergency rental assistance) in calculating whether those criteria are met.

What is Source of Income

Housing assistance, housing choice vouchers provided under 42 USC 1437f, public assistance, veterans’ benefits, Social Security, supplemental security income or other retirement programs, and other programs administered by any federal, state, local, or nonprofit entity.

What is NOT Source of Income

1. Income the prospective tenant cannot prove. I woud think this includes self-employed people and maybe people doing illegal business.

2. Housing assistance that is not approved by the appropriate agency within 30 days after the landlord provides all information required as a condition of the agency’s approval, including evidence that all repairs required before occupancy have been completed.

This last one would mean that once I have turned in my Section 8 application, the housing commission has to get through the inspection and I have to pass it within 30 days.

What happens if we violate this?

Damages would mean actual damages for injury or loss caused by each violation, or up to three times the monthly rent for the rental unit or units at issue, whichever is less, together with court costs and reasonable attorney fees.

What’s Really Going to Happen?

I don’t believe in discriminating against people with sources of income from the government. I think a lot of landlords are going to look at this and say okay to renting to Section 8 but the tenant has to come up with first month’s rent upon move in. That’s what the landlord does with everyone else anyway. But would that be discriminating against source of income? Or the landlord could refuse to sign a HAP contract. There’s some wacky things in there we have to sign if we choose to rent to someone on Section 8. For instance, if my house is in abatement because I failed two inspections and the damages were all tenant caused damages and Section 8 stops paying me, can I charge the tenant the missing Section 8 rent? No! Credit score. Home visit.

Section 8 Reform: Small Area Fair Market Rents. Good or Bad?

What is a SAFMR?

This is a quote from one of HUD’s memos explaining the breakdown:

A family with a voucher pays about 30 percent of its income for rent and utilities, and the voucher covers the remainder up to a payment standard set by the state or local housing agency.  The payment standard generally must be within 10 percent of the FMR, although agencies may set higher or lower standards if they meet certain criteria and get HUD approval.[1]  Families may rent reasonably priced units above the payment standard, but they must pay the extra rent themselves, on top of the 30 percent of their income they would otherwise pay.[2]

Why Landlords Deserve Premium Rents from Section 8 Tenants

I buy distressed properties in Detroit, renovate them, and rent them to Section 8 voucher holders for ABOVE fair market rent. I feel I should be paid extra because I am asked to do more than a regular landlord:

• Fill out a lot of paperwork once I find the tenant.

• Keep my house vacant for 1-3 months longer than it would take to place a cash paying tenant

• Endure yearly inspections that usually require me to front the expenses of tenant caused damages

• Endure unfair inspections.

HUD is saying I’m not being fair

HUD does not want me to charge higher rent than fair market rent. They feel they are being ripped off by me.

HUD also feels that the amount of rent HUD is willing to pay to landlords is not enough for tenants to move to neighborhoods with better schools and better opportunities to leave the circle of poverty. So HUD is going to offer to pay extra rent to get tenants the ability to move out of Detroit and into the suburbs. At the same time, HUD is greatly reducing the amount of rent it will pay to Detroit landlords.

Detroit is on the chopping block

Detroit has already rolled out it’s new SAFMRs. The housing commissions are welcome to implement it now (which it seems they are doing), but they have to officially implement it in January of 2025. HUD is determing rent based on zip codes. I really don’t like this because a zip code does not define the quality of a neighborhood. Detroit’s quality is very much block by block. There are excellent desirable blocks in every zip code as there are scary areas no one should be living in in every zip code in Detroit.

Note: We are all set with our tenants already paying the top amount (our rents won’t be reduced), but any new tenants we will have to accept sometimes $200 less per month depending on the zip code.

Good Luck Moving out of Detroit!

My personal observation is that when tenants move out of Detroit, they are met with a landlord or property manager who is convinced Section 8 tenants destroy houses. Or the landlord or property manager does not have enough experience with Section 8 to know that we sadly sometimes have to take tenants to court to incentivize their housing commission to process their income adjustments or rental increases. A suburb landlord will see a court action and not know to ask the prior landlord if it was because the tenant was bad or it was a tool to get a slow housing commission to do their job.

Suburb landlords and property managers are usually also strict about credit scores. I’m used to Section 8 tenants who have been in “survival mode” and have not had the privilege of even thinking about improving their credit scores. I do not look at credit scores. I look to see how they live so I know if that particular person is one who destroys houses.

Also if a tenant moves into the suburbs where rents are higher, that means the security deposit is also higher. It’s hard to come up with that much cash to move.

What is the new rent?

Here is a link to the new zip code rental amounts or SAFMRs: LINK. Take each zip code and minus from it the utility allowance. I am using the utility allowance chart fo Wayne County detached single family homes. Here is a link to it under Current MSHDA PHA Utility Allowances : LINK If you want to see the memo that inspired the blog and video, here it is: LINK.

Below are amounts for any of my houses that I would use from the utility chart. I added together the following columns: Heating natural gas, cooking natural gas, hot water natural gas, other electric, water, sewer, natural gas service charge, electric service charge, range, refrigerator. The trash comes out of our taxes so I didn’t have to include that. Most of our houses do not have air conditioning so I didn’t include that number. What I included is the utilities the tenant has to pay; gas, electric, water, sewer. The tenant also has to provide their own refrigerators and stoves in my properties (and most Detroit properties).

Utility Allowances: A two-bedroom is $259. A three bedroom is $349. A four bedroom is $438.

48205 is a place where we invest a lot so I will use that zip code for this example. A two-bedroom in 48205 is $1,250 less $259 = $991. A three-bedroom is $1,530 less $349 = $1,181. A four-bedroom is $1,660 less $438 = $1,222. But each housing commission has a 20% discretion in their policy to pay us more. We just know they won’t pay us LESS than these amounts.

If I add 20% to each rental amount, I could get for a two-bedroom $1,189, a three bedroom I could get $1,416, a four-bedroom I could get $1,466. Before the SAFMRs, I was getting more! A couple hundred more.

Beware of Relying on that Supposed 20% Discretion

There are a multitude of factors that affect the amount of rent we really can get. Each housing commission is run differently. Each housing commission has its own separate funding besides from HUD, from what I understand. And each housing commission has its own policies.

I was able to ask one of the housing commission directors about these new SAFMRs. He is trying to get the housing commissions to work together on developing their policies so the housing commissions rents they will allow don’t vary widely. We don’t know yet how much lower our rents are going to be. But it sure seems they will be because we’re already seeing lower than usual rents being accepted by the housing commissions.

