The Dirty Truth About Detroit Property Taxes

This is my story of taking on a corrupt mayor’s henchmen, how a racist helped my cause, winning and losing and winning, and how our new mayor has turned the city around. 

My first Lose — My Own Ignorance

The House on Lakepointe we bought in 2009 for $10,000.

My husband and I were new to investing in Detroit. We only had a few houses so far in 2009 and we were high on success. We bought them starting in 2007 as the city was on its way to bankruptcy. We renovated them, rented them out, and we were making great money. When we bought our next house in 2009 for $10,000 on Lakepointe Street, we didn’t notice how inflated the taxes were. Then once we bought it and it was uncapped, the taxes went up even more and were close to $5,000 a year. 

WHAT??

My Second Lose — Me Against the Mayor’s Henchmen

Former Mayor Kwame Kilpatrick, photo from the Detroit News.

Have you ever heard of Mayor Kwame Kilpatrick? He’s now in jail and he’s the star of his own episode on American Greed. I didn’t know he was such a criminal then and it seemed everyone in the city was part of his criminal activity. So I went ahead and argued my tax assessment before the Property Assessment Board of Review. I thought I came in well prepared with sales comparables. But when it was their assessor’s turn to talk, I had no idea what she was saying. I asked clarifying questions to which she refused to answer and the whole board had a good chuckle at my expense. I lost my tax appeal. I left that meeting and acquired a real estate license.

My First Win — The Racist Helped Me

My husband, Patrick, and I in 2020, now older and wiser than when we bought the Lakepointe house.

I appealed the decision in Detroit and took it to the State level. The magistrate was a beautiful Persian looking woman. I barely made my case, strictly based on comparable values in the area, when the representative for Detroit interrupted me and said, “Girl, you don’t know ANYTHING about Detroit.” I took that to mean because I’m Caucasian. But she didn’t bother to find out that my husband/business partner grew up in Detroit and indeed knows Detroit neighborhoods and their values. 

The Detroit Defendant stated, “There’s nothing wrong with the Lakepointe neighborhood. I grew up in what’s called Little Beirut where I heard gunshots every day. Those ‘Aye-Rabs’ would burn down their own houses because they owned the insurance companies. They got rich doing that. Your house is a $60,000 house all day long. So your taxes are correct.”

The magistrate ruled in my favor.

My Third Lose Then Second Win — It’s Who You Know!

I took the legal decision from the State back to Detroit and asked for a new tax bill. DENIED. I asked for a supervisor. DENIED. 

Then I met a full-time tax appealer. He knew people. He took my whole portfolio for $750/property and he was able to get all my taxes reduced to half their current rate. Still too high on Lakepointe, but great for our other investments.

My Final Win — The New Mayor Who is Saving Detroit

Mayor Duggan: Instrumental to Detroit’s Turnaround, from the Detroit News.

The best new mayor, Mike Duggan, came into office in 2013. He had all the properties assessed more fairly and changed everyone’s property taxes. The taxes on Lakepointe are now $1,222.27. I could sell the Lakepointe house now for close to $50k.

Mayor Duggan has been improving Detroit top to bottom ever since. He brought in big tech companies (Google, Amazon, Microsoft, LinkedIn, Twitter, Pinterest). He improved city services. He helped homeowners keep their properties from tax foreclosures. His State of the City addresses are inspiring. And we’ve seen the prices of houses increase. Within the last year, the cost of houses in Detroit has increased by 7.7%. 

Detroit is a Come Back City! We still buy around two properties a month, renovate them, place a tenant, and now we sell them to investors worldwide. Our investors are earning a 12–14% ROI. 

And the best part, I doubt I will ever have to appear in front of a panel of criminal henchmen again!

Side Deals on Section 8 -- How to Get More Rent the Legal Way

There is a way to get extra money each month from voucher holders that is perfectly legal and not considered a “Side Deal.”

What is a Side Deal?

A side deal is an agreement between a landlord and a tenant wherein the tenant pays an additional amount of rent that is not in the agreement with the tenant’s Public Housing Agency (PHA). It is illegal!

How Much Rent Should a HCV Tenant Pay a Landlord Directly?

A Housing Choice Voucher (HCV) recipient is required to pay the landlord 30-40% of her income toward rent. 30% is the normal amount PHAs have their HCV recipients pay. There is some wriggle room for each PHA to have the tenant pay up to 40%, which seems to be decided case by case.

What is the Penalty for Side Deals?

I found this:

“Example
On July 29, 2005, a Connecticut tenant filed a qui tam complaint, under 31 U.S.C. 3730, against her former landlord. See Coleman v. Hernandez, 490 F. Supp.2d 278 (D. Conn. 2007). The tenant complained that pursuant to a HAP contract the landlord had agreed to accept $1,550 per month for the rental of an apartment in Stamford. Of this $1,550, the tenant was personally responsible for $20, and HUD via the HA paid the complementary $1,530. In spite of the explicit prohibition in the HAP contract, however, the landlord required the tenant to pay an “additional rent payment” of $60 on six separate occasions. In other words, the landlord inappropriately extracted an additional $360 from the helpless tenant.

OIG is aware of numerous similar examples of this sort of egregious conduct nationwide.
Penalty
Pursuant to the False Claims Act, 31 U.S.C. 3729 et seq., persons who submit to HUD or a HUD intermediary claims that are false, fictitious or fraudulent are liable for an assessment equal to three times the amount of the claim, plus a penalty of between $5,500 and $11,000 per claim. The United States may take the position that the entire amount of its HAP payment, not merely the amount of the excess payment by the tenant, is the claim that should be trebled where landlords make false certifications concerning excess rent charged. Additionally, each periodic rent payment constitutes a separate claim; thus, in the Coleman case the court levied a $33,000 (6 × $5,500) penalty against the landlord for her $360 victimization of the tenant.”

— https://www.federalregister.gov/documents/2008/07/10/E8-15663/oig-fraud-alert-bulletin-on-charging-excess-rent-in-the-housing-choice-voucher-program

What Are Legal Ways to Get More Monthly Income?

We landlords are allowed to charge for other items that are not rent if it is stated in the lease or if it is in an addendum to the lease. PHAs ask for a sample lease before approving the contract with the landlord. These extra fees MUST BE IN THE LEASE OR AS AN ADDENDUM. Each PHA has its own discretion to deny or offer a negotiation to the amounts.

Here are examples:

• Pet fees

• Lawn care

• Snow removal

• Internet

• Parking spaces (apartments)

• Cable

• Laundry facility

• Use of sheds or outer buildings

Reasons Not to Charge Extra

I really appreciate that the Public Housing Agency has determined how much 30% of my tenant’s income is. 30% of income SHOULD go to housing and if any more than that goes to housing, it is a very “house poor” way to live. It gets more difficult to keep up on home maintenance issues. It could cause the person to be late on rent trying to make ends meet.

I also need to know where this ability to pay extra has come from. Is it a boyfriend who is not on the lease? He could move out! Is it a side job of doing hair? What if she stops doing hair for whatever reason? Her voucher amount is not going to change if that side gig wasn’t part of her declared income. What if this side money of hers is found out by her PHA? They have amazing search engines. Then what if she loses her voucher? Where does that leave me?

Another concern is how does this look in court if your tenant quit paying that $300/month dog fee? The judge is not there to enforce Section 8, just the lease. But from my experience, judges want nothing to do with extra fees. They only enforce what is written up as rent.

There is the concern too of testers. A group called Project Sentinel in Santa Clara, California, sent out a survey to voucher holders asking them who offered to do side deals and who is currently part of a side deal. The tenants had no punishment for answering the questions, but they sure did receive awards if they turned in landlords.

“According to Project Sentinel, a tenant may be awarded a refund of the total side payments made to owner. In addition, the tenant could be awarded $1,650 to $3,300 for each month they made a side payment to the owner, regardless of the amount of side payment. Refund payments can go back as far as six years.”

— Article Source: http://EzineArticles.com/8869676

Story Time

One of my first tenants who had been with us for at least a decade gradually had her children move out from her three-bedroom home that we rented to her for $800/month. Her voucher amount kept getting lower. It was down to around $600/month. This did not work for us! Our beloved tenant also became disabled. So I asked her adult children if they would please rent the garage from us so we could afford to keep their mother in her home.

What I needed to do was ask the tenant to pay a fee to use the garage and put it in her lease and submit it to her caseworker. But I did not know that at the time. Instead I told her children, who were concerned their mother would have to move, that as long as they paid me $200 to use the garage, per a garage lease I drew up, that we could keep her at the house. The children would never sign the lease though. It was a lot of back and forth.

It only worked for a couple months that we received our full $800/month. Then the adult children started fighting with each other. Then they conveniently forgot they agreed to pay for the garage. We ended up in court in front of a judge. The son accused us of making a side deal. Fortunately, I had a lawyer and the judge did not care about that. She only cared about the missing rent. At this point the tenant was even behind on her portion of the $600/month. So my judgment wasn’t for nearly how much it needed to be. It was irrelevant anyway because at this point my tenant was disabled and uncollectible. It was just sad because we watched her children grow up in that house. We provided her and her children really nice housing for a decade. Then we had to have a bailiff remove her things. And it turns out the garage was packed the worst!

Conclusion

I have asked many directors of PHAs if they have ever sent anyone to jail for side deals or charged anyone with fraud. The answer was always a reluctant no. I was told they prefer to work with their few and far between landlords who will rent to HCV recipients. If they do find a landlord doing something wrong, they are more likely to have that landlord correct it financially. They will also quit working with some landlords.

I think most of us just want what is just. I need a fair amount of rent. The people who were awarded a voucher just need safe and reasonable housing. The PHA caseworkers just need to get their job done. I prefer to stay positive and hopeful about everyone’s intentions and choices.

• Most likely the landlord will have to pay restitution although it is a criminal offense.

• https://howtogeton.wordpress.com/legal-ways-to-pay-more-rent-on-section-8-housing-vouchers/

• Some leases bundle in services that Housing Authorities do not consider rental expenses. For example:

  • Pet fees

  • Lawn care & snow removal

  • Internet

  • Parking spaces

  • Cable

  • Laundry facilities or washer/dryer in apartment

  • Use of sheds or outbuildings

  • Snow removal

  Some of our readers were able to speak with their landlords and request to remove these fees from their rent. The fees were not included in the “rent,” but instead noted in the lease as a separate fee, or attached to the lease in an addendum.

  Important: Before going forward with an arrangement like this, make sure the lease language and any addendums gets approved by your housing worker. Side deals with landlords are not allowed, any financial arrangements with landlords must be approved by the housing authority.

