Minneapolis Revokes landlords 42 rental licenses

Rashad K.
Flipper/Rehabber · Saint Paul, MN · Member since 2016 · 120 posts · 98 votes
8y
Josh Dillingham im surprised they used the owners first and last name. Thanks for sharing
1 Reply
Tim SwierczekPro Member
Lender · White Bear Township, MN · Member since 2016 · 1k+ posts · 1k+ votes
8y
@Josh Dillingham Nice find.
1 Reply
Jordan MoorheadBusiness Member
Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
8y
I actually know the judge that initially tried to pull his licenses. All of his stuff is in north and would probably need a bit of work but could be great deals for somebody!
[email protected]512-888-9122
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1 Reply
Jordan MoorheadBusiness Member
Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
8y
There’s still a lot of opportunity with section 8 rentals in North Minneapolis. People are making good returns by going into old properties and fixing them up/adding bedrooms.
[email protected]512-888-9122
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0 Reply
Anthony GaydenPro Member
Rental Property Investor · Omaha, NE · Member since 2014 · 2k+ posts · 3k+ votes
8y
@Josh Dillingham @Jordan Moorhead
I just don't get it. Why would this guy not just do the bare minimum amount of repairs to get the city off his back?
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2 Reply
Josh Dillingham
OP
Rental Property Investor · Brattleboro, VT · Member since 2015 · 204 posts · 174 votes
8y
@Anthony Gayden Good question, seems a lot cheaper than appealing all the way to the supreme court...
1 Reply
Matt K.
Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
8y
Originally posted by @Anthony Gayden:

@Josh Dillingham @Jordan Moorhead
I just don't get it. Why would this guy not just do the bare minimum amount of repairs to get the city off his back?
Because it probably would "cost" him more to do that then being a slumlord. I'm assuming the citations probably have fines attached....
1 Reply
Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
8y
The tenant they interviewed says her house is infested with rats, mice and cockroaches. In a single family home, pest control is usually a tenants responsibility. Or she could withhold a couple hundred bucks from rent to pay an exterminator. A judge in Minneapolis isn't going to evict her if it was the landlords responsibility. The lady also claims to have fallen down the stairs and that there is no railing, but the photo directly below shows a railing.
I don't like slumlords, but let's all agree there may be more to this story. Like who knows how many of these people are even paying rent at this point.
2 Reply
Josh Dillingham
OP
Rental Property Investor · Brattleboro, VT · Member since 2015 · 204 posts · 174 votes
8y
Originally posted by @Joe Splitrock:

The tenant they interviewed says her house is infested with rats, mice and cockroaches. In a single family home, pest control is usually a tenants responsibility. Or she could withhold a couple hundred bucks from rent to pay an exterminator. A judge in Minneapolis isn't going to evict her if it was the landlords responsibility. The lady also claims to have fallen down the stairs and that there is no railing, but the photo directly below shows a railing.
I don't like slumlords, but let's all agree there may be more to this story. Like who knows how many of these people are even paying rent at this point.
this article diffentely slants towards the whole "big bad landlord" angle, I like where it says "a landlord once tried to evict her for not paying rent." instead of saying "she has been evicted in the past for not paying rent." That being said, the fact that the city has issued over 1000 citations on his 42 properties tells me he's not exactly Landlord of the year.
3 Reply
Raul R.
Rental Property Investor · New York City, NY · Member since 2017 · 493 posts · 386 votes
8y
Interesting story, I didn’t know a “rental license” existed. Can someone explain how a “rental license “ works in Minneapolis? Is it required to rent to Section 8 or are all Landlords require to have a “rental license” in Minneapolis for each property?
1 Reply
Tim SwierczekPro Member
Lender · White Bear Township, MN · Member since 2016 · 1k+ posts · 1k+ votes
8y
@Raul R. all non-owner occupied rentals in Minneapolis require a license the day they are offered for rent (advertised). The fines for operating without a license are high. I think they are $1,000 but no positive. There is an application fee which is higher on an SFR than a multiunit. The home is inspected for code compliance in the first year and then tired. The top tier is only inspected every 7 years after that, and other tiers are inspected more often.
3 Reply
Tim SwierczekPro Member
Lender · White Bear Township, MN · Member since 2016 · 1k+ posts · 1k+ votes
8y
@Joe Splitrock Pests are rarely a tenant issue in Minnesota. The state would consider the tenant responsible if the LL can show the pests were brought in by the tenant intentionally, maliciously, or through irresponsible conduct. General court president is that simply bringing in the pests is not enough to trigger the tenant's responsibility, the LL must show the tenant was irresponsible by bringing in furniture from a previously infested apartment without first taking any remedial steps. This is damn hard to prove, and so this landlord would be considered responsible.
The law that would be cited is https://www.revisor.mn.gov/statutes/?id=504B.161 subsection (4)
2 Reply
Bruce Runn
Investor · Minneapolis, MN · Member since 2014 · 743 posts · 927 votes
8y
@Josh Dillingham
@Jordan Moorhead
I personally wouldn't touch any of Khan's properties. You have to realize to get to this point, neglect has been going on for years/decades. You end up really poor conditions that are tough/expensive to remedy in a very rough area.
4 Reply
Rashad K.
Flipper/Rehabber · Saint Paul, MN · Member since 2016 · 120 posts · 98 votes
8y
Just knocked at his door. He wasn't happy
3 Reply
Terry Miller
Akron, OH · Member since 2015 · 178 posts · 189 votes
8y
Originally posted by @Rashad K.:

Just knocked at his door. He wasn't happy
The Wrath of Khan.
6 Reply
Account Closed
Rental Property Investor · MN · Member since 2015 · 186 posts · 149 votes
8y
Not interested in Section 8 or North Mpls :)
1 Reply
Cara Lonsdale
Realtor and Investor · Scottsdale, AZ · Member since 2017 · 1k+ posts · 1k+ votes
8y
I had no idea that MN required rental licenses. GOOD TO KNOW! I was looking at properties there. Is that something that is required for neighboring states too, or just MN? Is this something you would just know, or would you be told this in escrow?? I am curious.
1 Reply
Bruce Runn
Investor · Minneapolis, MN · Member since 2014 · 743 posts · 927 votes
8y
@Cara Lonsdale
Every state has statutes you can look up and rental licenses are typically city specific as that is how they are enforced. In Minneapolist/St Paul, a MF property will already have a rental license in place if it's legit and you can pull it up online to confirm. In Minneapolis, there are 3 tiers of licenses based on the citations/problems so you also pay a higher fee for more issues. You should only look at Tier 1 or possibly tier 2 if the corrections are easy. If you didn't know this, no one would be telling you at closing. There is a one time$500 fee for conversion of rental license, $1,000 if it does not have a rental license and typically $75 minimum for yearly renewel for a duplex with fees going higher with each additional unit. This is one of the mechanisms that prevents illegal units from existing or being added so be careful when you see "illegal unit in basement" ect as you could lose that income if it's illegal.
0 Reply
John Woodrich
Flipper/Rehabber · Minneapolis, MN · Member since 2016 · 1k+ posts · 1k+ votes
8y
Originally posted by @Cara Lonsdale:

I had no idea that MN required rental licenses. GOOD TO KNOW! I was looking at properties there. Is that something that is required for neighboring states too, or just MN? Is this something you would just know, or would you be told this in escrow?? I am curious.
Most cities i MN require rental licenses but not all cities.
0 Reply
Todd Dexheimer
Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
8y
Originally posted by @Anthony Gayden:

@Josh Dillingham @Jordan Moorhead
I just don't get it. Why would this guy not just do the bare minimum amount of repairs to get the city off his back?
The city of Minneapolis can get expensive quickly. If you have a code violation house, it can cost $373/year, plus doing the repairs and paying re-inspection fees, which can easily be $200-$300. If you do those repairs and they find something else you then have to pay $373/year again and have a re-inspection. Once you pass, then you be inspected each year and if one violation is found you're stuck. If you have outside complaints, that could start adding up (Long grass, trash, weeds in the alley, peeling paint, etc). I had a property that was 3 blocks from a convenient store and racked up all kinds of fines for trash. We would get a letter warning us and literally at 8am the day of the inspection, check over the entire property for trash and we would still get a $220 fine. Finally we just accepted that we would end up paying 3-4 fines/year.
My guess is this just started to snowball on this guy and now he has a grudge against Minneapolis. The properties are mostly in rough areas, so fixing issues can be tough if you fix it and the tenant causes another issue.
2 Reply
Amber Gonion
Real Estate Broker · Hugo, MN · Member since 2016 · 688 posts · 596 votes
8y
Good points Todd Dexheimer when we evaluate mpls properties they need to be especially good because of factors like these that are not as bad in suburban cities. That combined with the uncertainty of what the Mpls council will do next. North/South you have gangs and shootings and even at the U street crime is now common (my stepson goes there now and sees groups of 10–15 kids running up and stealing bikes, robberies, etc) that combined with all the new student housing that has gone up and still has low occupancy makes us weary of long term investment in that area. Uptown, far North, far South, and NE are still in play, but with Mpls they have some risk and need to have a premium factored in.
2 Reply

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