My Guess How This Will Play Out

If we do not get a premium for renting to Section 8 tenants, it will be far less desirable to rent to them.

Just because HUD’s goal is to get tenants to move out of the city, it doesn’t mean they are going to do that or that tenants even want to do that. Section 8 tenants are usually single mothers who rely on their families to help them. My best tenants usually rent because my property is near their relatives.

And there is the whole prejudice barrier that suburb landlords have against Section 8 tenants. I’m involved in my local REIA group that meets outside of Detroit in Oakland County. I can tell my peers until I’m blue in the face that their prejudice is on false notions, but they do not believe me. Even with the new law being passed in Michigan where we landlords cannot discriminate against source of income, all the landlords are good and ready how they will bypass that. They will use credit scores and income. They will say they need the full rent on move-in day. The State can’t make us wait up to three months before we see the first rent in our bank account. So why would we rent to Section 8 tenants if we don’t want to?

My houses are all in Detroit. I prefer Section 8 but it comes with a cost to me. I have to wait an extra month of not collecting rent while I get through usually two inspections. It’s really hard to pass their inspections on the first try. It’s rare for even the best landlord. There’s one-three month’s lost rent on a vacant house. Then I have to pay my taxes, insurance, and mortgage out of my pocket for the first one to three months until rent hits my account. Then every year I have to pass another inspection and fix things typically a tenant damaged that I wouldn’t normally fix until after that tenant moved out. Why fix something for them to damage it again? And when a tenant puts in their notice to vacate, I know what day Section 8 will stop making payments to me. But that doesn’t mean the tenant will move. I’m often stuck with a tenant in my house who is not paying a dime of rent because all her funds are going to fund their move. The tenant doesn’t make enough money for me to collect that missing rent through the courts. That has been a significant price I’ve paid.

I’m waiting to see how much “discretion” or rent I’ll actually be allowed to charge before I decide if I’m renting to Section 8 tenants or not. If there isn’t a premium, I doubt I will favor them over cash tenants anymore.

Although I do like those monthly reliable Sectoin 8 rental deposits. I do like that I’m only chasing rents on the tenant’s portion which is usually around 25% of the full rental amount. And I do like that Section 8 tenants tend to want to abide by their lease so they don’t lose their voucher. But if I’m not also paid a premium for those former things, it’s hard to say.

If other landlords feel as I do, it could become really hard for Section 8 tenants to find houses. Tenants are only allowed a limited time to find a place to live. After that, the tenant loses their voucher and the tenant is faced with homelessness. I thought HUD was there to prevent homelessness.

I’m NOT a fan of basing rents on zip codes. It’s too bad the “discretion” isn’t based on who the good landlords are and matching them up to the good tenants on the good blocks. But can you imagine the Fair Housing fiasco that would cause?

I’m eager to see how this plays out. Meanwhile, I’m still favoring Section 8 tenants because the rents are still at a premium, just not as much as it was.

The Truth About Investing in Detroit: 3 Misconceptions Explained

I talk to a lot of potential Detroit investors and these are the three common myths we discuss. They're okay with the first one and the second one, but the third one is the hardest one to get through to them. Investors are SMART people who have proudly done their research. They just don't know what it is that they don't know. I don't have nine hours on the phone to educate them so I made a course. I made the course that could have saved ME countless thousands if only I had it in the beginning.

Watching the Know-It-All Investors is like watching a horror movie. "I told you not to go in that room!" But they go right toward danger.

CLARIFICATION: At the end of the video I told about 3 investors.

Investor #1 bought 12 doors from us in 2017-2018. He also has rental investments all over the country. When we stopped managing his houses, he lost money because he does NOT have the "master's degree" in managing his property manager. Nor did he have the time to follow up with his property manager weekly, which would have saved him a lot of money. Prices have appreciated so much though that he asked me to sell his properties. That's why I was talking with him recently.

Investor #2 is local and has properties in Detroit and the suburbs of Detroit. I was commiserating with him about Investor #3.

Investor #3 is someone who found me on Youtube but is now working with an agent. This person also has properties all over the country so he thinks Detroit will be similar and he was not interested in my course. This happens more often than not when I try to warn people that Detroit takes some finesse and they shouldn't assume the property manager will take care of them. It frustrates me to watch people get hurt in Detroit and make a bad name for Detroit when really they could have avoided a lot of pain if they had the humility to take my course.

If you want to discuss buying a Detroit turnkey rental, please go to my calendar here and book a call: https://calendly.com/section8rentalmastery/investing

If you want to learn more about our online course, Section 8 Rental Mastery, book a call here: https://calendly.com/section8rentalmastery/course

Link to Course: Section 8 Rental Mastery https://www.section8rentalmastery.com/pl/2148292561 Exclusive Buyer List https://www.GreatDayPropertyManagement.com/exclusive-buyer-list We only sell a couple of houses a month. This is step 1 to join our waiting list. Cash buyers get our newly renovated turnkeys. If you're using a loan, I can sell you our other houses that we renovated between 2016 and 2020 that are now for sale again. Buyers typically sell them because their property manager has been too difficult. Or I can refer you to my best Detroit agent.

Free Offer: Section 8 Prescreening Questionnaire https://www.section8rentalmastery.com/pl/2148209883

For Sale Page: https://www.GreatDayPropertyManagement.com/for-sale I don't always update this page because my properties have a buyer sometimes before they're done and I can list them on this page. You can email me too at Monique@greatdaypm.com

Exclusive Buyer List: https://www.GreatDayPropertyManagement.com/exclusive-buyer-list We only sell a couple of houses a month. This is step 1 to join our waiting list.

Part 2: The Truth About Investing In Detroit Rentals: 5 Things that can GO WRONG!

Here’s a summary of the video by Monique Burns titled *PART 2: The Truth About Investing in Detroit Rentals: 5 MORE Things That Can GO WRONG!*:

1. **Contractor Issues**: Contractors in Detroit can be unreliable or unqualified, often providing misleading photos of their work. To mitigate this, consider hiring a reputable contractor to inspect others' work or buying fully renovated properties.

2. **Water Department Complications**: Mismanagement with the water department can be costly. It's essential to stay updated with their regulations and ensure proper handling of water bills, possibly using an online course for guidance.

3. **Break-Ins**: Vacant houses in Detroit are prone to break-ins, with common thefts including furnaces and new fixtures. Employing house sitters can help, though it's not a perfect solution. Effective security measures are crucial.