“Example
On July 29, 2005, a Connecticut tenant filed a qui tam complaint, under 31 U.S.C. 3730, against her former landlord. See Coleman v. Hernandez, 490 F. Supp.2d 278 (D. Conn. 2007). The tenant complained that pursuant to a HAP contract the landlord had agreed to accept $1,550 per month for the rental of an apartment in Stamford. Of this $1,550, the tenant was personally responsible for $20, and HUD via the HA paid the complementary $1,530. In spite of the explicit prohibition in the HAP contract, however, the landlord required the tenant to pay an “additional rent payment” of $60 on six separate occasions. In other words, the landlord inappropriately extracted an additional $360 from the helpless tenant.

OIG is aware of numerous similar examples of this sort of egregious conduct nationwide.
Penalty
Pursuant to the False Claims Act, 31 U.S.C. 3729 et seq., persons who submit to HUD or a HUD intermediary claims that are false, fictitious or fraudulent are liable for an assessment equal to three times the amount of the claim, plus a penalty of between $5,500 and $11,000 per claim. The United States may take the position that the entire amount of its HAP payment, not merely the amount of the excess payment by the tenant, is the claim that should be trebled where landlords make false certifications concerning excess rent charged. Additionally, each periodic rent payment constitutes a separate claim; thus, in the Coleman case the court levied a $33,000 (6 × $5,500) penalty against the landlord for her $360 victimization of the tenant.”

How to Find a Section 8 Tenant to Rent Your Property

The myth of Finding Section 8 Tenants

People assume there is some kind of Section 8 qualification a landlord must do. It doesn’t work that way. Landlords simply prepare their house for a tenant. If you are not a slumlord, your house should be up to city code. If it is, you are probably able to pass a Section 8 inspection as well.

Once your house is up to city code, then you list the house for rent. If someone who has a Housing Choice Voucher (Section 8) comes to you, that applicant will have a move packet. Before you take her move packet, you will definitely want to do the background check and home visit, as you would with any other tenant. If you find she qualifies, you can fill out her move packet and send it in to her caseworker at her Section 8 office (otherwise known as her Public Housing Authority or Housing Commission). The move packet is a set of forms the PHA needs to prove you are the real owner of the house and to know how much the rent is and if you are paying utilities or not. Once the Section 8 office determines your paperwork meets their qualifications, which can be up to 14 days, Section 8 will email you or call you to schedule an inspection. Once the house passes the inspection, then the tenant can move in and rent payments begin.

Check out my video and blog on the Pros and Cons of Renting to Someone with Section 8.

Also be sure to see my video and blog on how I do the initial phone screening.

Do you really want a Section 8 tenant?

I used to list my houses for rent to “Section 8 Only” applicants. This caused a lot of anger with applicants. And I learned along the way that having Section 8 isn’t always all that. What matters the most is the background check. I have a very extensive background check system I use. I’m eventually putting together a class on it that any landlord can do from any city. So for now send me an email and I’ll add you to a list once I know when I will be offering that class. Monique@GreatDayPM.com

How I write my ads to attract a Section 8 voucher holder

I will state in the first line that we pass inspections. Or I will use the wording, “Section 8 OK” or “Section 8 Welcome.” This is enough.

Here are my top places I post my properties:

Zillow-Trulia-HotPads

I post my properties on Zillow and they feed out to Trulia and Hot Pads. I get the majority of my leads from Zillow.

Facebook Marketplace

I post my properties here as well. When people reply that they are interested, I always respond with a video of the property and I ask them to text me if they want an application.

Housing Commissions or PHAs or Section 8 Offices

Over the many years of providing quality housing to voucher holders, I’ve accumulated email addresses of different Section 8 caseworkers. In order to find the housing commissions (known as Public Housing Agencies or Section 8 offices) in your area, you can try calling HUD’s Public Housing Resource Center at 1-800-955-2232. Ask them for email addresses. You should first email the housing commission and ask if they accept listings and if they have a preferred form.

The problem with the local Section 8 offices accepting your posts is that applicants will sometimes call MONTHS after the house has been rented because there is no way for the housing commissions to remove the ads once the house has been rented unless a landlord lets them know. This works for me though because I just tell the person about another house I do have and I tell them not to be discouraged because they just need to ask the landlords they call what other properties they may have.

GoSection8.com

This is a site I do have to pay for ($39/month paid yearly). Second only to Zillow, I get most of my leads from this site.

Rentlinx.com

Another site that I used to use is Rentlinx.com. They link to several sites that have rentals. They are too pricey for me at $55/month and they don’t list on GoSection8.com.

Craigslist

This used to be the only place I listed my properties. It was great. I’ve used it a little bit since then but I get far more response from Zillow. Scammers will take my listings from Zillow and then place them for cheaper rent on Craiglist. They will meet the tenant at the house and say they can’t get them in right now. Or they will ask the tenant to submit a deposit. Then the person naturally goes missing. It’s really sad when the applicant finds me and lets me know this happened.

Nextdoor

This looks like a new feature. I can’t tell if I can do this living outside of Detroit. I tried it and it did not work. I may need to have a separate Detroit account. But if your rental is in your same area in which you live, this could be a nice option.

How to Screen a Section 8 Tenant -- The Background Check

Disclaimer: This blog does NOT go into the entire screening process. I only describe the differences when screening a Section 8 Housing Choice Voucher holder.

Income Verification

This is my favorite difference. When a tenant applies to get a Housing Choice Voucher, she is required to submit boatloads of paperwork and income verification. For details please see my blog about How to Get Section 8.

I always refer to tenants as she because in Detroit, for my clientele, I rarely have men apply.

I know if someone has a Housing Choice Voucher that her portion of rent is equivalent to 30% of her income. This is incredibly helpful to me to not go through the bother of collecting every shred of evidence and then verifying its validity. I still gather evidence though but mostly because, when I do tenant screening, I am always thinking of what a skip tracer may need to find and garnish the tenant should the tenant leave without paying full rent. Proof of a job is very helpful. If she only has disability or social security, then I know she is a higher risk tenant. We cannot garnish a person’s disability or social security income.

Another good thing about knowing the tenant has 30% of the rent herself to pay is that I know she actually can afford that 30%. If she lets me know she could not pay it, I know to question what choices she has made not to pay it. The most common excuse I hear is funeral expenses. “The flowers were so expensive.” Regardless of how cold I seem, that is a choice. I will start the eviction process. Something was valued above housing. It is for her to figure out how to catch the past rental payment up before her court date. And with Section 8 I am required to turn in my notice of eviction and then eventual judgment. People with Section 8 seem to me to be more careful not to make these choices.

If the tenant’s income should change due to a loss of a job or having a baby and needing time off from work, she may no longer have 30% to pay me. Section 8 will pay the whole rent at that time. That is a wonderful reassurance!

See my blog and video about the Pros and Cons of Section 8.

Felonies

HUD has rules about which felons are not allowed to have a voucher. Look into Chapter 5 in the HUD book for details. http://bit.ly/HUDChapter5. But each PHA, who distributes the vouchers, have their own set of rules of which felons they will accept and which ones they will not.

Then I have my own rules of which felons I will accept and which ones I will not. My rules seem to coincide with the PHA rules from what I have been able to tell so far once I’ve done my digging into people’s felonies. My own rule is more open to finding out the whole story. I’ve denied a non Section 8 applicant pedophile rapist despite the fact that he seemed happily married with a small child and had an excellent job. I had the right to deny him. He was not a protected class. His girlfriend confirmed he had just gotten out of jail for five years. She also confirmed it was no Romeo & Juliet case of young consensual love either. She assured me though that he just had a bad attorney and it wasn’t even true so I asked her to show me the court records or proof he had presented to his attorney, but she did not comply. But I have accepted people with marijuana offenses from the days it was totally illegal to even possess marijuana. I have accepted a car jacker who had done his time 25 years ago and had lived a clean life since. He is one of my few male tenants and he is doing well. None of these examples had Section 8. The felons I have seen with Section 8 were usually drunk drivers. I do not see very many felons who have a Housing Choice Voucher.

What you need to be aware of though is that someone while on the voucher can commit a felony and their PHA may never know. Their records are only run randomly once they have been granted a Housing Choice Voucher. I wonder if they ever run them, knowing how short staffed they all seem to be. In my video I talk about Ferlita the Felon. I believe she must have lost her voucher when she did 5 years in jail. I found her record as I was editing my video. At the time she applied for my house, though, she still had a voucher and had not yet had her court case apparently or her sentencing. She wanted my house, she said, “even though that closet isn’t big enough for all my shoes.” I kindly lost touch with her.

Disclaimer: I’m not sure this is the one who came to view my house, but this person’s record is for identity theft and her name is Ferlita. Go to Google Images and look up mug shots for your applicants. You may be surprised!

What HUD will not allow are people with drug related felonies. People who had an eviction for anything drug related also were denied Housing Choice Vouchers. But the eviction rule is only if they were evicted for something drug related within the last 3 years.

From HUD’s Chapter Five. The following seems promising but each person on Section 8 that is denied the voucher has the right to appeal. I have heard it is harder to remove someone from Section 8 because these appeals often favor the voucher holders.

“In determining whether to deny assistance based on drug-related cirminal activity or violent crimial activity, the PHA may deny assistance if the preponderance of evidence indicates that a family member has engaged in such activity, regardless of whether the family member has been arrested or convicted.”

What landlord evicts tenants for drug related activity? NOT ME! I prefer not to mess with drug dealers. I will evict them on anything BUT drug dealing. I have had a couple drug dealers as tenants. They were always the boyfriend, not my tenant, who never seemed to stay very long. When he was there, though, the rent was always paid! We did find one of our front doors replaced after one of the boyfriends ended up in jail and paying the rent got harder for the girlfriend who was our tenant. The neighbors later told us about the drug raid. Maybe the neighbors reported him to the police? We just didn’t know and I’m grateful we didn’t because I am not armed to take on drug dealers.

My question is if HUD denies people with drug related evictions, I’m curious how often they even come across such people. So I ALWAYS DO MY OWN CHECK FOR FELONIES! And I do all the rest of the background checking as well, such as doing a home visit.

Evictions

A very common mistake that landlords make is assuming if someone has a Section 8 voucher and she has had an eviction that she will lose her voucher. THAT IS NOT TRUE! For one, evictions do not disqualify tenants from being awarded a voucher in the first place. It only makes sense. They need the voucher because they couldn’t afford to live.

