Seeking Advice Regarding Shootings

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Seeking Advice Regarding Shootings

Account Closed
Member since 2022 · 3 posts · 2 votes

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.

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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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  • James Hamling
    Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
    4y

    @Account Closed caught and pointed out, the financing stated does not make sense for an investment property, it sounds like you used owner/occupant financing but only mention the 1 tenant. 

    As a veteran local market pro I can say yes, the "getto" can get rough, especially at this time, but getting shot up 2 times in such a short time, that's not an accident that's specific, and than the mention of vendors not going there because of tenants weapons, it sounds a LOT like you placed a tenant who is doing something that makes the place a target for such, especially by fact of your rent's being so high for the area. This is a sec8 area, and generally a person can't get a individual payer to get anywhere close to sec8 rent prices, because it is a "getto" and your quoting above sec8 numbers it sounds, fishy. 

    One thing is clear, this property type, market, tenant class etc. is one way outside your wheel-house and was set to fail from start. 

    Look, a UPS driver is a pro-driver, right, but that doesn't mean you can throw him into an F-1 and expect good things to happen. There is a level of strategy specific design, management, capability required. 

    It sounds like even if knew had to sell, you'd probably not have know-how or ability to do so as I am betting you also over-paid, and given the down sounds like would be upside-down. So next item is HOW to sell, and for this only way out I see is on a terms sale, which very VERY few know how to do, or have the connections and client lists to be able to line-up. Even then, it may be very hard to make happen. Short version, the question is get out now and pay todays price, or end up getting out latter and suffer however worse things get and the added price tag all that brings. For example, add on impact of the rent-control measure they release this year which is a pre-approved blank check so it's anyone's guess how bad it could be but all signs are it won't be nice. 

    So yeah, your between a rock and a bigger heavier rock. Either get good at rock busting or get the ___ out!

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  • Account Closed
    OP
    Member since 2022 · 3 posts · 2 votes
    4y

    Thank you all for the very helpful responses.

    As @Tim Swierczek and @James Hamling pointed out, I purchased using owner-occupied financing (I lived in the house for roughly two months before a job relocation).  This is not my first tenant - I had a different family in there for a few months.  The only issue I had was fast turnover but the house was only vacant for 1 day after their move-out.


    I requested a police report but will also start to look into selling as most of you suggested.  Cashflow is okay so far but definitely too many headaches to deal with and as some others mentioned the area has had a very rough couple of years in terms of crime and does not seem to be improving.  

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  • James Hamling
    Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
    4y

    Rafael, thanks for those details, that lends much clarity of situation. Remember GIGO (garbage in, garbage out), any advice on forums can only be as good as the info we are given to work with, right. 

    Yes, it is an easy go-to to say the area is really rough, even often coined a "war-zone" at this time of "things" happening, but as those of us local pro's know it's been decades long that the area has been like this. In the 80's it really did look like a war-zone, so to be honest this is not really anything new just a time where tensions are a bit higher than average and police are very much on a fearful back-foot. 

    I still think it very odd that the house was shot at twice, in such a short period of time, I don't see that a coincidence. It could be that a neighboring house is a target, either way there is something more to that than random chance. 

    And in all this I get a sense that this kind of business operation is something outside your main stay and if that's the case, it will chew you up and spit you out like bubblegum, it really will. For example grease fires, I have never in all the years had a single one in a suburb ring home but in this Mpls N area I once had 3 in the same month, 1 almost took the whole home and I wish it had, would have been a favor to do so. Than there is the lovely constant of "gladiator" dogs which seems to be all but issued to tenants int he area. Oh, one of my personal favorites, the time I stumbled upon a **** Fighting operation in the basement of a unit, yup, that was an interesting inspection, lol. 

    Here is the thing, to wrap it all in a nutshell, have you driven the area because if had you should have noticed the KFC on Broadway, the one that has the entire kitchen and cashiers behind a wall of bullet-proof glass, that your chicken comes through a double door vault like a bank. Heck, even the drive-thru window is a double door of bullet-proof glass. That my friend is what we call THE red-flag of red-flags, when your fried chicken needs bullet-proof glass, yeah. 

    There are some local area pro investors who are a-ok with all this, I have walked properties with some. They throw on there vest and carry a side-arm like it's just another Tuesday. Not my cup of tea but different strokes for different folks. 

    1Reply
  • Dan Bryskin
    Investor · Minneapolis, MN · Member since 2015 · 252 posts · 263 votes
    4y

    @Account Closed, welcome to the North Minneapolis, home of the brave and a grave for others. I don't understand why everyone is so negative. Have you people considered starting a local outreach programs? Say you provide firearms training to the local gangs, aim improves resulting in less property damage. Other idea - paint the house in camouflage colors. Military seems to think it's a good idea. Or if else fails, just sell.

    1Reply
  • Andrei L. Popa
    Member since 2022 · 1 post · 0 votes
    4y
    i m a handyman myself and i dont think i would feel comfortable to go in that area and the best thing for you i think would be to try to do all the work yourself and if it keeps happening i would think is better to sell it even if you dont make any money or lose some 
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