4. **Blight Tickets**: Investors often face blight tickets from the city, which can lead to additional taxes or legal issues. Avoid purchasing properties with existing blight tickets and learn how to manage or contest them.

5. **High Taxes**: Detroit has relatively high property taxes compared to house prices. Despite this, high rental incomes can offer a good return on investment, though appealing taxes has become more challenging.

6. **Reputable Contractor Search**: If you’re out of state, use Facebook groups and referrals to find trusted contractors and verify their work quality.

7. **Pre-Renovated Property**: Buying homes that are already fully renovated can avoid contractor issues and ensure the property meets quality standards.

8. **Security Measures**: Beyond house sitters, other preventive strategies should be employed to protect vacant properties from theft and vandalism.

9. **Course for Investors**: Monique offers an online course detailing how to handle issues with the water department and other aspects of Detroit real estate investing.

10. **Investing Strategy**: Despite the challenges, Detroit’s high rental yields can still make investing in properties profitable, especially if you manage taxes and maintenance effectively.

Part 1: 5 The Truth About Investing in Detroit Rentals: 5 Things that can GO WRONG!

They say high risk means high reward. But you can really cut down the risks in Detroit if you learn what they are and find ways to avoid them.

1. Consider who is advising you and know their level of expertise.

2. Choose the right neighborhood. It takes a true local to advise you on this. It’s not possible from reading blogs, watching videos, or searching Google.

3. The renovation. It’s hard to find a crew who can renovate well. Allow your project manager to do the management of the crew.

4. When choosing a property manager, get referrals from clients who have been through turnovers.

5. When choosing tenants, it’s more of an art than a checklist.

Exploring Detroit's Smelly Dump: A Stinky Adventure

From the above title to the AI summary below, I’m completely amused by using AI. For the title, I asked AI to give me a good YouTube title for a video giving it these words: “Detroit dump tour stinky smelly big tractors.” Here is another AI title I was given: A Day in the Life of a Detroit Dump Tour Guide. Sounds like a great tour!

And here is my own writeup about the dump:

Find out where the trash goes in Detroit. We had to unload our trailer at the dump in Detroit after renovating a house and I was a ride-along for the first time. What fun to see all those tractors bulldozing the trash away. The big tractors are pushing it onto a conveyor belt that I couldn't see. It then gets loaded into more trucks that take it away to a landfill somewhere. Somewhere smelly!

I never left the inside of our pickup truck, but I could smell the dump coming out of my pores and soaked into my hair.

We made the mistake of running an errand somewhere right after. The woman waiting on us recoiled and said, "Oh, you've been working somewhere?" I laughed because she could smell the dump on us. DISGUSTING!

I showered hard when I got home. Lots of suds and shampoo. But what FUN! I wish I knew how to work a big tractor. I betcha those people come home from work very happy every day. Smelly, but happy.

AI SUMMARY OF VIDEO

This summary reads like a children’s picture book.

Here's a summary of the YouTube video transcript titled "Detroit Dump: Big Trucks, Big Tractors, and BIG STINK!" by Monique Burns:

1. Monique is at a dump in Detroit where she sees huge trucks and a tractor.

2. Her husband is emptying their trailer into a pit behind their pickup truck.

3. She admires the tractor moving and compacting the trash.

4. Monique mentions needing a specific vest to get out of the car due to safety regulations.

5. She marvels at the process of trash being smashed down into the pit by large tractors.

6. Monique expresses amusement at the idea of operating such a tractor.

7. She notices various trucks dumping trash at the site.

8. Monique comments on the volume of trash and wonders if workers ever salvage items like a basketball she sees.

9. She explains the process of weighing in with the trash and then weighing out to determine the amount charged.

10. Monique concludes by sharing they disposed of over 1,000 lbs of trash during their visit.

This summary captures the main points of Monique Burns' experience at the Detroit dump as described in the transcript.

4 Things Lawyers Want Us to Know When Dealing with Evictions

Through REIA of Oakland this week I had the privilege of facilitating a panel of eviction attorneys from the Law Offices of Aaron Cox, my eviction attorney. He's the lawyer you never want to be on the wrong side of. I was nervous just meeting him and I'm his client! I got to ask his eviction team questions about repairs, the power of text messages in court, what paperwork helps us the most and the difference between using small claims court versus having them take the tenant to circuit court for collections. It was interesting. I was happy to learn that circuit court is contract law, whereas district court seems too willy-nilly to me. There's a reason! Each district court has slightly different ways they rule on the exact same matters.

If you're in Detroit, you can connect with Aaron Cox Law here: https://www.aaroncoxlaw.com/. Their prices are good and their service is top-notch. Their website is interactive and efficient too.

If you want to discuss buying a Detroit turnkey rental, please go to my calendar here and book a call: https://calendly.com/section8rentalmastery/investing

Free Offer: Section 8 Prescreening Questionnaire https://www.section8rentalmastery.com/pl/2148209883

If you want to learn more about our online course, Section 8 Rental Mastery, book a call here: https://calendly.com/section8rentalmastery/course

Link to Course: Section 8 Rental Mastery https://www.section8rentalmastery.com/pl/2148292561

ChatGPT Summary of My Video

Here's a summarized version of the YouTube video transcript titled "The Truth About Evictions: 4 Things Lawyers Wish Landlords Knew" by Monique Burns:

1. **Importance of Repairs**: Landlords must maintain habitable conditions despite tenants owing money. Courts may require reasonable repairs even if tenants claim long occupancy of the property.

2. **Text Message Evidence**: Text messages are crucial in court, especially for Section 8 tenants withholding rent due to repairs. Landlords should document attempts to access properties for repairs via text or email.

3. **Necessary Paperwork**: Landlords should retain documents like Section 8 adjustment notifications, abatement notices, and tenant intent to vacate forms. These documents are vital for legal disputes and clarifying payment responsibilities.

4. **Court Options**: Landlord-tenant disputes start in District Court, while small claims court handles smaller monetary claims. For larger amounts, Circuit Court is necessary, where leases and documented communications are pivotal.

5. **Small Claims Challenges**: Although cost-effective, small claims court judgments are challenging to enforce without legal representation. Attorneys are crucial for navigating Circuit Court, which focuses heavily on contractual details.

6. **Contract Law in Circuit Court**: Circuit Court proceedings prioritize lease terms, abatement notices, and other contractual details. Judgments obtained here facilitate enforcement through methods like wage garnishment.