With my new-to-Section-8 applicants, I dig deep into their evictions. I look them up on www.36thDistrictCourt.org. I read through every line. Then I call the applicant and ask her what happened there. It’s often a case of a slumlord. But if she would’t pay the rent because he was a slumlord, she needed to have put the rent into escrow until a judge made the determination. Gathering the applicant’s story before I call the landlord is always helpful. I will ask the landlord too what the case was all about. I get both sides of the story and decide for myself where the truth may lie.

I do NOT accept applicants who took the eviction so far that the landlord had to hire a bailiff to haul them out of his or her property. No matter what financial situation someone is in, that to me is evil. I will ask the tenants in the initial phone screening if they had a bailiff remove them. There is never a sufficient answer in my mind. Getting to the point of the bailiff is so costly for a landlord. Not to mention, now that tenant has the knowledge of how to stay in a property without paying rent for the longest period of time. They can take their education elsewhere! I definitely never even show them the house.

For my applicants who have used their voucher already at other properties, I STILL look up their record for evictions. It’s really frustrating to me that there isn’t a better way for the PHAs (Public Housing Agencies/Section 8 offices) to know which of their voucher recipients have been evicted. We landlords have the onus of turning in our notices and judgments to the PHAs so they know and can deny someone a voucher. But I was told by one PHA in Detroit, the biggest one, Detroit Housing Commission (DHC), that DHC simply puts the eviction paperwork in a file. They do not have the manpower to move people off the program. Other PHAs take it very seriously. But they still have to go through a whole appeal process with the tenant who will plea her case. And guess who doesn’t get to appear at the appeal? The landlord!

I’ve also read in that Chapter 5 that the voucher holders are also supposed to turn in any notices of eviction or judgments as well. I wonder if that has EVER happened?

So I ALWAYS check for myself if the person has been taken to court for anything that would lead me to believe she would not be good to do business with. I tell applicants on the phone before I even show them a house that I not only care about evictions but I care too about how many times they were even taken to court. I find it egregious that a landlord had to take them to court to get them to pay.

If you don’t have Detroit applicants and that wonderful case lookup feature on www.36thDistrictCourt.org, just see if your city does have a similar website. If not, it is public record if someone has been taken to court. Find out which court handles landlord tenant issues and call them with the applicant’s name. The court should be able to tell you what the cases were, who the plaintiffs were, how it was ruled, and the address of the tenant at the time. And NEVER trust your background check software. Not all courts report evictions. And they certainly don’t report all the other nonpayment cases that were adjourned — which likely means the tenant or the landlord was a no-show. But the landlord STILL got so far as to having needed to pay to have it filed to get the tenant to catch up or leave. You need to know this!

The Best Most Surprising Tip

If an applicant already has used her voucher renting from someone else, the PHA is REQUIRED BY HUD to share with the potential new landlord the contact information for the current and past landlord.

Good luck getting the PHA to answer the phone! To bypass this issue, on your rental application, always get the name and email address of that applicant’s Section 8 caseworker. Email the caseworker and get the information.

Other than simply the contact information, it is up to the PHA if they will share with you even more information. This is what HUD’s Chapter 5 states about this

“The PHA is required to provide the owner with:

The family’s current and prior address (as shown in the PHA records); and

The name and address (if known) of the landlord at the family’s current and prior addresses.

This information is intended to assist the owner in conducting his or her own screening.

The PHA may choose to provide a prospective owner with additional information it possesses about the family, including information about the tenancy history of family members or about drug-trafficking by family members. If the PHA chooses to provide such information, it should describe how the information was obtained, and encourage the owner to confirm such information.

When developing such a policy, the PHA should consider a whether all information contained in the tenant file should be provided, or if the PHA should provide only information that has been independently confirmed.. The policy must provide that the PHA will give comparable information about all families to all owners.”

By all means, take HUD up on this tool!

The Home Visit

In my next video and blog, I will discuss my very best of the best tools I use to make sure a tenant will not destroy my own property. I pay them a visit where they are living now. I will share with you how I go about this, because I know it seems very AWKWARD! But SO WHAT! It needs to be done. This is a very large business transaction. We landlords need to use every tool in our arsenal to help ourselves not end up in an eviction situation.

If you haven’t subscribed to my YouTube channel, please do! You will be alerted when the next video airs.

Please let me know what other subjects you would like me to cover. I’m feeling my next playlist needs to be the entire background check. Yes or no?

How to Get a Section 8 Voucher -- What Landlords Need to Know — Tenants Too -- How to Bypass the Section 8 Waiting List

Landlords need to understand who voucher holders are to be able to determine if someone with a Section 8 voucher is eligible to live in your property.

Is It True That a Tenant Just Needs to be Low Income?

That is NOT TRUE! There is only so much funding available to each Section 8 office to be able to grant vouchers to people. There are far more low-income people than there are available vouchers.

Who Qualifies to Receive a Section 8 Voucher?

Quoted from the HUD guidebook: https://www.hud.gov/program_offices/public_indian_housing/programs/hcv/guidebook Check this out for more details on each of these bullet points.

• Family definition. Only applicants who meet a PHA's definition of family are eligible.

• Income limits. The household's annual income may not exceed the applicable income limit as established by HUD.

• Citizenship status. The applicant must meet the documentation requirements of citizenship or eligible immigration status.

• Eviction for drug-related criminal activity. Persons evicted from public housing or any Section 8 program for drug-related criminal activity are ineligible for assistance for at least three years from the date of the eviction.

How to Find a PHA Accepting Applications

The first step a tenant needs to take is to find a Public Housing Agency or Section 8 office that is accepting applicants. In Michigan there is a nonprofit group that posts this, The Community Housing Network. As soon as a PHA has available vouchers, The Community Housing Network will send an alert.

https://communityhousingnetwork.org/other-services/section-8-wait-list/

Also in Michigan check out the Michigan State Housing Development Authority’s website for waiting list openings all over the state and a link to apply:

https://www.michigan.gov/mshda/0,4641,7-141-5555-270458--,00.html

Elsewhere you can Google Housing Agents in {Your State}. Here is the list of all the housing agents in Michigan:

https://www.michigan.gov/mshda/0,4641,7-141-5555_44739---,00.html

Elsewhere if someone wants to find a housing agency, I recommend contacting your local Housing and Urban Development (HUD) office.

Here is another resource I found searching the web. It’s a Long, Long List of how to get housing assistance:

http://bit.ly/longlistHowToGetS8

Required Documents to Apply

If you are a tenant, there is a great resource with more details about this list. I’ve copied this person’s list here. The man who made this website has been homeless so he knows the system from that angle. https://hudhousing.weebly.com/applications--documentation.html

1. State ID must be current

2. Social Security Card

3. Birth Certificate

4. Gather all income documents -2019 Income Tax – income verification

5. Paystubs or SS, SSDI, or any type of income

6. Bank Statements

7. Gather all Bills -Rent, utilities, phone, internet, car payments

8. Any medical Bills

9. Medical and Mental Records & Diagnosis

10. Homeless Letter

11. Gather all award letters- SNAP. FOOD STAMPS, TANF, SS, SSDI, VET, HUD

12. DV police reports & court paperwork

Application Done — Now What?

If her application is accepted, that Section 8 office or PHA will typically put her name into a lottery. If and when her name is drawn, then she gets a voucher. I have had tenants tell me they have been on waiting lists for up to 7 years. I always say “her” because it is incredibly rare I have had male voucher holders contact me.

How to Bypass the Waiting List

There is a ranking order of who will be granted a voucher the soonest. PHAs are required to supply vouchers to a percentage of the lowest income applicants. The ones who rank above the lowest income are those who are low income AND elderly, veterans, victims of domestic assault, and displaced or homeless people.

Domestic Assault

Domestic assault is the hardest one to prove. Each PHA has its own requirements and criteria when it comes to domestic assault.

I have heard from an applicant that she had to live in a shelter, take several classes through the shelter, live in a small subsidized apartment for a time, pursue a job and/or further her education and apply for all assistance available before she was even granted a Section 8 voucher. She told me when other women saw the big binder they needed to work through to get Section 8, they just dropped out. Very few made it through the program.

The PHA’s Background Check

The PHA goes through HUD’s list in Chapter 5 (link above) to determine if the person qualifies. When it comes to the criminal status, the PHA has discretion beyond drug-related crimes whether or not to grant a voucher. When I do my own background check and I’ve found crimes and I’ve questioned the applicant about it, I’ve always agreed with the PHA’s determination.

My own background check for a voucher holder is slightly different than how I run a background check for other applicants. Check out that blog and video here too.

My favorite part of what Section 8 will do is determine the voucher holder’s true income. Once the true income is determined, the PHA states how much of the rent the tenant has to pay to the landlord. It comes to between 30-40%. The PHAs try to keep it close to 30% but if the rent is a little high for that, the PHA can go up to 40% at its own discretion. It’s good to know if they deny the landlord renting to their applicant. There is wiggle room if you know how to dispute it.

Look for my video and. blog about that too. Determining the Rental Amount.

The PHAs are able to verify much more than I am by going through this list and using their own search engines. Tenants think they can hide assets and other income but they will be found. Be sure to look at that HUD Housing Choice Voucher Chapter 5 for more details on each of these.

• Salary

• Overtime Pay

• Commission

• Tips

• Interest or Dividends From Assets

• Pension

• Retirement Fund

• Child Support

• Alimony

• Unemployment

• Social Security

• Welfare

• Disability

• Worker’s Compensation

• Lottery Winnings

  (HUD. "Housing Choice Voucher: Chapter 5, https://www.hud.gov/sites/documents/DOC_35615.PDF)

How Do I Know the Tenant Can Pay Her Portion of the Rent?

I don’t! She may have spent her portion of the rent that month on a funeral, back to school expenses, marijuana, or other life circumstances. It happens. I even had one tell me she would not pay rent that month because she had to spend it on her daughter’s prom. I evicted her. When we cleaned out the house there were several souvenirs from Las Vegas too.

But I do like knowing that Section 8 is regularly checking her income to adjust that amount. If the tenant is not paying her portion, I don’t feel so badly starting the eviction process.

The Catch to Trusting that 30-40% of Income Determined by the PHA

It does take one to three months for the PHA adjustment in the rental portions. I have had tenants tell me they lost their job, they have told Section 8, but they can’t get their caseworker to respond or set up the appointment to show the records of the change. Meanwhile, the tenant cannot afford to pay me her full portion of the rent. I have to make a judgment call if I believe the tenant. If she pays what she can, I’m less likely to start an eviction. It’s awfully unfair to have an eviction on someone’s record when I know how long it takes for some caseworkers to process the change. When the change is a loss of income, the PHAs are supposed to prioritize that and make the adjustment. But I know from experience, it doesn’t seem to be much of a priority or the caseworkers have too many other pressing issues at the time. Regardless of how late the tenant is with her portion of the rent, I will send eviction papers for the tenant to present to her caseworker to motivate the caseworker to make an adjustment. I always make sure the attorney drops the case before the court date though so it will not appear on the tenant’s record.

