Seeking Advice Regarding Shootings

Account Closed · 2022-01-28T22:50:57-08:00

Hey BP, First time posting here. I have a rental in North Minneapolis and am wanting to get some advice from more experienced landlords as I have only been doing this a few months. I had a family move into the unit recently. They were excited since it’s a pretty nice house (upscale finishes and close to $2k rent) but the issue is that it’s in a not so nice area. The second day after their move-in there was a drive by shooting and a stray bullet penetrated a window and damaged their furniture (thankfully nobody was hurt). I had an expensive repair since the triple pane window glass had to be replaced and siding damage had to be fixed as well. Since this happened I’ve been nervous about it happening again but I tell myself that it is unlikely.Fast forward to earlier this week. I saw several missed calls and a text from the tenants saying the house was shot again. Turns out two bullets penetrated a window frame and damaged their TV and stand. They are upset (as am I) and said they are unsure if they’ll be able to stay and pay rent while replacing all the damaged things from the shootings and that they can’t keep having the house getting shot at and replacing things. I told them I would waive late fees this month if they needed more time. I realize this is outside of my control and I’ve previously done a couple of things to boost security (fenced in the yard, installed cameras and signs, etc.). Now I am trying to find a handyman willing to fix the window frame. It took me a while to find someone willing to go to the area and they refuse to go back since they saw an unsecured handgun in the house while kids were there. I keep getting rejected by contractors - more than one has called the area a “hood” or “ghetto” and is unwilling to travel there since they would not feel safe. My question is: what would you do in a similar situation? This all happened within a few weeks. Needless to say it’s been creating a lot of unnecessary stress. I’ve only had the property for about 9 months so far. I only put 5% down so don’t have much equity built up to consider selling and entering a higher property class area. - R.E.

Bruce WoodruffPro Member

Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes

4y

You may not want to hear this, but I would dump that house as fast as you could. Don't worry about losing money, this type of house can cost you far more if you keep it. And that doesn't include all the stress and hassles you will have to put up with for years, if not forever.

7 Reply

Scott M.

Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes

4y

Sell. No one needs this kind of stress.

4 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

4y

dont buy rentals solely because they look good on paper.. many that look good on paper are priced that way for these exact reasons.. first thing about real estate is not cash flow Its location location location.

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15 Reply

Bud Gaffney

Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes

4y

Sell ASAP and move on. Good luck! Don't get too discouraged. You'll do better on the next 1.

3 Reply

Tim SwierczekPro Member

Lender · White Bear Township, MN · Member since 2016 · 1k+ posts · 1k+ votes

4y

@Account Closed Off-topic but there is no such thing as an investment property loan for only 5% down. This post makes it seem as though you don't live there. If you do live there are you concerned for your safety? If it were me, I'd find a way to sell as soon as you can get out of this property.

5 Reply

Karl B.

Rental Property Investor · Erie, PA · Member since 2015 · 1k+ posts · 2k+ votes

4y

I dealt with a few drive-bys where I live in COMO. If you're going to keep the place and you already have security cameras....

-Contact the police and have a relationship with them. Tell them they can access your camera footage for anything and they'll also likely give you info. For instance, my tenant dealt with the officer who told us that these drive-bys were due to a renter's boyfriend who was doing shady things and so I....

-Contacted the property manager to the targeted property. Unfortunately, the PM was an idiot who only cared about the check and didn't do anything about it. The tenant finally moved (she was probably tired of her bf being targeted and the place getting shot up) and it has been quiet ever since, but I wish I would have been more responsive to somehow get them out quicker (such as speak with the owner of the property, which I didn't).

Had they not moved I would have looked into legal recourse against the PM company and the owner of the property (you would think the owner would have been tired of their house being shot up but apparently not).

Definitely get the other neighbors involved. There's a reason some thug is shooting up a house and I'm assuming they're not shooting at your property on purpose but definitely speak with the police to learn more.

5 Reply

Scott Mac

Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes

4y

Hi NA,

Maybe the local Vigilante justice squad is sending a warning to one of your new renters or one of their visitors.

Maybe they are shooting at a neighbors house and your rental is getting mis-aimed rounds.

I'd assume step 2 (if the warning doesn't work) for this Vigilante squad would be to (try to) shoot the offender to death vs shooting at a SFH.