7. **Enforcement Challenges**: Despite winning in court, landlords face challenges collecting from tenants reliant on government assistance. Attorneys specialize in post-judgment enforcement strategies.

8. **Screening Tenants**: Thorough upfront tenant screening mitigates risks, but even diligent screening may not prevent problematic tenants.

9. **Legal Insights**: Insights from legal experts underscore the importance of preparedness with documentation and legal representation in landlord-tenant disputes.

10. **Closing Thoughts**: The speaker highlights the complexity of legal processes and expresses satisfaction with her legal team's support in managing landlord-tenant issues effectively.

Unveiling the Truth about Section 8 Abatements: 6 Things You Need To Know!

Video Summary

Here's a summarized version of my YouTube video titled "Unveiling the Truth about Section 8 Abatements: 6 Things You Need To Know!":

1. **Initial vs. Annual Inspections**: Initial inspections ensure safety for Section 8 tenants, while annual inspections identify needed repairs.

2. **Third Inspections**: Some Section 8 offices charge for a third inspection; policies vary widely.

3. **New Issues**: Serious health or safety hazards found during inspections can lead to immediate action. If immediate action is not taken, your house can become abated.

4. **24-Hour Notices**: Issues like broken glass, missing smoke and carbon detectors or exposed wires require prompt repair to avoid abatement.

5. **Tenant's Role**: Tenants can request to move if repairs are not made by the second inspection.

6. **Landlord's Strategy**: Landlords may choose to allow abatement if they prefer a tenant change, but this can lead to non-payment risks.

7. **Eviction Precautions**: Start the eviction process if a tenant is likely to move due to abatement to protect against non-payment.

8. **Preferable Approach**: It's generally better to promptly make repairs than risk abatement, ensuring compliance so if the tenant chooses to move, the landlord can request payment until the time the tenant moves.

9. **Communication**: Regularly communicate with tenants and Section 8 offices to manage expectations and avoid misunderstandings.

10. ** Get Legal Advice to Remove a Potential Holdover Tenant**: Always consult with a lawyer for specific eviction procedures and legal protections.

Video Time Stamps

1. **Initial vs. Annual Inspections** (0:00-1:30)

- Initial inspections ensure safety; annual inspections identify repairs needed.

2. **Third Inspections** (1:31-2:45)

- Policies on third inspections vary; some offices charge, others don't.

3. **New Issues** (2:46-4:10)

- Serious health or safety hazards found during inspections require immediate attention.

4. **24-Hour Notices** (4:11-5:30)

- Issues like broken glass or exposed wires require prompt repair to avoid abatement.

5. **Tenant's Role** (5:31-7:00)

- Tenants can initiate an abatement by requesting to move if repairs aren't made promptly.

6. **Landlord's Strategy** (7:01-8:30)

- Landlords may allow abatement to facilitate tenant change, risking non-payment.

7. **Eviction Precautions** (8:31-9:15)

- Initiate eviction process preemptively if a tenant is likely to move due to abatement.

8. **Preferable Approach** (9:16-10:30)

- Promptly making repairs is advisable to risking a holdover tenant during after the house is in abatement.

9. **Communication** (10:31-11:45)

- Regular communication with tenants and Section 8 offices is crucial to manage expectations.

10. ** Get Legal Advice to Ensure a Tenant Moves out** (11:46-End)

- Always consult a lawyer for eviction procedures and legal protections.

Not in the video: Three More Things You Need to Know

1. Section 8 houses have annual inspections. If you do not pass the second inspection, you go into abatement meaning Section 8 stops paying you rent until the day it passes the inspection again. Section 8 will not pay you retroactively for the time you were in abatement. The house was not safe at that time, so Section 8 will not pay you.

2. And it's also not a good look to go into abatement. The different housing commissions know which landlords seem to go into abatement the most. The housing commissions do not have to accept you as a landlord and, make no mistake, they have a relationship with tenants. They can guide tenants on who the good and the bad landlords are. I'm proud that I'm on the top of their list of good landlords. I know this because I've been called before when they have a preferred tenant who is having trouble finding a landlord who can pass inspections.

3. When I know a tenant is leaving, I always start the eviction process regardless of what my deal is with the tenant. I tell them it's policy and not personal. Ask your attorney which paper to send at the time you have a hunch they're moving out. You don't have to take them to court when you send the notice, but at least you have the notice part done so you're not starting fresh once you realize they've become a holdover tenant (nonpaying house guest).

How to Reach Me

If you want to learn more about our online course, Section 8 Rental Mastery, book a call here: https://calendly.com/section8rentalma...

If you want to discuss buying a Detroit turnkey rental, please go to my calendar here and book a call: https://calendly.com/section8rentalma...

Link to Course: Section 8 Rental Mastery https://www.section8rentalmastery.com...

Exclusive Buyer List https://www.GreatDayPropertyManagemen... We only sell a couple of houses a month. This is step 1 to join our waiting list. Cash buyers get our newly renovated turnkeys. If you're using a loan, I can sell you our other houses that we renovated between 2016 and 2020 that are now for sale again. Buyers typically sell them because their property manager has been too difficult. Or I can refer you to my best Detroit agent.

Free Offer: Section 8 Prescreening Questionnaire https://www.section8rentalmastery.com...

For Sale Page: https://www.GreatDayPropertyManagemen... I don't always update this page because my properties have a buyer sometimes before they're done and I can list them on this page.

You can email me too at Monique@greatdaypm.com

**Disclaimer:** I'm not a lawyer, and the information shared in this video and blog is for informational purposes only. It is not intended to be legal advice. Please consult a qualified attorney for any legal concerns or questions you may have.

Application Fees -- New Renter Bill of Rights Proposal -- Good or Bad?

So many tenants are asking me sheepishly, “What is your application fee?” I do charge $35, but typically I only charge it to the person who is actually getting the house.

Tenants tell me they are going broke paying application fees. Tenants have been heard. There is a new proposal in Michigan called the Renter’s Bill of Rights. The proposal suggests a fee limitation restriction. Let’s talk about that!

What I really want are your stories. I want to use the comments in this video to give to the lawmakers to help them make their decision. I know the lobbyist for the landlords. But I think all the landlords need the tenant’s perspectives too.

In this video, I’m going to tell you who I am, offer 3 quick tips for Tenants, 2 suggestions for landlords, one about a law you need to know before you charge your application fee. And I end on two stories about application fees.