To help you decide if you should rent to someone with a Section 8 voucher or not, check out my blog and video on the Pros and Cons of Section 8.

Story Time: The Fatal Holding Fee — This Could Happen to You with a Section 8 Tenant

Did you know how vulnerable you are from the time you fill out the move packet to the time of the inspection? The tenant can choose another house and you may never know. Why? If the tenant doesn’t feel like telling you, no one will. The PHA, Public Housing Agency, is not allowed to even tell you because you, the landlord, are not their client.

Let me tell you how it went down with me one time. ONE TIME. This wasn’t normal.

Holding Fee vs. Security Deposit

To protect myself from this kind of problem, I am always sure to collect a holding fee from my applicants as part of the approval process. A holding fee is just that. It’s money down to hold the house. If the tenant backs out at the end, then that’s my retribution for the lost time. I keep the money. I also state in my contract about the holding fee that if it’s my fault the tenant cannot move in, that I refund the holding fee.

The Technicality of a Holding Fee: In your contract about the holding fee, which I have as a paragraph in my welcome letter to the applicant, I state that once the tenant moves in this fee will be applied to her rent. I do NOT say it will be applied to her security deposit. If a judge sees the holding fee is equal to the security deposit AND I state it will be applied to the security deposit, the judge will just deem it a security deposit. If the judge sees it as a security deposit, then the applicant who backs out on the landlord is entitled to receive that money back.

I thought my clarity on my welcome letter about what the holding fee is was pretty bulletproof with this particular applicant. But NO!

How it Started

The Section 8 voucher holder applied for my house. (See my video and blog about how I do a phone screening before I even showed her the house). I ran her background check. (See that video and blog too about the process specific to Section 8 voucher holders.) I picked up her move packet. (There’s a whole process about that so look for that video and blog too.) I turned it in to Section 8 and waited for her PHA to tell me when the inspection would be. I received the call with the date of her inspection. And that’s when it went silent between my office and the applicant.

What Happened — Could Have Been Fatal

We were doing our final preparations for the Section 8 inspection. I called the tenant to tell her we’re all on track. She would not answer. I thought something might have happened to her.

My staff and I next tried repeatedly to reach out to her Section 8 office. After about two weeks of my attempts and on the same day of the inspection, I was told via email by the PHA they cannot talk to me because I am not their client. I had no idea what that meant. Was she dead? What should I do?

Shortly after that, also on the date of the inspection, I finally did hear from the tenant. She called to say she wanted her “security deposit” back because she found another house. I was so angry!

I told her that is NOT how a holding fee works. It is NOT a security deposit. She just cost me several weeks of missed rent waiting on a now nonexistent inspection.

She then informed me that she would kill me if I did not give her the money back. I was undeterred because my office has a steel door with a code. Not to mention my office is nearly impossible to find. We do all our work electronically so no tenants come to my office. I figured she was just blowing smoke. I have a contract stating that holding fee is mine now. I’m solid.

But she showed up right when my leasing agent was at the steel door. My agent recognized her from showing her the house and she let her right in. The woman came flying at me screaming. I was barely able to escape into my office. I pulled my door shut as she was pulling it open.

I called my husband in a panic as she was screaming through my door that I should get out there and fight her. My husband suggested I give her the holding fee and be rid of her. It’s not like calling the police would give me 24/7 protection.

I reluctantly gave her the money. Then I didn’t come back to my office for about a week! I was really shook up after that. I’ve never been in a position like that in my, obviously, very insulated life.

Lessons Learned

1. For one, I think her reaction was very abnormal and it does not define people with Section 8.

2. I learned to stay in closer contact with the Section 8 voucher holder from the time of submitting the move packet to the date of the inspection.

3. I learned, when doing research for Section 8 Secrets Revealed, that I could have made a complaint about the caseworker who didn’t have the courtesy to be more helpful.

4. I could have submitted a formal complaint to this voucher holder’s PHA with the director copied in the email about the voucher holder’s behavior toward me. She doesn’t deserve tax-payer funded free rent subsidies. There are plenty of other people who do deserve it.

I will say it again. It’s all about relationships! We need to be good to our applicants, our staff, each other, to the staff of the PHA. It usually works for our benefit when we are kind. I have not let this incident scare me from Section 8 voucher holders.

Section 8 for Dummies -- Landlord Section 8 Training 101 -- What is Section 8?

What on earth is Section 8? How do people even get on the program? Why am I making videos and blogs about it?

What is it?

During the Great Depression in the 1930s, the Housing and Urban Development started a program to provide housing people with low income and it’s all spelled out in Section 8 of the Housing Act of 1937. The industry standard term is Section 8 but the proper term is Housing Choice Voucher program.

• HUD provides money to Public Housing Agencies all over the country.

• With that money, these PHAs distribute vouchers to people of low income.

• Voucher holders/tenants take those vouchers to landlords who have their houses for rent. The landlord is not required to rent to them. But some states have laws about discriminating against someone’s source of income.

• The landlord then runs a background check on the voucher holder as they would any other tenant.

• If the landlord chooses to rent to this person, the landlord will have to fill out a Move Packet that the tenant provides.

• Then an inspector from that PHA will come to the house to check for safety issues.

• Once the house has passed the inspection, the landlord receives the rent payments directly deposited in his or her account each month.

• The tenant has to pay 30% of her income toward rent. So the landlord only needs to collect that amount. Sometimes the tenant does not make enough income to pay any of her rent and Section 8 pays the full amount.

Why am I making these videos?

My husband Pat and I are Detroit property investors and landlords. We currently buy houses in Detroit, renovate them, place a tenant, and sell the houses to savvy investors all over the country and the world. We also started a property management company here in Detroit. I’m also the educator of my local REIA group, REIA of Oakland. I’m making these videos to bring excellency to landlords. I also hope someone will like to buy houses from us in Detroit after watching these videos and learning about my expertise as a property manager.

How do Tenants Get on Section 8

They need to be considered low income by government standards. They need to be a U.S. citizen or have papers. Or they can have a disability, be homeless or be a victim of domestic assault. Veterans also have a voucher program that is similar.

Please see my blog and videos for more details about how to get on Section 8.

I hope this is crystal clear what Section 8 is. Please look through all my videos and blogs for more details that may interest you about Section 8.

Can I Tattle to Section 8 if my Tenant is Bad? Know Your Role!

Yes, you can tattle to Section 8, but you need to know why it works sometimes and why it doesn’t. And you need to know HOW to tattle on your tenants. It can bite you in the rear though!

Know Your Role: PHA to TENANT to LANDLORD

The Section 8 voucher holder and the Section 8 office (PHA) have a relationship once the tenant is granted a voucher. Landlords then have a relationship with the tenant just as we do any other tenant. That means we have to use the courts. Then the landlord also has a relationship with the PHA — and in that relationship we can tattle. The other part of our relationship with the PHA is much like a bank. They are not the court, but they are the bank who pays us the money.

Lease Violations and Notices of Eviction

First, you need to use all your legal resources. If your tenant is violating her lease, you need to send the tenant a lease violation. If the tenant is breaking her lease and you want to end the contract, then you need to file for an eviction.

For more details see my video and blog on How to Get Rid of Your Section 8 Tenant

In the process though, it is a WONDERFUL THING that the tenant knows that if she is given any lease violations, that the lease violation is also sent to her Section 8 caseworker.

Notice I said you can send a lease violation to the caseworker. That does not mean a big nasty email about how much you despise your tenant — that you prescreened! They don’t take random complaints. They take lease violations. They disregard the landlords who obviously don’t know how to get along.

It is also very impactful if you send a police report to the caseworker. If there is no reply, be sure to forward that along to the PHA’s director.

An Alternative to Tattling

Instead of actually tattling, I have warned tenants before that I could send in a lease violation, but I really don’t want them to lose their voucher. This is a lovely motivation!

Depending on which PHA you are working with, turning in a lease violation may help and it may not. I know our biggest PHA in Detroit, Detroit Housing Commission, seems to struggle to back up the landlords. I was told they will put the email with the lease violation in a file to refer to someday if they need it. It made me wonder if anyone has ever lost a voucher?

For more information on how tenants lose their vouchers, watch my video and blog about that. It’s good to know so you can be prepared if it happens while you are the landlord.

Another PHA I spoke with, Taylor Housing Commission, said they take lease violations very seriously. They will send a “Nasty Gram” to the tenant warning them that if this doesn’t get straightened out or if they do this again, they are at risk of losing their voucher. Then if there is still another lease violation or two, the tenant is given a letter stating she has now lost her voucher.

I wondered why Taylor Housing Commission bothers to follow up so well. I realize all the PHAs are slammed with paperwork. This seems to be an item that could easily be pushed aside. The director told me though he wants landlords to WANT to work with Taylor Housing Commission because it’s really hard to find good landlords for the voucher holders.

The Catch with Tattling to Section 8

But here’s the problem. If your voucher holder loses her voucher and she’s still in your house, that means you won’t be getting any rent from Section 8 next month! But the tenant does have the right to appeal the decision. In that situation, a third party hears the case. I would have to guess the tenants do not win these cases very often. There are so many deserving people waiting to get a voucher and the PHAs really want to help the most people.

For me, just knowing I can tattle on a tenant is wonderful. With tenants without Section 8, a lease violation only goes so far. Good luck enforcing it! The courts are only interested in really egregious damages a tenant causes. I have never had success removing a tenant through the courts based on what’s called the Damage and Health Safety notice.

What we really need to focus on is screening our tenants so we are never in a position to need to tattle!

For more information on screening a Section 8 tenant, see my video and blog….

How to Make a Complaint About the Section 8 Office or Section 8 Inspector.

Have you ever found working with a Section 8 office or PHA, Public Housing Agency, nothing but FRUSTRATING? I know I have. Many times I have wanted to file a complaint but I just didn’t know how…until NOW!

Are You Sure You Want to File a Complaint?

The frustrations we deal with are typically either with a caseworker or an inspector.

