Michael Rossi's Landlording Blog

I took the day off today, at least as far as the rental property business is concerned. However, I did still have a personal real estate project to do. To make a long story short, my wife's family is selling a house they inherited and somehow I got picked to do a few maintenance items at the house. To accomplish that job, I needed to pick up a few things from my storage room at the Pink Elephant. I got the things out I needed and started to cut a 2 X 6 right there on the sidewalk. I'm always aware of my surroundings when I work in low income areas (and everywhere else for that matter) and therefore I certainly took notice when a very rough looking man approached me. He had a cast on his left arm and his right forearm had MANY noticable cuts. I stopped working and asked him what I could do for him. His answer was unique to say the least. He said he wanted me to call someone to pick him up. That's not too uncommon in low income areas. Many times in the past, homeless people have asked me to call someone for them because they don't have a phone. I'm normally willing to make a quick call for them, provided I have the time. I thought that was what he wanted and I asked who he wanted me to call. His answer was that he was "thinking of committing homicide and suicide" and he wanted me to call the police. Well, that definitely got my attention! I didn't see a gun or knife and he hadn't threatened me directly, but I felt like I needed to have a few feet of separation from this guy and I definitely needed to keep him in front of me for tactical reasons. I directed him to sit down on the porch and told him that I would call the police. As soon as he sat down, I dialed the police and explained the situation to them. The said they would send an officer.

As we waited, I talked to the guy. As it turns out he was a mental health patient who is homeless and hasn't taken his medication for about 2 months. He apparently got into a fight with someone who accused him of stealing drugs and that person broke his arm. That occurred recently, although he told me different stories about when. He claimed that his wife cut his other arm, but from the shear number of cuts and the look of them, I'd bet that these were self-inflicted razor blade wounds.

About 10 minutes later, the police arrived. They talked to the man for a few minutes and it seemed like they were just going to leave. The man told them that he thought he might kill someone and burn down the guy's house that broke his arm. I wasn't too keen on him being released without getting some help. I pushed the idea of taking the guy to the hospital for a mental health evaluation and after radioing the station for permission, the police decided to do that. They searched the guy for drugs and weapons and put him in the cruiser to take him to the hospital.

Very strange encounter for a day off and just one more reason to always be armed!

I spent a little time today working on my 2008 taxes. OK, I admit that I've procrastinated a little in getting them done. Anyway, something really impressed me as I was working on one of my rental property businesses. This particular business has about 10 rentals in it and I was entering the data into Quickbooks Pro. As I entered all the income and expense data, it became rapidly apparent that my expenses for this business were very low. I had very low maintenance; hardly any vacancies; no lawsuits; no legal expenses; no evictions; etc. Although I haven't quite completed entering the data and I don't have the exact numbers yet, I'll certainly have expenses WELL below 50% of the gross rents.

The big question is what does that tell us? Am I a genius at the rental property business? Have I discovered some secret to success? Am I smarter than other landlords? Do I live in the best rental market on the planet? The answer is that this data tells me NOTHING! It's completely insignificant and irrelevant. I'm not a genius. I haven't discovered the secret to success. I'm not smarter than other successful landlords. I don't live in the best rental market on the planet.

A sample size of 10 rentals over one year is statistically insignificant. The data tells me absolutely nothing about my long term operating expenses. It doesn't even tell me about the operating expenses in my local area over the past year. Trying to conclude anything from this data would be foolish at best and financial suicide at worst (if I were to assume those expenses were correct for the purpose of evaluating future deals).

Once I finish the taxes on all my companies and print out the financial reports, I'll post the results on my blog. We'll see if there is any useful information that can be derived from my several dozen rentals.

One of the things that is significant is the paydown of principal over time. As I was entering the data this morning, I noticed that I'm paying down about $1,000 per month on principal on one of the loans. Picking up $12,000 per year in equity on just that one loan is significant! I'm looking forward to seeing what the principal paydown is on all my loans! I can't eat that equity, but it sure does feel good to watch it build up.

After doing the paperwork, I felt like getting out of the house, so I went down to the Pink Elephant to do some painting. I actually got quite a lot done in a short period of time.