Introduction

I’m Monique Burns. My husband and I started our Detroit rental portfolio in late 2007. Our first tenant moved in in 2008. We built up our portfolio. From there we helped other people build their portfolios by buying the houses ourselves, renovating them, finding tenants, selling the houses, and managing the properties. We scaled up our management company and sold it in 2020. Now we are back to increasing our own portfolio and selling properties to homeowners. I do offer consulting services right now for investors who want to save money on property management fees or learn how Section 8 works for landlords. Email me if you’re interested. Monique@GreatDayPM.com

Tenant Tip #1

Find out what the qualifications are before you apply. If you ask me, I’ll wonder what you’re worried about. You may want to state why you’re asking, that it strictly has to do with application fees. But most of us legitimate landlords have our qualifications publicly posted. Look for that before you ask, if you can.

Tenant Tip #2

Tenants, I want to tell you something from a landlord’s perspective. When you complain about paying too many application fees, what I’m hearing is, “My application is bad and other landlords are denying my application.” So don’t say that.

Tenant Tip #3

Tenants, please watch out for a landlord who insists on taking the application fee before showing you the house. This could be a scam. I had a tenant tell me my house I had listed for $1,250 was on Craigslist for $750. For $50 she could get a viewing of the house. The applicant was suspicious and Googled my address and found the real ad. On the other hand, this may be the policy of the property manager so they aren’t wasting time showing a house to people not qualified.

What Tenants Need to Understand

I’m also hearing that Tenants do not understand what it takes for us to process your application. We have software to pay for. We have people to pay for to review your application and sort through what is true or not true. This can take an hour or two. Then to run the actual background check, it’s anywhere from $15 to $30. It depends on the property manager’s software. We then have to pay someone to show you the house. We would rather not do all that if you aren’t serious about the house.

On the other hand, I was thinking about when I had a property management company. I read resumes. I then took my time to meet the people. I spent a good hour interviewing my employees. If I were a bigger company, I would have sent their application to a company that does criminal checks and employment verifications. I never charged anyone to apply for the job!

Landlord Suggestion #1

Landlords, here is an idea I heard of. We could use the application fee and apply it to the first month’s rent to the tenant who qualified. We could do a soft check of the tenant’s application (read through it, Google their name, look up the court records), then decide not to do the background check and return a partial amount to the tenant.

Landlord Suggestion #2

Does your state have application fee restrictions? Here is a link to a website that shows each state. Michigan as a state does not, but Grand Rapids, Michigan, has its own ordinance that basically states landlords are to only charge the exact cost of running the background and they are to display what that cost is. Here is an example from this management company:

The following is an itemized explanation for the disposition and use of the application fee:

AmRent (Criminal, Credit, and Cross ID Check): $12.40

Online Application Software: $7.95

Office Administration (rental history check and income verification): $29.65

Here is a link to find out about your state’s rules. But you may want to Google your own municipality as well to see if there are application fee restrictions from MY SMART MOVE:

My 2 Bad Landlord Story

I was talking to a property management company and I asked how they pay their staff. It’s expensive!

“All of our office staff are paid by the application fees.”

I put this out as a general question on Metro Detroit Real Estate Investors Facebook Group and I got this one reply:

Lol you got commissioned sales reps working for big time property management groups that manage 2000 properties in Plymouth and they are charging 150 per application.. on a 20 unit that has one permanent open rental just for viewing and they will never rent that unit.. it brings in over 75k in one year with just 10 applications a week. What are you even talking about lol you really don't understand how this cut throat world works do you?

Conclusion

I see both sides to this. I try to meet people in the middle. I do the soft check for free. It’s my time that I should be paid for. And I only charge the application fee when it starts costing me money to run their background. I don’t know that I have it all figured out or not. What do you think is fair? If this bill passes, what amount should the fee be?

Section 8 Allows Criminals Now to Have Vouchers. Say WHATTT? HUD's Second Chance Rule Landlords Need to Know

I’ve been telling you all the wrong thing! I thought the Public Housing Authorities (PHAs) did a thorough national criminal check and if there’s a record, that’s it. No voucher for them. But I didn’t get the memo sent in April of 2022:

In a memo sent out to staff {in April of 2022} HUD Secretary Marcia Fudge instructed the department to review programs and policies that may "pose barriers to housing for persons with criminal histories or their families." USA Today

I have to say that I understand it and I don’t totally disagree. We landlords just need to be more thorough in our own criminal checks.

STORYTIME: AN UNFORTUNATE CRIMINAL

I received a call from an applicant. She asked me what I do for my background check. It’s illegal in Detroit to deny applicants based on a having a criminal record. We have to look at their whole picture and not deny them on that one checkbox. I explained that part to her and she was so grateful I look at the whole picture, because she was convicted of some kind of fraud. She was reluctant to tell me the story but it sounded to me as though she was just ashamed about it.

She was with a bad boyfriend who was stealing things. She knew he was stealing things but she was not participating. One day he was pulled over by the police who discovered the stolen items. Both she and her boyfriend were arrested. She said she was only 18 years old and she had never done anything wrong in her life and she found herself sitting in jail. Her public defender told her if she wants out of that jail cell, the best way out was to admit guilt to being an assessory. So she did. Now she has a record. She is in the process of having her record wiped clean though, she said. Would I still rent to her?

I would rent to her because she seemed believable to me. She admitted to knowing what the boyfriend was up to. She sounded so remorseful. It was a long time ago. I made a judgment call, having heard her story, and said yes, she could rent from me, considering she qualified otherwise. We never made it that far. I’m not sure how we left it. I talk with a lot of potential applicants!

HUD Offers Second Chances

I found a letter to the PHA’s issued by HUD’s from former Secretary Shaun Donovan:

HUD’s goal of “helping ex-offenders gain access to one of the most fundamental building blocks of a stable life – a place to live.”  HUD has also previously stressed the troubling relationship between housing barriers for individuals with criminal records and homelessness, stating that “the difficulties in reintegrating into the community increase the risk of homelessness for released prisoners, and homelessness in turn increases the risk of subsequent re-incarceration.”” Notice PIH 2015-19 Issued November 2, 2015

What Crimes are NOT Given a Second Chance?

I found this in the same Notice PIH 2015-19

Violent criminal activity, defined by HUD as any criminal activity that has as one of its elements the use, attempted use, or threatened use of physical force substantial enough to cause, or be reasonably likely to cause, serious bodily injury or property damage [24 CFR 5.100].

Each PHA is required to review the criminal activity. They cannot deny someone just because they were arrested. They have to look at the whole situation and even allow the applicant to make a case for themselves of their innocence or show remorse or changed behavior.