Caseworker Complaint:

The caseworkers are doing the most thankless paper-pushing job I can imagine. When I researched what it takes to be a caseworker, the standards at Detroit Housing Commission are that the applicant has a minimum of a GED and the starting wage was around $12/hour. I found out at another PHA the wages are closer to $19/hour. Regardless of what they are paid, if you’ve ever been a manager or boss, you know that there are lazy and insubordinate employees everywhere. To complain against a caseworker, you will need to figure out who the director of that housing commission is and complain directly to him or her.

Communication with Section 8 is usually via email. I recommend keeping your complaint very nonemotional. I remind myself that they are government regulated people so they need documentation for everything. Whatever documentation you can provide will be your only help. Clearly, if you just sound angry and like a chronic complainer, your email will land in the trash.

I have to say, I hesitate to complain though because I’ll be working with that caseworker for years. Another tactic I have done is to make an appearance at the Section 8 office if at all possible. This has gotten me the most results.

Inspector Complaint:

A common complaint about inspectors is that they call out cosmetic or weather-related issues. Be sure you are fully aware of the requirements before you complain, only to find out it’s standard. I recommend you read through HUD’s A Good Place to Live on the Detroit Housing Commission’s website before you complain.

A Good Place to Live: http://www.dhcmi.org/Page.aspx?level=2&id=62

If you find the complaint to be ridiculous due to the weather, such as a new roof during an ice storm or cement work in the cold of winter, you are able to contest the inspection result with the PHA director and ask for an extension. It is HUD guidelines that PHAs may give extensions at their discretion.

This is from the Detroit Housing Commission’s Website:

DELAYED EXTERIOR REPAIRS GENERAL PROCEDURE A Landlord/Property Manager may request an extension to complete repairs due to climate conditions beginning October 15th through April 15th. You may call anytime before June 1st to have the unit inspected for Delayed Exterior Repairs. However, any unit that remains outstanding as not have a passed inspection will be notified the first week in June. ™

Step 1: All interior items must pass the Housing Quality Standards inspection before requesting an extension. ™

Step 2: In order to qualify for a delayed exterior extension, repairs must be related to the following 6 items: 1) exterior painted surfaces 2)exterior concrete steps 3)driveways,4) patio decks 5)walkways 6)masonry work. ™

Step 3: All request for delayed exterior repairs must be submitted in writing to DHC Inspections department no later than five business days following an annual inspection or complaint inspection. ™

Step 4: All delayed exterior repairs must be completed by the first week of June. A notice will me mailed out informing the Landlord/Property Manager of the re-inspection date. ™

Step 5: Failure to complete repairs by the re-inspection date will result in a retroactive abatement. Abatements will date back to the initial failed inspection. The amount of the abatement cannot be charged to the tenant.

There is one housing commission I stopped working with because I felt their inspector had gone rogue. When applicants would call me and they were from that housing commission, I told them no and why I could not work with them. Every time they told me I wasn’t the first landlord to tell them that. The right thing I should have done was crafted an email to the director with evidence of why I felt every inspection was bad. The directors don’t necessarily know this is happening, but they do know there is a lot of turnover which causes extra work. I would think that would be something they would like to know!

How to Complain About the PHA

In order to better understand the relationship between HUD and your Section 8 office or Public Housing Agency (PHA) please check out my other blog and video…..

Blog: https://bit.ly/WhatIsSectionBlog

Each Section 8 office is under the jurisdiction of the local HUD office. In Michigan the HUD field office is in the McNamara building downtown Detroit on the 16th and 17th floors. I’ve been told they are less than helpful to landlords. They are only interested in regulation violations. And the local PHAs don’t work for them.

So who is the PHA’s boss? The PHAs that are named after a city or municipality answer to a five-person board of commissioners who are appointed by the mayor of that city. You may attend those meetings thanks to the open meetings act. The PHA director who told me this said he has yet to see any Joe Public attend that meeting though. If you do attend, you have the right to speak to the panel.

If you need to complain about a MSHDA office, I would recommend finding the MSHDA office which is near MSU in Lansing, Michigan. You will have to do some digging to find out who their boss is. I would think it would be easier to complain to the head MSDHA office than to meet a panel and give a speech!

Are you wondering if you should even bother renting to someone with Section 8? Please see my video on the pros and cons of renting to a voucher holder…..

I have to say, I’m not a big complainer to Section 8. I have actually NEVER done it officially. I do believe in having excellent relationships with them. I am always kind and to the point with them. It has worked for me, that and an occasional visit to their office. When they see me and recognize me, they are all smiles because I am the rare landlord who isn’t there to tear them apart.

To learn more about your place with Section 8, check out my video and blog about the roles of the landlord to the tenant to the PHA. It’s good to know your Ps & Qs!

What is Section 8 Really and What Landlords Need to Know About It

Section 8 is the industry-standard term used to describe Housing Choice Vouchers. Basically it is federal government money paid to a landlord to subsidize a tenant’s rent. It is supervised by Housing and Urban Development (HUD). Here is how HUD explains it:

What are housing choice vouchers?

The housing choice voucher program is the federal government's major program for assisting very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market. Since housing assistance is provided on behalf of the family or individual, participants are able to find their own housing, including single-family homes, townhouses and apartments.

The participant is free to choose any housing that meets the requirements of the program and is not limited to units located in subsidized housing projects.

Housing choice vouchers are administered locally by public housing agencies (PHAs). The PHAs receive federal funds from the U.S. Department of Housing and Urban Development (HUD) to administer the voucher program.

A family that is issued a housing voucher is responsible for finding a suitable housing unit of the family's choice where the owner agrees to rent under the program. This unit may include the family's present residence. Rental units must meet minimum standards of health and safety, as determined by the PHA.

A housing subsidy is paid to the landlord directly by the PHA on behalf of the participating family. The family then pays the difference between the actual rent charged by the landlord and the amount subsidized by the program. Under certain circumstances, if authorized by the PHA, a family may use its voucher to purchase a modest home.

How the HUD money flows:

HUD administers funds to different Public Housing Agencies (PHAs). Most people just call PHAs Section 8 offices. Often the PHA is named after a municipality or a region. Near me we have Taylor Housing Commission, Livonia Housing Commission, and Detroit Housing Commission. Originally the municipalities wanted to offer housing for their low-income residents, so the municipality would have their own Section 8 office. But once Fair Housing laws were passed against steering people to live in certain areas, the municipalities no longer could restrict people from living in different areas. Each PHA will have a region they service. The region is usually based on being able to fund the inspector. They try to keep them somewhat close.

Not every PHA is named after a city and not every city chose to have a PHA. In Michigan the largest provider of Housing Choice Vouchers is Michigan State Housing Development Authority (MSHDA). MSHDA then subcontracts with private entities to provide the vouchers. In my area some of them are RPI, CMA and Szjana & Associates.

In another blog and video, I will explain where to make a complaint about your PHA. It isn’t easy! How to Make a Complaint about a Section 8 Office or Section 8 Inspector

Be Sure Your House is Within the Voucher Holder’s Region

When someone wants to rent your house, you always want to ask them the name of their “Section 8 office.” I don’t say PHA in case they don’t know that term. Sometimes they don’t even know the name of their PHA. So then I will ask them where it is. I then ask them if they are new to Section 8. If they are new, they may not know that they are outside of their PHA’s region. The experienced voucher holders are much more certain of their allowable regions. If you are in doubt, you can always check directly with the PHA. I recommend finding an email address though. Getting a PHA to answer the phone can be difficult.

Beware of Porting!

If you find out that your applicant is outside of her region, you then need to decide if you want to go through the porting process with her. Unfortunately for everyone, when a tenant chooses to move to a new region, she is required to secure a rental before she is allowed to “port” her voucher to a local PHA. If you do go through the process with her, expect the port process to take an extra three weeks to two months. You will be waiting on her current PHA to work with her new PHA to get it done. There is really no good financial incentive for the PHAs to take on new voucher holders. Some PHAs used to refuse porting until HUD stepped in and told them to deal with it and do it!

In another video and blog I will explain how a tenant is qualified to have a Housing Choice Voucher. This will help you determine your own criteria when deciding if she qualifies for your standards.

Understanding what Section 8 is is only the beginning. There is so much more to learn about it. Please check out my whole series. Had I known all this from the beginning, I could have saved so much money!

A Little Known Reason Why You Should Buy Turnkey in Detroit

What is Turnkey? That means that you buy a house that has already been renovated and it is collecting rent. We sell houses that are turnkey. We assume many risks before we buy a house that most investors are never aware of.

It’s assumed that a danger of working in Detroit is gang violence. But we have had far more run ins with pit bulls than gangs. In this video I briefly tell about a couple of our pit bull experiences. But this blog post goes into far more detail.

There are problems in Detroit with dogs just running loose everywhere. The animal control has short hours, their phone is often busy, and their response is pretty minimal. Emma Hernandez, a nine-year-old, was fatally mauled in the summer of 2019. The neighbors complained repeatedly about that dog that wasn’t kept fenced in his yard. Our renovation crew is on constant alert for a vicious, hungry stray dog to approach them outside. It has happened.

If you bought a house in Detroit and hired a crew to renovate the house, are you insured against dog bites? Do you even want that risk?

There is also big business in Detroit with pit bull fighting. In February of 2020 a large pit bull operation with 21 dogs was busted. This house is in an area that is very desirable for investors. We have renovated many homes nearby.

There are four specific pit bull incidents that have happened with us that could have seriously jeopardized our renovations.

#1. The Stray:

It is not wise in Detroit to be without a gun. There was a stray pit that approached one of our crew members. The dog was charging him as though he were ready to kill. Thankfully, our crew member was very quick to draw his gun. When the dog saw the gun, the dog backed right off. It’s as if this dog KNEW that was a lethal weapon. How did the dog know that?

#2. The Pit Bull Ring Next Door:

We often buy several houses at once. One house most certainly had a pit bull ring next door. The people in and out of that house were very threatening looking. Our crew understandably refused to work on our house until the problem next door was gone. Thankfully we had other houses to work on. We tried to report the problem to the police. We never heard anything. I even tried to report it to the State Police. They seemed bored by my complaint. Nothing happened. I tried to contact the owner of the house, but it was a vacant home with no traceable owner. We assume the people there were squatters. One day a few months after we purchased the house, we noticed that the squatters and multiple dogs were all gone. No time was lost for us because we were working on other houses. Obviously this could have turned badly in several different ways.

#3: The 2 Pit Bulls Inside a House we Purchased:

When we realized there were two pit bulls inside this beautiful home we purchased, we knew we couldn’t work on the house until the dogs were gone. My husband, Pat, who runs the renovation crews, decided to do the right thing and go through animal control. We didn’t know how poorly run and understaffed they were. They understandably needed proof we own the house. This was an issue because Wayne County can take months to record deeds after a closing. I think we finally showed them our closing papers. In the process we lost a few days of renovation.