I finally got back to painting the Pink Elephant today. It was a beautiful day, although blazing hot, and I spent about 3 1/2 hours doing some painting. In addition to the painting, I had to stop by the insurance agency to sign paperwork for a renewal of one of my rental policies. I also fixed a leaking sink trap.

That was about it - all in all a pretty routine day.

This weekend was another 3 day weekend! I did work about 2 hours Friday morning in order to completely catch up with the last maintenance tasks on my list. Those projects included fixing a leaking toilet (replacing the flapper valve and tightening the hold-down bolts), spraying weeds, and taking mouse traps to a tenant (and giving her a lecture about cleanliness).

After my two hours of work, I took the rest of the day off. My wife and I spent some time having fun and doing some things around the house.

On Saturday, we went to the gun show at Vets Memorial in Columbus. I didn't buy any more guns, but I did get some ammo. As most people know, thanks to our President, ammo is in very short supply. I have a compact .32 cal auto handgun that I carry when I need a small gun - like riding my bike. Ammo for it is nearly impossible to find. I've searched all the gun shops and no-one has had any for months. I found some (that was manufactured in the former communist block) at the gun show and bought several hundred rounds. I also found some 7.62 X 39 mm ammo that was made in Russia and bought half a case. Finally, I found some JHP (Jacketed Hollow Point) self-defense ammo for my Beretta carry gun and bought some of that! A very successful journey.

With the way the country is rapidly deteriorating, I consider ammo to be as vital as an emergency food and water supply. Our economy is on the brink of disaster with debt that is crushing the country and ANY spark could easily throw us into chaos. It's happened many times throughout history and it's smart to be prepared. By the way, this isn't just crazy talk, the United States government has spent millions of dollars to tell YOU to be prepared. Here's a link to the government website: http://www.ready.gov/america/npm09/getakit.html Guns and ammo are not politically correct and are therefore not on the list.

After the gun show, we went to the shooting range for a little practice and fun. My wife got a chance to shoot my .40 Beretta, which was fun. She's a very good shot, but the kick almost lifted her off the ground, which was entertaining.

Of course, I took today off also and we had some family over to swim in the pool! It was a beautiful day - perfect for swimming. We followed that up with a cookout. All in all - a very good weekend.

If you are wondering what happened to yesterday's blog, my wife and I went out with friends for an afternoon and evening of fun and I didn't get home until late - too late to post my blog. So, let's catch up now!

Yesterday started at about 9 am with the posting of an eviction notice for a tenant at the Pink Elephant. My next stop was in municipal court at 9:30. This was my "second cause of action" (lawsuit) against the tenant I evicted last month. She really pissed me off, so I sued her for everything I could possibly think of! All together, I am claiming about $2,000 in damages which includes lost rent, late fees, physical damage, etc. In reality, I have already won the lawsuit via a default judgment because the tenant didn't respond to my lawsuit in the designated time (idiot). However, a hearing before the magistrate is still required to justify the amount of the judgment. The tenant didn't show up at this hearing, which was all the better for me!

You may recall from my original post on this eviction, that I have a new lawyer. She is inexperienced in evictions, but did a very nice job at the original eviction hearing. Unfortunately, there was a little paperwork snafu at the hearing yesterday, when my lawyer hadn't filed the proper amendment to the complaint, which should have included the final amount of damages we are seeking. This amendment required a proper service on the tenant and obviously that hadn't happened. The result of this mistake was that the magistrate could only award me a little over $700 in damages yesterday. So, we elected to continue the case for another 30 days so that my lawyer could amend the paperwork. When we go back to court, I can be awarded the entire amount of the damages. No big deal!

Next on the agenda were two Section 8 inspections. The first one was at about 11:30 and I passed it with flying colors. The next one happened at about 1:30 and it also easily passed! It doesn't get better than that!

As soon as the second inspection was complete, I was ready to quit for the day and I headed home. My wife and I decided to have some fun and we met another couple for an afternoon and evening out on the town!

My projects today included repairing the ceiling in an apartment and replacing a defective ceiling light. That took about 3 hours and that was enough for today. I had a few things I wanted to do around my home today, so I spent most of the day doing personal (non-work) stuff. I'll be mowing grass tomorrow and am thinking about going shooting.