But there are two kinds of people who cannot get on Section 8, no matter what.

To be specific

One of them is if someone is on the Lifetime Sex Offender list.

Level 3 or Tier III offenses are considered to be the most serious. This category includes people who have been convicted of violent or non-violent offenses with adults or minors.

The other NEVER EVER criminal is the one who has been convicted of producing methamphetamine in federally-assisted housing. Don’t worry about cocaine, heroin, fentanyl, LSD, mescaline, moonshine. Meth, though? No, no, no, no voucher for them.

I wish I knew what the case was that started this!

I recommend doing your own background check. I use Mr. Landlord’s background check program. Decide for yourself. Ask the applicant yourself and use your own judgment. One of my longest best tenants is actually a reformed car jacker. He did his time and if I ever forget my keys, I know who to call.

How to Get the Max Amount of Rent Permissible from a new Section 8 Applicant

In order to find a Section 8 tenant, the owner needs to list their house for rent as being available for Section 8 tenants.

In my last video I suggested to list the house at www.AffordableHousing.com. Why not? This is where all the Section 8 offices tell their Housing Choice Voucher (HCV or Section 8) participants to apply.

I was wrong!

It has since come to my attention that owners have listed their properties on that website only to discover they could get more from the applicant than the amount on their listing. The owner gets Section 8 to agree to a higher amount. The paperwork is submitted. The inspection is done. The tenant moves in. Then it’s time for Section 8 to pay the owner and Section 8 goes to their favorite website to see your ad, https://www.affordablehousing.com/, and Section 8 says, “What? You will accept this lower amount? Great. That’s what we will pay you.”

What Amount do you List it for then?

Some people think they should just list it for the HUD Fair Market amount. This is the amount of rent you can get if you, the landlord, agree to pay for the gas, electric, and water and you are doing all the bells and whistles. You maybe offer a garage, a patio, a driveway, ceiling fans, washer, dryer, stove, refrigerator, disposal, and maybe even a gated community with a swimming pool. Then you can get that full amount. Oh, and it has to be in a neighborhood where the non Section 8 houses rent for that much too.

So the answer is to list it for around $300 less than the HUD FMR so your phone will ring. And on your listing you state, “Actual Rental Amount Depends on Voucher.” And DO NOT LIST IT ON SECTION 8’S FAVORITE WEBSITE! www.AffordableHousing.com. And once you get a tenant, for heaven’s sake, take down your listing.

So Where Should You List it if Not on the Favorite Website?

I’m playing around with this myself right now. There is a a local Facebook group my friend Jay started. That has been going well.

I will also post on Zillow but it does cost me $29.99 each time I list it. Yikes! And I am now selling my own local list of Section 8 office’s direct contacts and submission forms I’ve gathered over the many years of doing this.

How Do You Determine the Maximum Amount You Can Even Get?

This is NOT EASY! Tenants don’t seem to know or they don’t want to tell what that number is. The question you need to ask is, “What is your Payment Standard?” That’s Section 8 code language for what rent can it be if you, the tenant, have to pay your own gas, electric, and water. Then it gets all fuzzy. I have another video that goes into that.

The other code phrase is, “What is your maximum gross rent?” The maximum gross rent is the amount of rent if you, the landlord, are offering all those bells and whistles. If I hear a maximum gross rent, I minus off around $200 and that’s the amount of their payment standard. That’s the amount of rent that their Section 8 office will allow me to charge, give or take $50.

If I’m still lost, or the HCV applicant is lost, or even if I just want assurance, I will email their caseworker. Here is a sample of a recent email:

The replies from Section 8 area always so cryptic. This is the reply: “It will not.  Her maximum gross rent which is rent and any utilities she would pay cannot exceed $1394.”

I took that to mean if I take off $200 for the utilities, I can probably charge the tenant around $1,200/month for my three-bedroom Detroit home. That’s what I really wanted anyway. I was hoping for $1,250 but if she were really good, I would take her at $1,200 and just raise the rent as far as possible in a year. I never verified the exact amount with this applicant because she had too many other things on her record that weren’t that favorable. Let’s just say she knows her way around 36th District Court pretty well.

I did end up with a different tenant with a much cleaner background check. And the caseworker of the tenant I chose told me the most rent I could charge is “around” $1,250. They cannot guarantee the amount because it takes more calculations to determine the bells and the whistles. taking that amount up or down a little bit. Section 8 will also take into consideration just how much the tenant is paying toward rent as well before the final rental amount is accepted at $1,250 or if Section 8 needs to ask me to take that number down by a few dollars to make it work.

If you need more guidance on how this looks in real life, I’m starting to record myself questioning the applicants on the phone. Check with this link below to see what deeper training packages I’m offering.

Should You Rent to Someone with Section 8? Yes! I EXCLUSIVELY Choose Section 8 Tenants These Days.

I had a Youtube fan tell me she wishes she could find a landlord where she lives who would accept a Housing Choice Voucher (Section 8 Voucher). I said, “Well, I’ll make you a video you can send when you do applications.” So here it is!

Myth #1 — They Trash Your House

This one just bugs me. People that say this, declare it as though they are the experts. Whenever I ask them if they visited their tenant’s prior residence before moving them in, was that house trashed? “What? I never went to see how they lived before they moved into my house.” WELL THEN! No big shock. I’ve made a couple of videos about this subject.

This next video is my more current shorter version of how I do what I call home visits:

Myth #2: Difficult Inspections

…Said the slumlord.

We don’t find their inspections to be all that difficult really. We know what things they look for and we have them done. Section 8 wants health and safety issues taken care of. The challenges are usually the tenant-caused damages that we have to fix in order to pass the inspection. But those items can be billed back to the tenant and sent in as lease violations to their caseworker. The inspections have gone from yearly now to every other year, so not terrible. The rest of these benefits outweigh that.

Here is a video I forced my husband to do. He wasn’t happy with me putting a camera in his face, but he knows how to pass a Section 8 inspection. And the inspectors really respect him too.

9 Benefits of Renting to Section 8 Tenants

#9. No need to do the Detroit city certification process.

I love this one in Detroit! We just email the city our passed Section 8 inspection report and the city mails us back a Certificate of Occupancy. This saves us from getting the $500 lead paint test and the $160 city inspection and all the city’s repairs that come along with it. Check out my other blogs about how to do this.

#8 Landlord Incentive Plans

I haven’t gotten to take advantage of this because I sold my property management company so I’m really only placing tenants. But once the tenant moves and if that tenant caused significant damage, there are some grant programs out there that landlords can access that are meant to incentivize landlords to not give up on Section 8 tenants. When someone applies, ask them for their caseworker’s name. Email the Section 8 caseworker and ask if they have any incentive programs.