But the night after animal control finally removed the dogs, the police called us to say someone set fire to our house. Obviously the owner of the dogs didn’t appreciate that we removed his dogs. Maybe he didn’t think to get them from animal control or maybe he didn’t want to do the necessary vet care to claim the dogs and remove them from animal control. But his solution was revenge on us.

This was really unfortunate because we then had to figure out what to do with the house. We were eventually able to collect insurance money. Thankfully we have a good insurance company and we knew to have the right kind of coverage for the least cost. But we were still left with a house with burn damage that we couldn’t renovate for any kind of profit. We did find a buyer through our network of people we know in Detroit. The buyer then did nothing with the house. It still sits there as a vacant eye sore now four years later.

#4. 1 Pit Bull Inside a Garage of a House we Purchased:

We recently purchased a house that had a pit bull in the garage. The dog was chained to the wall. She had a water bowl with no water. She had no food. But we knew someone was keeping her there for some purpose. We suspect she was to be a fighter dog. Why else would she be kept in a garage?

Pat felt so badly for the puppy that he went to a liquor store, because there are so few grocery stores in Detroit, and he bought her a bag of food. Pat also bought her a gallon of water. He took both things to her and slid them across the floor. Pat didn’t know if she was vicious or not so he didn’t dare get too close. It is also very dangerous to go to liquor stores in Detroit. Muggings happen there quite often. We avoid them.

That night our whole family returned to the house with our dog rescue friend. To rescue dogs, this woman will put herself in positions that could get her arrested. Her passion is to save dogs who are being mistreated. Pat was very reluctant to bring all of us, but our girls insisted to be part of saving this poor dog. And we certainly couldn’t have saved her ourself and brought her to my house to potentially eat my poodles!

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Pat kept telling us to hurry up and get out of there. Just as soon as our friend pulled away with the dog, a group of teenage boys came walking down the middle of the street being dragged by a huge pit bull who looked a lot like the one we just took. Pat told us to get in the car but Pat stayed on the front porch. One boy who may have been around 12 or 13 years old broke away from the group and said, “Hey, man, that’s my dog in the garage. I can move it to the alley to get it out of your house.”

Pat replied, “It’s too late. The dog is gone. You can’t leave a dog with no food or water. She’s gone. It’s too late.”

The boy looked stunned. Then he thought about it for a minute and said, “Well, do you mind if I just get my water bowl back?”

The boy was just looking to see if it was true. After he left the garage without his bowl, he yelled up to his friends, “Hey! I’ll have to get you another dog. Don’t worry. I’ll get you another one.”

That too could have gone sideways a million ways. It did not thank goodness.

We Absorb Risks

There are multiple other risks we also absorb before you even buy the house. Each of these things could have gone differently. A lot of our success has to do with the relationships in Detroit that Pat and I have built. Pat also has a way with all kinds of people and dogs. People naturally like him as do dogs. That can’t be learned, I don’t think. Pat is also incredibly instinctual about his surroundings. And while I’m at it, he’s also lucky. Good things happen for him wherever he goes. He is very positive and optimistic.

We have heard many, many stories of investments going badly for people. We have gotten many investors to buy our turnkey houses after their own learning mistakes trying to do it themselves. The stories of what went wrong are far ranging. Mostly they have to do with lack of experience in Detroit. They always have great financial intelligence, but that just doesn’t always translate to Detroit-specific intelligence.

Buying a house in Detroit is never risk free. We know that. But we do absorb most of the risk that costs people their entire profits. So of course we highly recommend that you buy a house turnkey. And we recommend that you buy it from us!

Investor Tour of Detroit - What to Expect

We encourage our investors to come here to see our project for themselves. There needs to be a lot of trust for the investor and for us to have the best working relationship. Spending a few hours together driving around Detroit and usually having lunch or breakfast too helps us all to know each other better.

How to Qualify for a Tour

We normally have a waiting list of investors who want to buy our houses. We only sell 2-3 houses a month. We only give these tours to investors who are close to their purchase dates. Our investors typically have properties in other cities as well so they are serious buyers. When we meet by phone I am usually able to get a feel from the investor if they are “tire kickers” or if they really plan to buy. We are a small family-owned operation. My husband, Pat, and I work most days of the week it seems. So if someone asks us for a tour, we really hope they are serious about buying a house because it is a day of work or time with our children lost for us otherwise. We aren’t a tour company. There are companies that offer tours that people can go on. We just ask that our guests are respectful of us and not coming here for just the fun of seeing Detroit.

Where to Stay?

The airport is not in Detroit. It’s 20 miles outside of Detroit via busy freeways. So we recommend that our guests rent a car when they arrive or take Detroit Metro Cars from the airport to a hotel downtown Detroit.

In order to get a proper feel of Detroit, I recommend choosing a hotel from this site:

https://detroit.curbed.com/maps/best-hotels-detroit-design-architecture-westin-foundation-shinola

Or one can do as one of our guests did and stay in an Air B & B in Detroit. I recommend renting one near Wayne State University. The architecture there is beautiful and WSU has bragging rights to being the safest campus in Michigan.

One of our guests stayed in an Air B & B outside the WSU area that was just a room in someone’s home. The host was full of information about Detroit and our guest had a great time and paid very little for his lodging. The only problem was the taxi driver refused to drop him off at the door because the driver was scared of the neighborhood so the taxi dropped our guest off two blocks away. It turned out to be a very nice neighborhood with a strong neighborhood association though. It just looked scary to the driver who must not know Detroit very well. Check it out here:

https://www.airbnb.com/rooms/9429833?source_impression_id=p3_1596108003_BtcTMAtEwkTU83ba

Tour Day - What to Expect

Pat and I will come to your hotel or Air B&B in Detroit. We don’t pick people up from the airport. It’s just too far away. Sometimes we start with a breakfast or we just go into the tour. We have our guest sit in the front seat. This is when the guest meets Pat who takes over. Pat drives our guests around downtown Detroit and down by the river to see Windsor, Canada right across the Detroit River. It’s amazing how close we are to a foreign country.

We then drive along Jefferson Avenue toward Grosse Pointe, which is a suburb of Detroit. We show the new construction and the blight, which is just lots of potential for a city that is revitalizing.

Following Jefferson, we take it right into Grosse Pointe where Jefferson becomes Lakeshore Drive with Lake St. Clair on one side and beautiful Grosse Pointe homes on the other side.

We have a Detroit neighborhood we like to drive people through next where we bought the majority of our houses the first few years. It is a neighborhood that has revitalized so much that the prices have been driven up.

Then we show you the new neighborhoods where we invest now that were similar to our first neighborhood. We predict the same future in the current areas in which we buy houses.

Detroit has an east side and west side. We drive along the famous 8 Mile Road to head to the west side. If you’re familiar with the musical artist Eminem, we drive you by the movie scene in his trailer park. It doesn’t look any different than it did in his movie 8 Mile.

House Tours

In the process of showing our guests the east side and west side, we give a few renovation tours, depending on what we have that we can take you into at that time. We usually will show you a house under renovation. It’s great if the crew is working that day so you can see them in action.

We also like to show you a house that we haven’t started working on yet so you get a feel of how much work we actually do typically. There is a lot of experience and expertise involved in getting a house ready to produce a good ROI. We will also show you a house we have for rent so you can see something more finished.

All that takes a good two to three hours. The day is packed with information from Pat about Detroit and how he chooses his areas and his houses to renovate.

If you plan on investing in Detroit and you’re not a “tire kicker,” we encourage you to see Detroit for yourself and meet us in person. You can see me all over my Youtube channel (https://bit.ly/DITLcoall), but Pat won’t let me film him. So you will have to come here yourself to meet the master behind the renovations.

I hope to hear from you soon. I can be reached these days on my cell phone at (248) 390-3982.

Check out our completed or for rent house tours here:

https://bit.ly/EastSidecoall

Check out more Detroit information here:

https://bit.ly/Information-coall

Why are Furnaces Stolen in Detroit and What to D0 About It

It is true what you have heard. If a house is left vacant in Detroit, you can count on the furnace and the hot water heater being immediately stolen from the house.

Why?

Scrap Metal

Possibly for the scrap metal. But after talking with a scrap metal yard, I find it very hard to believe. For a typical Detroit house furnace, the return is only around $12. Owners are to report the stolen furnace serial number to the scrap metal yards and the scrap metal people said they will contact us if our stolen furnace and hot water heater show up. We’ve actually never tried this because we only just learned about it and our furnaces do not get stolen that much anyway.

Just Want a New Furnace

More likely we believe it could be someone getting an upgraded furnace for someone else they know. Furnaces aren’t cheap and it gets really cold here for several months of the year.

To Sell on Facebook Marketplace

We do know that the furnace thieves are selling them on Facebook Marketplace. We have always wanted to bust someone for it, but we doubt the police would be interested in assisting us in the sting. We just focus on moving forward, luckily for the thieves.

What to do?

Remove the Furnace and Hot Water Heater

One of the more common methods is to remove the furnace and hot water heater during the renovation and time between tenants. We do not like this method. It’s hard to paint cold cracking walls. It’s hard to work in the cold. Heat is required to install carpeting and refinish the hardwood properly. And it’s impossible to clean a whole house well with cold water.

Board the House

A cheaper method is to board up the house. But thieves break through boards pretty easily. And no natural light while doing the turnover or renovating a house is pretty brutal. It’s also hard to list a house for rent with boards on the windows.

Door and Window Security Guards

Another common method is to use a system such as DAWGS doors. The DAWGS company puts huge metal covers over windows and doors. We prefer this to no furnace, but there are other problems with this too. The light in the house isn’t as good for the renovation without natural light. It’s hard to work on windows and doors with the covers there. We usually replace the doors and with the DAWGS doors on, the actual door is removed, which leaves the house exposed to the cold, defeating the point of keeping the furnace on. They are more expensive than our solution. The doors with the code are tedious to get in and out of. A thief could break in anyway but it usually will deter them. It’s also a big sign that the house is vacant and there must be something good in there. Recently we had a house we were checking out with DAWGS doors where the basement window cover was ripped right off and the glass block smashed out to gain entry.

Housesitters

Our solution is Housesitters. Over the years we have acquired a few good ones. We’ve been through a few bad ones too who may have stolen a furnace or two. We’re not sure. Sometimes furnaces get stolen when the housesitter runs to the store. There just is no perfect solution.