Maybe then they will stop shooting at the house.

They were not shooting at the SFH while you were installing triple pain windows and superior finishes (btw did you catch the lake reference I worked in, re Minn.).

If they stop shooting at the house you have a $2k a month Hood Rental.

If you keep it you might want to think about investing in some Mil Grade Body Armor and get ready to do the repairs yourself.

Good Luck!

0 Reply

Alex F.

Investor · Plymouth, MN · Member since 2020 · 157 posts · 102 votes

4y

Best of luck with the property. I do think things will turn around. I had a similar discussion with a college that owns one rental duplex in the 'hood'. We are going to a low right now with poor police morale, lack of resources, the trial of the 3 officers going on, etc, etc.......

Make sure you have a ring camera in the house at a minimum......

0 Reply

James Duffy

Investor · Minneapolis, MN · Member since 2021 · 12 posts · 4 votes

4y

I have owned duplexes in North Minneapolis and that can be a very high maintenance tenant base, but what you are describing is next level. I sold the duplexes after a couple years and personally won't invest in North Minneapolis anymore because of the challenges. I'm sure it is tougher now than it was before because of the spike in crime in the last couple years. There are some investors who do well in that area. If you want to try to keep the property, you might try to connect with an investor who has properties in the area and get some advice or referrals to contractors the (or they may be an option for disposing of the property). How would you find those investors? I would try MNREIA or maybe call on some rental ads for similar properties in the area. Best of luck

1 Reply

David Dachtera

Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes

4y

@Account Closed,

Until municipalities start cleaning up the street gangs and come out of denial about the gang wars costing dozens of lives weekly in Chicago alone, all owners and landlords can do is repair the damage, look for ways recoup their investment and move on.

My $0.02 ...

1 Reply

Mark Cruse

Investor · Fort Washington, MD · Member since 2014 · 1k+ posts · 1k+ votes

4y

I know nothing about North Minneapolis but based on what you have explained it sounds unworkable. If your tenants are not dealers or running a trap house, two drive bys, randomly hitting the same home in that amount of time sounds like the kind of community that will not allow you to generate profit. I have invested in very violent and low income communities for the majority of my time but some just will not work. The only people willing to live in places like that will be people who will present all kinds of problems and challenges themselves. If they are not that type, they will leave soon. You may have people breaking the lease every few months causing you extensive turnover costs, high dollar maintenance and tons of other things. You could have long spats of no one living there. As many of the experienced people here have already stated; dump it. It's very possible this can be an extensive liability to you over the next few years draining your pockets. I recently was dealing with this in Curtis Bay Baltimore. It was doable for years but the neighborhood dropped much lower recently. My tenant broke the lease but now I realized how much of a favor they did me. I decided to sell and it did right in time. I would not have sold if that hadnt happened. When I put it on the market is when I discovered the entire block has been taken over by drug dealers. This property has been a loser for me for the past 3 years and had kept it, I would have even more devastating loses and this place has never been shot up. Those types of things sound damn good on paper but there is a reason for that in a lot of cases so you have to understand what you are getting into!

2 Reply

Alexander FelicePro Member

Guy with Great Hair · Austin, TX · Member since 2013 · 2k+ posts · 4k+ votes

4y

SELL IT, and sell it fast

This property may have looked good on paper, but reality works differently.

One of the lessons that took me the longest to learn in RE was that higher quality properties that "make less money" are actually the ones that make the most money and are the easiest to deal with.

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3 Reply

Joe Martella

Rental Property Investor · Cherry Hill, NJ · Member since 2015 · 626 posts · 495 votes

4y

If you aren't interested in selling the property, then I would consider hiring a local property manager that knows the area. Maybe they can tell you why your house is being shot at if they know the neighborhood well. Like an earlier post said, it wasn't being shot before these people moved in.

The only way you would know is if they leave and new people move in and the issues go away.

Put high end cameras up facing the street along with bright motion lights that go on every time a car heads down the street to ensure you get a good picture. Put signage up letting people know that there are cameras. Maybe that deters the shootings as well as other unwanted activity. Work with the local Police Department and see if they can do anything to help you (increased patrols, advice, etc...). Cutting your losses is one thing. This may help you turn your investment around.

I would let a PM get a new tenant in there.

1 Reply

Jim K.

Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes

4y

Sell the house and GTFO. This is an absolutely perfect example why you should never invest in D-class, as @Jay Hinrichs said, HOWEVER GOOD THEY LOOK ON PAPER. Only warlords make money in warzones. It may be a pocket warzone in an otherwise quiet neighborhood, we have a couple of those in my low-C class target area. You're just not going to make money in your rental, however upscale you finish it. Cameras are great, fences are great, security lights are great, but you can't turn a neighborhood like that around with them unless you buy the whole block and put a wall around it. The clearest dividing line between C and D is always going to be violence.

4 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

4y

Originally posted by @Mark Cruse:

I know nothing about North Minneapolis but based on what you have explained it sounds unworkable. If your tenants are not dealers or running a trap house, two drive bys, randomly hitting the same home in that amount of time sounds like the kind of community that will not allow you to generate profit. I have invested in very violent and low income communities for the majority of my time but some just will not work. The only people willing to live in places like that will be people who will present all kinds of problems and challenges themselves. If they are not that type, they will leave soon. You may have people breaking the lease every few months causing you extensive turnover costs, high dollar maintenance and tons of other things. You could have long spats of no one living there. As many of the experienced people here have already stated; dump it. It's very possible this can be an extensive liability to you over the next few years draining your pockets. I recently was dealing with this in Curtis Bay Baltimore. It was doable for years but the neighborhood dropped much lower recently. My tenant broke the lease but now I realized how much of a favor they did me. I decided to sell and it did right in time. I would not have sold if that hadnt happened. When I put it on the market is when I discovered the entire block has been taken over by drug dealers. This property has been a loser for me for the past 3 years and had kept it, I would have even more devastating loses and this place has never been shot up. Those types of things sound damn good on paper but there is a reason for that in a lot of cases so you have to understand what you are getting into!

Mark what is a trap house ???

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1 Reply

Steve K.

Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes

4y

@NA Basor we bought a building 5 years ago where in the first few months of ownership we had not only one but TWO abductions, a fatal stabbing, a domestic violence incident, and a slip and fall on ice that caused a broken hip/ lawsuit that we lost. I remodeled one of the kitchens and soon after the sewer line collapsed under that very room so I had to pull out the new cabinets I had just installed, rip up the new floor I had just put down, jack hammer 5 feet into the slab, and replace a drain line that was infested with sludge worms who live in sewers eating human waste and never see daylight their whole lives and are absolutely revolting (I had to look up what they were). 5 years later theres a coffee shop on the same block whose owner is not only a two-time Brewer’s Cup champion but also a Q Grader (a prestigious certification akin to that of a Master Sommelier, (I had to look that up too). He’s charging $18 for a single cup of coffee (Panama Geisha, I also had to look that up). Rents have doubled there, no more section 8 now we get applications from well-to-do young professionals and students. Property value is nearly double as well. My point is that A: I feel your pain. B: This will be a good story to tell someday and C: It could all be worth it in the end if the location is good. However, if the surrounding area is not improving/ you don’t expect gentrification to make its way there anytime soon, then I don’t see the point in holding this property as you will not be able to change the character of the neighborhood.

3 Reply

Mark Cruse

Investor · Fort Washington, MD · Member since 2014 · 1k+ posts · 1k+ votes

4y

@Jay Hinrichs I'ts the neighborhood drug house where the dealer does business and addicts hang out to get high or engage in several other illegal activities (i.e prostitution, kidnapping, stashing). In several instances they are abandoned buildings or a low income rental unit (in a low income area) where anything goes! There are just too many opportunities for things to go wrong with this one. Unless there is some form of gentrification coming it may be a money pit and when vacant may turn to a trap house. Once they buy a new HVAC or appliances they are all moved out of the back door for sale in hours!

3 Reply

Brandon Hicks

Investor · Avilla, IN · Member since 2013 · 796 posts · 769 votes

4y

Real estate investing is problem solving and the most beautiful thing about that is we get to CHOOSE what kind of problems we deal with.

I'd sell it and buy something in a better area in a red state.

It is what it is

2 Reply

Jim K.

Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes

4y

We used to have crack houses, with the retreat of crack and the rise of meth and opioids, we now have trap houses. But they're all drug houses.