#7. Income Verification Done For Us

Section 8 is able to figure out exactly the tenant’s income to determine how much money is 30% of that income. That 30% is the portion the tenant has to pay to us. If the tenant’s income changes, so does the Section 8 portion. We don’t have to figure out their income and hope we’re somewhat close.

#6. We can get higher rent from Section 8 participants

This isn’t true in every city, but in Detroit, the HUD maximum limit is significantly higher than the market rental amounts. I can push my rent to be somewhere between the market rent that cash paying tenants are paying to close to the HUD FMR (Fair Market Rent). Go on the HUD website and check out your own county to see how much rent Section 8 is allowed to go up to. You can’t go above it. If you go right up to that amount, you have to prove that other houses are actually renting for that price too.

#5. Large Pool of Applicants

Most landlords historically shy away from renting to people with Section 8. When my ads state I love Section 8 or Section 8 Only, I get a LOT of applications. Lately, it’s not as many as in the past though because the Detroit courts have added 3-4 months onto their eviction times so a lot of us are seeking Section 8 only applicants.

#4 Verified Landlord Reference

If you ask for the applicant’s caseworker’s email address, you can request a landlord reference from the applicant’s previous landlord. HUD requires the Section 8 offices to give that to us. Nice!

#3. They Tend to Stay Longer

From my own experience and that of other landlords who rent to people on Section 8, they just stay longer. They don’t have that much money to be able to move is probably why.

#2. We Can Tattle on Them

Every lease violation is up for grabs for us to forward that along to their caseworker. Voucher holders do not want lease violations, and especially not anything leading up to an eviction, on their record. It plays against them and they could lose their voucher. If a bailiff has to remove them from the house, they do lose their voucher. If you’ve ever been through a full eviction and had to have that expense of having a bailiff clean out your house, you know how expensive that is. If you have to evict a Section 8 tenant, it is very unlikely that tenant will stick it out until a bailiff hauls them away.

#1. Reliable Cash Flow

It’s a beautiful thing every month knowing I will receive a set deposit directly into my bank account like clockwork.

Storytime: Detroit Rentals: What Do Squatters and House Sitters Have To To With It?

If there is a vacant house in Detroit for any length of time, you better assume an unscrupulous neighbor notices and he is in that house that night stealing the furnace and hot water heater. And if there is a vacant house another risk is that a squatter will move themselves in.

We have a had a few squatter situations recently that have had some interesting conclusions.

We have a house that we renovated back in 2019. We have since sold our property management business so that house was managed by a couple of different property managers. The owner got fed up with a non-paying tenant who took full advantage of the COVID court backlogs. That tenant was finally evicted after a year of no rent. I was able to sell the house to a new owner but between owners the house got stripped. This time instead of just stealing the furnace and hot water heater, these thieves took out the new kitchen cabinets, bathroom vanity, and removed the security and steel doors.

How could this have been prevented? The property manager could have immediately removed the furnace and hot water heater right after the eviction. The owner could have had the property manager board up the house immediately, which doesn’t help when the crew goes there to clean it out. Or they could have paid for DAWGS doors, which also makes renovating it harder. Or they could have hired a house sitter. House sitters come with their own issues though. See my video here on how to secure a property. None of these methods are cure alls though. But the house was simply left vacant too long.

In the following video, I go into detail about each of these options.

This video I made also goes into ways to handle squatters together with another squatter story:

Here is another video I made about a house that had DAWGS doors on it but a person with a vendetta found another way to destroy the house. This is more unusual in Detroit to have someone go to this length though.

When it came to our attention that the doors were missing and nothing was being done, we immediately had the doors boarded up. Soon thereafter my husband came with his crew to assess the turnover project. They did notice a broken window on the main floor, but they assumed that happened when someone stole the furnace after the tenants vacated. My husband Pat and his crew were walking through the house and everything was fine until they got to the upstairs. Pat opened the door and felt heat which had to be from a space heater and he smelled cigarette smoke that was really fresh. Pat yelled up the stairs, “Homeowner here. Coming up. Announce yourself.” No one announced themselves.

It was pretty dangerous for Pat to go up there because it could have been anyone and he could have gotten hit over the top of the head on his way up those stairs. But that’s not what happened. He got up there only to find a scared little young WOMAN crying hysterically in fear.

Apparently, she is from Ohio and moved to Detroit to follow a boyfriend. She also got a job at The Dollar Tree. She ended up dumping the boyfriend and had nowhere to live. She saw that we had power in this house so she was able to break in a window before we boarded it and let herself in.

So what to do? My husband took compassion. We have a 23-year-old daughter who is now in California going to graduate school. She had a very trying time herself between places to live and she even threatened that she might have to sleep in her car, but we were able to get her a hotel for the interim. Apparently, this girl does not have that relationship with her parents.

What to do? Turn her from squatter into house sitter. Perfect! But is it perfect? I kept asking Pat if I could make a video about this because I think it’s brilliant. And he said NO! We don’t know what will happen while we renovate the house. We don’t know what will happen when we need her to move. Well, she was great. She didn’t bother the crew at all. She kept to herself. She left ZERO messes. I mean we’ve NEVER had a house sitter that clean. And just yesterday we moved a tenant in that house and we moved her to another house of ours. No drama.

My next squatter story happened yesterday. Jeff, our crew leader, went to meet Pat at a house they were about to start only to see a man walk out of the house. Pat showed up and saw Jeff speaking with this man outside so Pat approached them only to learn that this man was squatting in our house.

Pat is a master negotiator. He should work for the FBI or CIA. He would probably be good with hostage situations too. So Pat kindly told the man that he needs to move out of our house. And that man lazily said he’d get around to it. Pat told him no, it needs to be done right now. Let’s go.

They entered the house only to discover the living room and kitchen were curtained off with sheets. Our old stove that came with the house was open and heating the house. There’s no furnace there of course. It’s a vacant house. And there was a HUGE flat screen TV on the mantle of the fireplace, a table and some chairs and TWO MORE MEN!

Pat at first was concerned it was a drug den but he saw no drug paraphernalia. Pat quickly deduced it’s a place these guys were using as their man cave and probably to sell marijuana from.

Pat used his skills of peacemaking and got these guys to pack it up and move it out. They didn’t want police showing up and looking for their warrants probably. They don’t strike us as the types that will be back either. But who knows?