How We Found Them

We initially found them by posting an ad on Craigslist for a gig. My phone BLEW UP with applicants. I was mostly interested why they would want to stay in a house under renovation and when it was time to leave if they had somewhere to go so we wouldn’t have to evict them, if it came to that.

Housesitter Story

We’ve only had one who wouldn’t leave. And he turned into a hoarder. So Pat, my husband, got a dumpster and a few guys and removed his stuff. The housesitter called the police. Pat knew he’d have a good two hours before the police arrived, so Pat and his guys emptied the house of the man’s belongings. When the police arrived, Pat was able to reason with them. Pat is a genius at tough negotiations. His dad was a judge so I’m pretty sure it runs in his family. Pat dropped off the ex-housesitter and all his belongings at the housesitter’s cousin’s house. She was furious when she saw all the stuff!

But the housesitters we have now are excellent. Each has a different story for why they appreciate housesitting. Most of them are really clean too. And they all love Pat. I think that is an important factor in why we have such good ones. It’s been a long time since we’ve had a furnace stolen.

This housessitter is OCD-level clean and he is getting his degree in business online.

Please let me know if you have any questions. Emailing me works the best. Monique@GreatDayPM.com.

Corona Virus Update from Monique

Where have I been???

So much has happened since we went into quarantine and even before then that I’ve been eager to share with you.

Property Management Good Changes

Before the quarantine in February I made a radical change to how I’m doing the property management. I completely changed my staff and improved my methods. I stopped making videos while I figured this all out. I was hoping it would be good for everyone. And was I ever right! There have been a few learning curve bumps, but now it’s figured out and it’s going beyond my expectations GREAT! Give me a call and I can tell you more.

Maintenance During Quarantine

When everything was shut down, it was the hardest for Pat, my husband. During our renovation of the property management company, a lot of the maintenance fell on him. He did NOT want to enter houses in Detroit where the general consensus was to NOT quarantine. But he had to do it in a lot of cases and we are all fine.

Renovation During Quarantine

We also struggled to keep our business flowing of buying 2-3 houses a month and renovating 2-3 houses and selling 2-3 renovated and rented houses. The renovation was difficult. We were all told to stay home and that we could be ticketed for doing nonessential work. The lines at Home Depot could be hours long. Then Home Depot stopped selling paint because they deemed it nonessential. Our special order window company shut down for 8 weeks. Then our renovation staff went on unemployment. Pat was truly a one-man-show! It’s amazing what all he accomplished anyway though. And we are so happy now to have our renovation crew back to work.

Renting Houses During Quarantine

Meanwhile I had to figure out how to get these renovated houses rented (with a few boarded windows) and not violate the real estate mandate of not showing houses. NO PROBLEM. I SWAM!!! I already had videos of them anyway. The applications flooded in and I was able to choose the best applicants EVER! And I never had to meet them until move-in day. This was good because I also was going through a staffing change at the time so it was all on me.

New Education During Quarantine

I was able to work from home too, which was really nice. I took the time to take a Udemy.com class on digital marketing. I’m rather proud of myself for making a successful Facebook ad that I targeted in Argentina. I even used Upworks.com to hire an Argentinian interpreter to help me speak with my new leads. Then I went on Indeed.com and found someone to train me on some better video editing. My video production slowed down in the process because there is so much to learn! But it’s FUN!

Selling our Renovated and Rented Houses During Quarantine

By June though things were rolling so well that I had my best real estate sales month of my entire career. People are buying up Detroit like crazy! My real estate contacts in Detroit are telling me the same. It’s going well in the suburbs and in Detroit. The prices aren’t going down so now is a good time to BUY!

I’d love to tell you more. Call me on my cell phone because I’m not at my office again yet. I like being near my family too much. (248) 390-3982.

Molly, Lucy, Monique, and Julia at the Pink Pony on Mackinac Island in July. It was totally open!

What are the Down Sides of Buying Property in Detroit?

From my Quora Post:

The upsides outweigh the downsides for me. I’m still making money! But these are some of the issues:

Know what you are buying: We buy the houses ourselves and renovate them before we sell them so the buyer doesn’t have the issues we have. But if you are buying them for under $25k, expect they will need another $20k-ish in renovation work to get them up to code. I’m talking about the 3 bedroom bungalows here, which is our model of what we renovate.

Expect to pay the City of Detroit for your Certificate of Occupancy: In response to the Flint crisis, Detroit now has I believe the toughest lead requirements in the country. All houses have to pass a lead test, which is around $500. If you fail, to abate the lead is outrageous but I’ve never been through that because that issue arises with old windows mostly. We replace all our windows. When old wood windows slide up and down, they leave old paint dust which exposes people to lead. There is lead paint in all the Detroit houses but it’s under the new paint so it’s safe as long as your new paint doesn’t chip. Then every 3 years you need a renewal lead test which is around $375. The city test itself is pretty fair. Only $159 for two tests. It’s mostly just safety items. Detroit uses a third party to do those tests so there is a better level of customer service than working directly with Detroit.

Expect to pay the City of Detroit tickets: If your house doesn’t have the Certificate of Compliance (C of C), the ticket is $250 for no registration (which is an easy free thing to do online), $250 for no C of C and $500 for no lead test. You can get it all done before your court date and they will waive the tickets. But good luck getting the city to produce the actual C of C. They’re backlogged. The other tickets are blight tickets for things like half your alley being overgrown. The investors are targeted and the homeowners next door and behind your house have no consequences for this. Other tickets are for bulk trash in your yard, which is tough because people dump tires and mattresses and stuff and you can’t always be there to know. We got one for our garbage can being left out after trash day. You cannot find a street in Detroit without multiple cans out on every single day. So again the investors are targeted. We got another one for having a dumpster filled too high while we were doing renovation. Blight court is a half a day of lost work and no mercy and pure evil. I heard someone at blight court ask if there’s a list somewhere of what can cause a blight ticket and they were told they were only to speak when spoken to. So who knows!

Your house could be on the demolition list: This is more of a hassle than anything. There is a published demo list online but the houses don’t actually appear on it for six months. We were told once we needed to produce photos of our house if we didn’t want it demolished and appear before city council. Again, a lost day of work. My husband brought in the photos and after waiting for his turn all day they said, oops, not the same house. It must be the one next door. Other people had to prove they were working on their houses. If they do come to demolish and you miss it in the mail, you will know because they will first come to dismantle your power and water. Be careful if you’re not working on the house and it’s just sitting there. You could miss all that and come back to a vacant lot. It’s happened to people.

Furnaces get stolen out of vacant houses: We secure our houses with house sitters. They will stay in the house as soon as renovation work begins. We pay them $50/week to stay in the house dusk to dawn. It’s not a perfect system but it’s better than nothing. We’ve had new kitchens and vanities stolen as well. But furnaces are the top thing people steal. They break in a window, open a door and walk out with your furnace. They scrap the metal for the money. I don’t even think it’s much money. Or they resell the furnaces out in the suburbs to HVAC guys. Furnaces will get stolen mostly at night but we’ve experienced them being stolen in broad daylight too when our house sitter steps out. Or when a tenant moves out and doesn’t tell us. It’s usually a neighbor watching for the house to go vacant or watching for a clueless contractor whose truck says FURNACES all over it. May as well have flashing lights saying ROB THIS HOUSE!

Tools and work trucks get stolen: We know to never leave our tools in houses when we renovate. They will be stolen. The thieving neighbors are watching. The good neighbors don’t snitch. There is the attitude around here that snitches get stitches or end up in ditches. We did have our work truck stolen from a guarded Home Depot parking lot. That really hurt. We don’t use that Home Depot anymore.

Deeds to houses aren’t always good deeds: When we buy the houses we have a process we go through that costs around $600 to get the deeds marketable. So when we sell the house, it comes with a warranty deed and thus insurable. We’ve had some deeds that required quiet title. That can be anywhere from $1,500-$3,000. Meaning there was something on the deed saying someone else still had a right to the house. Like a bank that isn’t in existence anymore. We’ve had to hire a lawyer to serve the people or nonexistent bank correctly and post it correctly. Then there is a court case. The person could show up and claim ownership but it’s never happened to us. And we’ve been through maybe 10 quiet titles. I’ve heard the circumstance where someone would get to keep their house and we’re out the money is if they were in the military under cover. A lot of people sell houses in Detroit with Quitclaim deeds. Beware! But the question you want to ask is if it’s a warranty deed. Warranty deeds will be insured by the title company. Ask though for how much. The original purchase price of the house or for the price you are paying. Good to know. If they say it isn’t a warranty deed, you can make a purchase requirement that it’s made into a warranty deed before you will close. I do this and it really makes agents and title companies mad. But the nerve of them to sell me something that could require quiet title! They prefer the naive buyers.

You could be hit with huge water bills: The water department has a new policy to protect homeowners’ privacy they say. No one can look up how much the water bill is unless you have the last four digits of the homeowners’ social security number. Seems to me a nice way for the water department to get the “rich” new buyer to pay the old deadbeat owner’s water bill. The title companies can’t even get the water bill amount anymore. If you buy a house, ask for proof of the last water bill. I’ve been able to get the workers at the water department to tell me what the bill is because they know me and like me but they won’t print it off for me because it could get them in trouble. There are a few water bills too. There is the owner bill and the tenant bill. The owner bill is supposed to end in 300 and the tenant bill in 301–305. But it isn’t always that way. So you have to specifically ask if that’s an owner bill — which you could be hit with — or the tenant bill, which stays in the tenant’s name. When we sell houses I transfer the water ownership myself in my office. The water department can’t for the life of them ever do a final water meter read until months after I’ve sold the house anyway. If ever. I swear they go to the casino instead of doing the final real estate meter read. The last one I requested came back that I needed the owner’s social security number. It’s owned by a BANK! Not happening.

Lots of scammers sell these properties: We have so many sad stories of investors finding us after being so scammed. If it sounds too good to be true, maybe it is. We always ask our investors to come here and meet us. It’s a big trusting relationship. We don’t work with every investor either. You should see the property. You should get to know the person doing your renovations. It’s common to be told it will only cost one amount and you end up paying a lot more. I’ve heard of owners sending in all the money to finish the renovations only to learn the money was never put to the house. Who pocketed it? We buy the houses ourselves and renovate them ourselves and we don’t always make a profit. Some we’ve sold at a loss to ourselves because of unforeseen problems. Others we just buy and hold ourselves. Getting reliable crews to work in the city is really hard. The good ones all have jobs these days in the suburbs where their tools and trucks won’t be stolen. One investor we met had already met someone else with big promises. He chose to go with that guy. That guy told him he bought a house for only something like $9k. I find that practice a little unethical myself. The seller trusted him that his house wasn’t worth more. I’m sure the seller wasn’t provided comps for his neighborhood. This guy then told this investor it would be around $20k to renovate. Possibly true. But then the worst part was he told him he could flip it for $90k. We know that street. We flip houses there for $50k, not $90k. This big talker renovater guy doesn’t even have a property management business. He’s very green too. Not sure he knows about the city requirements. Did he think a homeowner would pay that on that street? Not a chance. The homeowners are buying the $25k houses and whittling away at the renovations. If it’s rented, there’s no ROI left to be attractive to an investor on a $90k house especially when they can buy them for $50k. So this one bothers me. Gives Detroit a bad name. And of course my ego is bruised that this investor didn’t choose me.