0 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

4y

Originally posted by @Mark Cruse:

@Jay Hinrichs I'ts the neighborhood drug house where the dealer does business and addicts hang out to get high or engage in several other illegal activities (i.e prostitution, kidnapping, stashing). In several instances they are abandoned buildings or a low income rental unit (in a low income area) where anything goes! There are just too many opportunities for things to go wrong with this one. Unless there is some form of gentrification coming it may be a money pit and when vacant may turn to a trap house. Once they buy a new HVAC or appliances they are all moved out of the back door for sale in hours!

OK gotcha seen many of those in my travels and funding business just never heard the term before. When I started funding those who buy lower end properties and sell them to investors ( turnkey operators) We started in 2002 in Detroit And It was there I learned a lot about how to navigate those areas. Out in Portland we simply did not have these issues to that extent at that time. The PM / Rehabber that my CA marketing company used was a wealth of knowledge on how they worked in those areas. But for sure one thing I remember him telling me is that almost all of the stealing of the mechanicals and appliances are inside jobs. Either the day labor used by the contractor and knows the codes comes back that night and steals these things or its the neighbors or the previous tenant. He system was to use retired Detroit Police officers as security so when the contractors and subs came to the job first of the day they had to check in and show ID to the security officers and this cut down thefts to a very large degree. Now individuals really cant do this since his company was doing 10 to 15 reno's at any one time. Its a challenge no doubt for landlords in these areas. Its why the assets are priced for the returns you enjoy. Real Estate prices for risk as well.

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Mark Cruse

Investor · Fort Washington, MD · Member since 2014 · 1k+ posts · 1k+ votes

4y

@Jay Hinrichs yea, the term heavily intertwined within urban, hip hop and pop culture. They really exploded during the crack war days of early 90s. That security approach is interesting. Currently I am repositioning my portfolio away from class D. In my book those are for entry level investors or those types who scoop up 20 at a time and let great PMs run them. You can only go but so low with this kind of stuff. I have been near the bottom and it just wont work in some instances. The ones that are doable I manage and its hard and nearly impossible to stabilize them all simultaneously. Of course it can be astronomical cash flow but with the thousands of moving parts and a consistent state of things being influx, the time spent doesnt justify it all completely. Many of the property managers refused to take on mine. I got sent to Afghanistan and had to manage from there. One told me that the low income units were 5 percent of his client base but he spends 95 percent of time over there. Wasnt worth the headache. If it's to the point where bullets are striking the unit and appliances cant remain a day without security, it damn sure is nothing I will entertain at this point in my career. LOL

1 Reply

Jamaica Adviento

San Diego, CA · Member since 2021 · 13 posts · 3 votes

4y

@NA Basor I would sell. That's too much of a headache and positive changes in the market of the area as well as the residents will take a long time. Besides, due to the market right now and all that, it's a great time to sell.

If selling is definitely not an option for you-

If you have an HOA, talk to them about whats going on and maybe set up a neighborhood watch.

Contact the city or law enforcement and request for a patrol due to the increased crime activity.

Get comfortable with the neighbors and see if you can get any information. Even suspicious car activity in the area would be useful to tip.

Keep calling 911. Too many reports can cause a patrol or stationed cars closer to the neighborhood.

Keep an eye on the market in that neighborhood and buy or advertise to investors. Renovations of a neighborhood can increase marketability and bring in a better crowd.

0 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

4y

Originally posted by @Mark Cruse:

@Jay Hinrichs yea, the term heavily intertwined within urban, hip hop and pop culture. They really exploded during the crack war days of early 90s. That security approach is interesting. Currently I am repositioning my portfolio away from class D. In my book those are for entry level investors or those types who scoop up 20 at a time and let great PMs run them. You can only go but so low with this kind of stuff. I have been near the bottom and it just wont work in some instances. The ones that are doable I manage and its hard and nearly impossible to stabilize them all simultaneously. Of course it can be astronomical cash flow but with the thousands of moving parts and a consistent state of things being influx, the time spent doesnt justify it all completely. Many of the property managers refused to take on mine. I got sent to Afghanistan and had to manage from there. One told me that the low income units were 5 percent of his client base but he spends 95 percent of time over there. Wasnt worth the headache. If it's to the point where bullets are striking the unit and appliances cant remain a day without security, it damn sure is nothing I will entertain at this point in my career. LOL