This just happened yesterday. Our female house sitter is in a different house that has a furnace. We’re not feeling like we want her to move into this house just in case these guys do come back. But for now it’s all good because we don’t have anything of value there yet. What will we do to secure it once we do? That is TO BE DETERMINED.

Moral of the story: Buy a house that already has a newly vetted paying tenant in it so you don’t have to deal with these issues until that tenant moves out. And be ready with your plan for when that tenant moves out. Have someone lined up to house sit, remove the furnace and hot water heater, board it, DAWGS doors it — but don’t leave it gaping open welcoming in the thieves and squatters!

Another Cash for Keys Storytime: We're too nice! (Copy)

We bought this house in April of 2020 from a widow whose late husband had bought this house when houses were really cheap in Detroit. Her husband moved his sister into the house. Supposedly the sister paid $600/month rent to her brother. We wonder if she really ever paid rent. We kind of doubt it.

Upon purchase we contacted the tenant and told her we were doing a gradual rental increase to $900 (still below market level but cheaper than going through a tenant turnover) if she decides to stay in the property. Yes, she would love to. And she even complied with the gradual rental increases. Not without a lot of fuss of course. We also let her know that we’d be working on the house.

Eventually the rent turned into a hostage situation that was pending the work and the schedule of the workers and the tenant’s work schedule. The phone calls escalated. Why isn’t it done yet? Why is my living room torn up? I want my bedroom a different color. When are you renovating the kitchen? I want to tell you where the cabinets should go. No, I want more cabinets. I can’t let them finish the bathroom because I’m going to work now. Why isn’t my bathroom done yet? I insist since you’re repainting it all anyway that my bedroom is hot pink.

This was MONTHS like this of way too much coordination with a difficult person who eventually stopped paying rent. We had repainted the interior, changed her bathroom vanity, put in a new bathroom floor, changed some windows. Many things! We even repainted her whole basement floor. But it wasn’t ENOUGH or FAST ENOUGH for this tenant. So she called the city that it was an unlawful rental. We were in the process of getting the house renovated so WE could call the city to make it a legal rental.

We had to pay the ticket and then we HAD to go finish the work with her in it not paying rent, just to pass the city inspection issues that came up. We came back into the house only to discover she had scuffed up every painted wall, let her cigarettes scorch the new bathroom vanity and the worst thing was she chained up her little dog to a pole in the basement where the dog urinated and defecated and ruined the newly painted floor.

That was the Last Straw!

We have a real problem with chaining up dogs. But add the rest, and she was BEYOND the point of SHE’S GOTTA GO! It is incredibly rare that we’ve ever bought a house with someone else’s tenants in it and it worked out for us. I wish I had just evicted her from day one. This cost us months of holding fees when the goal was to renovate it and sell it.

We finally got her to move AMAZINGLY on her own by offering her $1,000 cash for keys. We had an eviction notice as well, but she didn’t wait out the court time. She found herself somewhere to live and off she went. Hallelujah!

I have a rental applicant now who wants to use it as an elderly group home. I usually do not consult with my buyer about tenant placements. It’s my specialty to know whom to choose, but in this instance, it felt right to consult with the new buyer. This is something new for us to rent to a group home. The buyers have approved. So this will be interesting. I won’t be the property manager, so I may not know. But I was able to get $1,200/month rent, which is really at the top of the rental market these days for a 3-bedroom house in Detroit. Having it listed at $1,200/month was attracting large families with large Section 8 vouchers. The house just wasn’t large enough for that many bodies in my opinion.

Lessons Learned

I don’t know! I don’t do gradual rental increases anymore. That buys too much time for the tenant to do what they were going to do anyway while we wait and see. I would have liked to have just evicted her. I’d like to be that person who can not be swayed by anyone and just handle business. Get them out so we can renovate the house and if they qualify, they can rent from us again. That’s what’s best for business. But then I meet the people and I don’t have the heart to do that, even though history has proven it’s the best idea. Really, I just don’t want to work with tenants anymore. We’re too nice! It doesn’t seem to help us in the long run or even the tenants who take advantage of us. Tenants need to be renting places they can afford. We can’t afford to do low rental amounts. There’s no profit in it. We don’t work for free. Sure seems like it sometimes though.

A Basic Renovation that is not so BASIC!

I happened to be in the neighborhood doing what I call a home visit. I like to see how tenants live before I let them rent from us. I noticed on my way to visit this applicant that 11947 Greiner was around the corner so I popped in on Jeff, our crew leader.

Jeff has been with us for around 20 years. He started working for my husband when we owned Burns Floor Covering. Jeff is VERY SMART. He has uncommonly good common sense. When we started renovating houses in Detroit, he was very happy to make the career change with my husband, Pat.

Pat and Jeff are pretty much self-taught on renovating houses. They have renovated around 200 houses in Detroit. Jeff is to a point where Pat gives him full free reign. They have always been in sync with each other. It was fun watching them do floors together. They barely speak but seem to know what the other is about to do and hand over tools at the right time like a ballet.

We bought this house for a fair price from a wholesaler. The intention is to sell it for a profit. When I filmed this, Jeff was bugging me that he kept saying it was so “simple.” It makes it seem as though we’re getting over on the buyer. But Pat just laughed and he said, “It may be simple to Jeff, but it’s not to other people.”

We get called to check out houses that other people renovate. Yesterday Pat saw a house that was renovated so the seller could list it on the open market. The renovation was done so badly though, it was outright embarrassing to even look at. The main items were done. There is a new roof, extremely overpriced new windows, and a new furnace. It’s been painted. But the finishing pieces that Jeff would know to do were not done. And those things are so simple!

• Cleaning! The countertop was gunky.

• The paint spatter plate covers weren’t replaced with new ones.

• The hardwood floor looked to be done by a total novice.

• The basement stairs weren’t carpeted.

• The old cheap hot water heater that’s about to die was left in the house.

• The kitchen floor wasn’t luxury vinyl plank, it was a cheap vinyl.

• The carpet was chintzy and installed incorrectly.

• The shower had a regular window in it instead of glass block.

• The showerhead was so cheap, one good spray and it would spray right off.

• The kitchen faucets was plastic.

• The basement floor and walls were the same dark gray.

• The paint job was sloppy.

So when Jeff says “so easy” all through my video, Pat shakes his head and thinks Jeff has no idea just how excellent he is and how much attention to detail he has. It’s the part that makes the difference. It’s why our houses are some of the best in Detroit, if I don’t say so myself!