Buying turnkey (renovated and rented) isn’t necessarily the answer: People have told us they did that only to learn the house was really only partially renovated. It’s hard to view the inside of a turnkey property because tenants get scared about showing it. They’ve been scammed so many times by landlords and property managers claiming to be the one to whom they pay the rent, only to find out it’s someone else and then they end up with an eviction on their record. So to get inside a rented house is tough. If you do get in, that tenant may start looking for a new place to rent as soon as you walk out the door because they think something fishy is going on. Solution to this one is to get referrals from other investors who bought from that property management company. I don’t actually allow investors in to my rented houses for the above reasons. Our houses are pretty cookie cutter. I’ll show them a few other houses we’re working on and they can see my Youtube channel of house tours on move in day. They’re all pretty much the same.

But isn’t it about the money? If you’re making a good return on investment, then these things are manageable. I think knowing what to expect helps. When investors call me and don’t ask me worst case scenarios, I just tell them anyway. I don’t want to work with someone naive to Detroit’s issues. They thank me! Other things with buying a turnkey house could be a bedbug or cockroach problem. That can take three months of no rent. One month before the people move without paying, another month of treatment, another month of killing off the newly hatched eggs. Or Section 8. It takes them 1–3 months before the payments are initiated. Ouch! But they pay back to the move in date so that’s good. Turning over a house can be costly because tenants can be rough no matter how tough my screening is. Expect a good $1,200 between tenants. Tenants don’t come out in the snow to view houses. So that can be an issue. Unless they have Section 8 and they’re on a time restriction to find a new place. I’m grateful for them in the winter! It’s all still a good investment though. I know because our investors keep buying more. And I still have my own properties generating a nice income for us. Two of my 10 tenants have been there since 2008. I like those ones!!!

Confessions of a Landlord - Intro - Landlord Edition

I’ve taken the plunge into YouTube fame and glory! Not really all that. But I finally did decide to launch an idea that I’ve been diligently working on in my head for longer than I care to admit.

CONFESSIONS!

The leads who call me who are interested in investing in Detroit always say they appreciate my transparency in my website. I seem to know what I’m doing. The thought I have when they tell me that is, “Well, if they only knew what it took to get here!” I’ve made some doozie mistakes and some crazy decisions that actually worked. But I like to say mistakes are just another form of paying tuition.

When people call me and tell me that they’ve watched my YouTube videos, CONFESSION….I CRINGE! They’re so boring. They say they feel like they know me and it’s actually me. It really is! But I could be better, I’ve decided. And vlogging seems to be the answer.

So I’ve given myself the challenge of laying it all out there. Just going for it. I’m going to make videos with NO MAKE UP. Confession — I rarely wear makeup anyway. I’m going to use my cell phone. I’m going to vlog in my car or wherever else I’m inspired. I’m going vlog it as I think of it. My kids told me I need to be a vlogger and that’s what vloggers do and it’s okay, Mom! Yikes.

My Mission

Why? Well, I’m going to do a service. Confession: When I started as a landlord, I knew nothing. But I read books and I attended Real Estate Investors Association of Oakland County meetings and asked questions and used my husband’s amazing common sense with my creativity and natural risk taking tendencies and figured it out. I even took a class on property management that is part of earning a broker’s license. I learned nothing there that applied to real life.

I sure could have saved some “tuition” though if I had the videos that I’m about to make. So I hope to save some landlords. Some people save the whales…me, the landlords!

Here is my intro video. I just did it. Then I learned I was supposed to hold my phone horizontally. Then I had to figure out iMovie and then how to get it to my YouTube channel. Then I started watching videos on being better at this and I’m basically overwhelmed and that’s enough for today. Thank goodness we all have YouTube now.

I hope you find good content on my channel and see fit to subscribe.

Confession: Now that I wrote this, I can’t back out! I’m in. I feel like I just jumped out of a plane and hope I can find the parachute!

My Favorite Eviction Horror Story

Once upon a time not too long ago there was a little family in a little house on a little (desirable) street in Detroit.  In it lived an aunt, a mother and an adult son.  

The son, we'll call him Sam, served our country in the Vietnam War.  Unfortunately, he was injured and is now using a walker.  He came home to his little house in Detroit and settled in the living room.  At some point the aunt and the mother passed away.  But he didn't much leave the living room.

Sam had the good fortune of a house to live in.  A house with no mortgage.  All he had to do was pay the taxes.  He did not pay the taxes.  Wayne County sent him many letters suggesting he get on a payment plan.  

He did not get on a payment plan.  

Then they posted on his door that he was about to lose the house.  Come get on a payment plan.  

He did not get on a payment plan.  

The house was up for auction in 2016.  We drove by and saw a lovely home on one of the prettiest streets and decided to buy it.  

Our daughter Molly house shopping with Pat.

Then we met Sam.  He was in the living room.  We told Sam he could stay for free until we were ready to work on the house, but then he would have to move.  Sam stayed for free until renovation time.

But then Sam wouldn't move.  Sam wouldn't even pay us ANYTHING to stay.  We had to evict Sam.  We felt like jerks evicting a war vet.

EVICTION DAY

Sam knew it was coming.  But Sam did not prepare.  The bailiff offered to arrange for him containers to move to a storage unit.  Sam said no.  

The Bailiff said he'd better gather his most precious belongings then because it's time.  Sam got up and grabbed his garbage bag full of marijuana.  

Then the bailiff called the Veteran's Association and was able to find Sam lodging with medical care.  

It took us SEVEN dumpsters to empty the house.  All his mother's and aunt's belongings were everywhere and covered in dust.  

In the end Sam thanked my husband and told him it was time for a fresh start.  

And now we have a beautiful house in our portfolio.  

Sorry, Sam.  

Thank you, Sam.  

How I Stuck My Foot in my Mouth with this Future Tenant's Mother in Detroit

This is what I saw coming down this street in the City of Detroit to do a home visit for a new tenant who was living with her mother.  I always like to see how they live before I let them live in one of my own Detroit investment properties.  

And on the other side of the street, I saw this.

I was starting to worry, but then I saw where this tenant was living with her mother and my heart sang!  Yes!  She cares about her house and she actually takes care of her flowers.  Not that the daughter will, but hopefully this apple doesn't fall far from the tree.

I felt so much compassion for this family who lived on a street full of abandoned houses and an abandoned apartment building.  They were literally the last house standing.  

Then I started feeling really good about myself that I was able to move this adult daughter from this horrible area into one of our thriving neighborhoods where all the lawns are kept and there are people for neighbors, not rats and packs of dogs and thugs who must hide out in these houses.  

The more I thought about it, the more I decided I'd better not tell my husband what a scary neighborhood I just put myself in today!  

That's when I opened my big mouth and I said to the mother how she must feel great that her daughter is moving to our house and getting away from here.  "I mean, gosh, these houses are all abandoned.  You must live in perpetual fear."

The mother looked at me and patted my shaking knee and said, "Oh, honey, not at all.  It's never been so peaceful in all my life.  I'm so proud to be the last house standing on this block."  

When you hear Detroit described as a city full of people with GRIT, that right there is WHY!

And I'm sorry to report, the daughter has none of her mother's green thumb.  But the grass is at least cut!

If you're looking for a property manager who speaks her mind, for better or worse, you found her!  Give me a call and I will let you know the value of investing in Detroit.  248-390-3982.

Do NOT Buy This Cheap House in Detroit!

You have this great idea.  You hear Detroit is the Come Back City.  It's out of bankruptcy, people are moving back to town, more of the tech industry is moving in...naturally it is time to buy these cheap houses!  All you need to do is call a real estate agent, find yourself some trusted renovators, then find a property management company that works in Detroit.  How hard could it be?

Lemme tell ya just how hard all of that is!  (But it's okay, I have solutions too.)

1. Choosing the location.  If you look on Google earth and see the rest of the street you may not see that the house just to the left of it is gorgeous and well maintained, but the rest of the street is abandoned and it's surrounded by abandoned businesses.  Do you even know what year that Google image was taken?  No!  Solution:  You need a local person who drives the city regularly who knows where the thriving, desirable pockets of Detroit are.  Sorry, there won't be houses for $1,000 there either, but still the prices will give you a good ROI. We know where these places are.

2. Choosing your Real Estate Agent.  We agents make our money off commissions.  We get commissions when you hurry up and buy it. Our famous line is, "All it needs is a little paint and it's move-in ready."  Solution:  You need the agent who is also in charge of the renovating and tenant placement and keeping the buyer happy for the long term benefit of a good ROI on his investment.  I'm not after the piddly commission.  I'm looking toward the future because I think like an investor because I am an investor too.  

3. Finding your renovator.  Have you heard of the woes of those contractors who don't show up once they have their deposit or if they do, they sure don't do the job you thought they were going to do, but then they follow it up with a bill you sure didn't expect? That's typical anywhere.  Solution:  Don't even deal with THAT mess.  Buy the house once it's already renovated.  No big surprises that way.  How did I solve the contractor blues?  My head contractor is my husband.  He's in it too for the final ROI for the investors.  What is good for our investors is good for us. 

4. Finding the property management company that isn't going to rip you off.  A favorite tactic of property management companies is to bill you A LOT for maintenance.  Or to place the first rental applicant that comes through the door without doing appropriate background research.  Solution:  Our company believes in transparency.  We show you maintenance receipts and photographs.  And our backgrounding checking is extensive.  We want long term tenants.  We want the tenants who will give YOU the best ROI.  We won't even sell you the house unless the tenants have proven themselves to keep the house up and pay rent timely for three months.  

What kind of ROI you wonder?  It is anywhere from 12-18%.  Better than that 401k you have, isn't it?  We make every day a great day with that ROI!  That's why we are Great Day Property Management.  

Give me a call for more details.  I love talking shop!  248-390-3982.