Ya in those high intensity areas I really look at management as Asset management compared to traditional Property management . And from my experince If I was working as an asset manager in those areas I would charge a fixed fee rented or not and it would be something in the 200 to 300 a month range. this would allow one to hirer more full time staff to really watch these properties and take care of turnover and vacancy in a proficient manner.. the idea that your going to get 3 bids to work on these houses is not realistic in the least ( like what out of area owners want) timing of securing the assets pulling the appliances and Hvac ASAP then reinstalling is what I see the bigger companies do out of necessity.. so you need a big wharehouse to put all the stuff trucks staff etc. But at the end of the day until the folks that live in those areas start policing themselves and stop the craziness I just dont see how things get better. And Like you who made a valent effort to change things and invest there you too end up with enough is enough and will exit and move to other areas that just dont have all those issues. Returns are secondary.

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1 Reply

Mark Cruse

Investor · Fort Washington, MD · Member since 2014 · 1k+ posts · 1k+ votes

4y

@Jay Hinrichs You really think outside of the box; I love it. That asset management approach is interesting. Yes, it may take all that if anyone is willing to do it but like you said, the community would have to make a decision if they want this standard of living. Actually, in those communities most care and want normal lives but they are held hostage to that small segment who destroys it for all. I have called those major warehousing type companies and they are worst than the regular ones in terms of rejecting certain areas. In my experience, I manage much better than most I have ever hired. I understand those areas more than them. The PMs who are very professional with high marks nearly on a 100 percentile basis always tell me they dont service specific zip codes. The one's who will service them are highly incompetent and dysfunctional. If the area is bad enough and you dont have competent management, that cash flow is evaporated. I know one that has 900 monthly cash flow, but the tenants have not paid in 2 years. The landlords say their Christian values wont allow them to evict people with kids. One next to me has a free and clear, over 1100 cash flow but he is under water. Most of his tenants cant make it past 3 months of paying. Some dont even get to the first month. In years all he's dealt with was evictions, squatters, vandalism, turnover renovations and fines from the city from tenant sabotage. It is what it is but people have know what they are getting into and have the ability to make it work. I made it work for over a decade and have helped many in the process but it's time to move on.

1 Reply

Daniel SmythPro Member

Rental Property Investor · Rockford, IL · Member since 2019 · 471 posts · 342 votes

4y

@NA Basor

The issues around the house are sad. While it's easy to reccomend you "dump it quick", that's only what other people say.

I have some property in similar areas.

So, what to do?

Understanding can help you begin. My first house was broken into the night after I signed the contract. Both exterior doors kicked in and jambs destroyed. Funny thing, is that while just a few things were inside the house, nothing was stolen and no inside damage besides the doors.

The house was broken into before we moved in. All lights were on, and we wanted neighbors to know the house was now purchased. I was so happy.

Luckily that was it for this house.

It was a few years after that when I learned my house used to be a dope house. The hoods came by to do damage and saw the people they were looking for didn't live there. Good for us.

Perhaps in your situation there are people looking to mess with the previous residents as well. If you can hold on, it may work out.

Sure you have some expenses not planned for. All of your properties will not be the same. As well, you may find that you have the same issue with another property. Bolting is not always the answer.

Sure I have had issues. I have good relations with my local officials and the Chief of police knows me by name. My properties are clean and the broken things are fixed asap.

Take the time with this first property. I did because I lived there. It may be harder for you because you don't, and can't be there 24/7.

I think you may do well if you can take the time to do that extra work.

There was a house in the neighborhood the punks used to paint graffiti on. One day I bought some paint and painted over the signs.

Neighbors drove by and asked if I was the owner. I said no. I just didn't want this house all messed up with idiot signage. The next week someone tagged it again. I painted it again!

I didn't just splash on paint, I painted it like it should be, and the color was pretty close!

I was warned that I could be shot. I am that kind of guy that enjoys a little fun, and let my cautious neighbors understand that I shoot back and dont call 911!

The house was free from tags the next 30 years.

You can run, or you can decide to take ownership. I in a couple hones in such areas.

Has small similar issues that were resolved with persistence.

Persistence will pay off. If your neighbors see that you are a genuine good landlord, they may help you figure out the why in your issues.

Good luck. I hope your next investment will be easier.

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Seeking Advice Regarding Shootings

Seeking Advice Regarding Shootings

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