All Forum Posts by: Bill Kramer

I have a client who has 100+ properties and shows compassion, she sees herself as last chance housing and rents to people on section 8, fresh out of jail (sex offenders included), those with multiple eviction, etc...

We made a list of vacancies last month. The total was 30+ properties, then another 10 that have squatter, and many more who were at at least 3 months behind.

You don't even want to see the inside of the houses when people leave. 

So, there are those out there who do show compassion and somehow make money.

Alot of 2 bedroom houses can be easily converted to 3 bedrooms with the right creativity. Don't necessarily rule them out.

I did a job where the house was originally 1.5 story, 2br/1bath. We put in a stairwell, and finished out the 2nd floor attic for a master suite. Afterwards, it was a 3br/2bath. The 2nd floor we insulated and installed a ductless mini split for hvac. Rent went way up afterwards.

Evansville is hot right now. There seems to be a "changing of the guard" right now with older investors cashing out and retiring and a new fresh wave of investors coming in. It's a good time to be a contractor, that's for sure. 

That scope is for every minor detail, as if the work would be heavily scrutinized. Is that your quality standards?

$150 to replace a $10 Popup stopper? it seems as if the contractor priced each item out as if he was making an individual trip for each item. There is a certain efficiency from doing the job as a whole vs  many trips.

What's the source of all that water damage, and why is it not being addressed? You sure do have a lot of flaky paint, why? And why is he not finding the source of the problem and fixing that? 

At that price, those issues need to be resolved not spot fixed. 

It is when an educated tenant sets you up for a lawsuit. They know the laws, play stupid and hope you break the law. Then they can pounce on a discrimination lawsuit and make a couple hundred thousand dollars.

This is one I personally witnessed:

Tenant moves in, no problem for 6 months. She shatters her window in a fight with her man, and calls in the work order. Complex calls in a window company who can't get there until next day. She files a police report, claims rape and theft. Then sues the complex more serious money even though no crime ever occured.

Another example: 

Maintenance goes to snake a toilet. Neighbors stops him, asks to tighten door handle real quick. He obliges, without a written work order. Tenant with toilet issue sues because doorknob was done first, and she was discriminated against. And won.

Third example: I had the painting contract at a high crime, low income complex (350 units). Very lucrative contract. So I decided to throw a barbecue for all the tenants. Unfortunately I did not realize I needed to advertise this in advance. I showed up to the property with 250 lbs of meat, buns, condiments, etc... and had a dames lawyer tell me if I fired up that grill I would face massive lawsuit because people could claim they weren't invited and thusly discriminated against. 

Ignorance of the law, is not justification for breaking the law.

We have a complex locally that installed solar panels, and provides free utilities. Very creative solution.

I have seen so much abuse when utilities are provided.

When you pay utilities you are inviting abuse. 

Like setting the thermostat to 40, or 90. Or 3 hour showers, or worse yet doing 500 loads of laundry for everyone they know (if you have hookups) and washing their cars and filling swimming pools, etc...

If you provide utilities, set a cap to prevent abuse.

There is no such thing as a 1099 employee. It's one or the other.

If you plan to be legit, and 1099 anyone who works for you, then your workers comp/general liability policy holder will need a copy of their insurance policies. So your 1099 guy is gonna need his own proof of insurance submitted to you with you listed as an additional insured. Without a COI (Certificate of insurance ) a sub legally cannot work for you.

That why you pay a 1099 guy much more than an employee, because he is gonna get rag dolled by the IRS. 26% self employment tax hurts. That's why so many go under within the first 5 years. The taxman get them, or a decent accountant show them the truth of running a business and they get overwhelmed by the administrative fees no one talks about. 

Also, America is very litigious. God forbid someone get hurt on the job, game over. Do not "trust" your employee won't file unemployment when you eventually fire them either. Seen several contractor get hit with that surprise.

The IRS is but one of many agencies you need to fear when hiring people. Talk to your insurance company to get a real cost of using subs or employees and also talk to your CPA. Quicken, Google, or quickbooks does not count as your cpa.

Time management is crucial for a contractor. Keep a notepad with you at all times, write EVERYTHING down. I call this my bible. Everything I do is documented each day. When I get home, I review what I got done, what still needs done, etc...

I do maintenance service calls as well which can be quite chaotic on a schedule. But I make a daily home depot run to alleviate that.

My day starts at 7 a.m. with the home depot run. Then off to service calls from the day before. Then off to any major remodel I have going on. As service calls come in, I get them diagnosed at 4 p.m. ish and make a list for tomorrow hd run. 99% of all service calls can wait a day. I carry plumbing fittings to solve the problem until I can get back the next day. 

Any discussions with new customers, quotes, etc all goes in my bible. Then I review at end of day, and again in the morning I plan my route.

Time management works great, but you have to slow down and take a step back for it to happen. 

It's called title jumping. This just happened to my son, he bought a car that had been skipped 4 times. The government wants their taxes each time it's sold, so you can't register it.

The simple amswer is track down the original owner, have them put title in the next persons name and so forth.

Lucky for us, after an exhaustive search we found the original owner, and the license branch let them sign an affidavit saying they sold the car to my son. Hopefully you can go that route.

Talk to your local license branch, they will point you in the right direction.