All Forum Posts by: Jim K.

Sure. How much did you stiff this woman for in last month's rent, Brian? Was it $1000? More? How's she supposed to pay her own bills? She's probably halfway to losing her own marbles from worry that her credit is going to take a hit because she can't pay her bills. And don't tell me she has plenty of money. She obviously doesn't...obviously no experienced, professional landlord does such things. What, is she retired and is this the one apartment she has as her only source of income? And she took a chance on you because she was too gullible and inexperienced to screen you properly? That sounds like the other side of this story.

You're living there rent-free for this month, freeloading off your landlady, and you want your rights, yes you do. Of course you can't pay her, you "lost your source of income." And of course it's not your fault. And of course it's not her fault that you lost your source of income. But who gets to pay for your freeloading this month? She does, of course. Too bad for her, right? She should just accept it as a business loss, right? You ever run a business? Ever had freeloaders come along and steal your money? I highly doubt it, Brian.

Too bad if she has to eat Alpo or split some of her meds in half this month to get through it.

Now you want advice from other landlords on how to shaft her properly, get some more money out of her maybe.

"Please help." Maybe you want this permanent post on this website to document that you asked people for help today so you can file a frivolous lawsuit against her later? I'm not buying this story of the evil landlady and the helpless tenants exposed to her merciless cruelties, Brian.

@Laura Srocki

This is not a foreclosure, then, no matter how Freddie Mac acquired the property. This is a government REO.

1. I don't pay inspectors to do  home inspections on properties I put offers on anymore. However, I thoroughly recommend them to anyone who isn't in the business of fixing houses. Here's a way to get what you need on the cheap: in lieu of a full home inspection with a report, you can call up a home inspector and ask him to do a walk-through with you without writing up a report or giving you a warranty. This significantly reduces his costs, time investment, and risk, so he should charge you less. You don't need that report or the warranty for an offer. You just need to do a walkthrough with a good generalist.

2. The bank guy is trained to always recommend a title search. Freddie Mac owns the house. They are responsible for selling it to you with a clean title. They did not buy the house without having the title search done and getting title insurance on the property. When you close, you will have a title search done and pay for title insurance. Really, this is a non-issue.

3. You can get an electrical inspection at any time for any reason. The inspector will come out and make sure nothing incredibly stupid has been done to the panel(s). He's not going to check any wiring replacements throughout the property. I do not know the electrician licensing standards of Westmoreland County but I doubt it's going to matter out there.

4. Mold is a non-issue for me when buying a house. I have never paid for mold remediation and never will unless some law forces me. I take care of it myself. It's not that tough. Mold is vastly overhyped.

5. Again, I very much recommend you check the house out with a walkthrough accompanied by a home inspector as described above.

Remember, you are putting in an offer on a distressed property. That means there's something wrong with the property. You have to be prepared to hear something you don't want to hear. Good luck, Laura!

@Brian H.

This is how I see things, Brian. There's a book called How to Study in College by Walter Pauk that I came across when I was a mid-year State University of New York College at Buffalo freshman. I didn't know it then, but the principles first put forth in this book are the basis for almost every college study skills teaching program running in the USA today. It was just a book I ran across at the public library in my hometown in 1993.

I read that book cover-to-cover. Again and again. I had never been given much direction by my parents on how to study, let alone how to study effectively, and I saw the value of this instantly. This was my ticket to the heights of academic performance. I was going to be the kid with the highest grades in the class.

It took a while, but eventually I graduated at the top of my class, summa cum laude, with stratospheric GRE General and Subject Test scores. I applied to six graduate schools for PhD study in my field. Of the six, five accepted me, and I had my pick of four full-ride fellowships and teaching assistantships. One school (University of Pittsburgh) even offered me a TAship to start and guaranteed appointment as a lecturer for the next four years. I turned down Pitt and went to get a PhD for free at Brown and...

Well, that's not the important part of this story.

I have since given copies of How to Study in College to three people. From two of them, I have heard, "Thank you very much." Not a peep after that. I was related to both of them.

The last of the three, whom I am not related to, came to me for study advice. He was planning on preparing for a competitive  national entrance exam to a prestigious postgraduate school in a foreign country in the next year. He took my copy of the book and went home with it.

I got a text message from him 48 hours later: "THIS IS IT! IM GONNA $%@* EM ALL WITH THIS! I DONT BELIEVE IT! YOU ARE THE MAN!"

Guess which of those three people is an internationally-renowned oral surgeon today? The other two...yeah, not so much.

My point is, if you really have the right kid, he's going to be bright and motivated to succeed enough to see the value of what you're handing him, and it's going to be a transformative experience.

For many of us here on this site, it was reading Rich Dad, Poor Dad that lit a fire under us. For me, it was very much How to Study in College but after that, it was another lucky find, an old book called Profits in Buying and Renovating Homes by Lawrence Dworin that got me into rehabbing houses for rent, and then still later in personal finance, it was very much The Millionaire Next Door by Stanley and Danko. I devoured every book Stanley wrote after that. My wife was exactly the same way. We locked on and haven't let go since. Living the way Stanley showed us has been extremely kind to our net worth, financial security, and mental health in running out little property business, and every time now I read something on the Web about how The Millionaire Next Door was a myth and a fable about a false cohort of people and no one could possibly take the ideas laid out in it seriously and they couldn't possibly work today to help make anyone financially secure, oh wow do I laugh, and it's the rich, satisfying laugh of a guy who's  laughing last. Of course I don't agree with everything in the book, but what Stanley's trying to show and say is, overall, the best strategic resource on how to live in order to help yourself get from zero to a million on your personal balance sheet that's ever been written in America.

Stanley's gone, sadly, killed by a drunk driver in 2015. His daughter is finishing his last research project and she's coming out with a new book at the end of September. That may be very accessible. But his last book (2009) was called Stop Acting Rich...and Start Living Like a Real Millionaire, and it was a great read, better than the  than The Millionaire Next Door, first published in 1996, and there was a lot of updated specific research in Stop Acting Rich that still applies.

Note the hoarding of information, Ian. Note it well.

@Jeffery Smyter

This is most usually how it works. Owner-occupier or contractor. One of the main reasons I got my home improvement contractor's license in the first place. It's true of almost all the suburbs of the city, but within the city limits here, you have to have a PA contractor's license to even legally lay a hardwood or tile floor in a rental, stuff you would never need a license and insurance for anywhere else.

The rationale behind it is simple. A contractor has liability insurance, in many cases, liability insurance for days. An owner-occupant, on the other hand, can't legally or realistically be forbidden completely from working on his own house of s/he wants to. Does the property belong to the municipality or the owner, especially an owner living in his own d---ed house? But the municipality can set up roadblocks and obstacles for the owner-occupant, which you will find as soon as the inspector comes around. Usually, these guys HATE working with non-professionals, and they WILL make your life difficult to make sure you do it exactly the way they want the first time and, barring that, you never try to sign off on a permit as an owner-occupant again.

@Mindy Jensen

Kiyosaki has said repeatedly that he suspects it's not an accident at all that personal finance isn't taught in schools.

The first rule of life: have rich parents.

Sadly, my parents would not have been able to teach something they completely didn't understand themselves.

But then again, I've known plenty of children born to affluent parents and very few of them were worth a tinker's damn.

@Michael Ehmann

It is with great hesitation that I post this, and I'm going to say some hard things, but I don't for a minute believe that you don't mean well, Michael.

If I'm reading this correctly, you see this as a kindhearted, rather generous opportunity to help your fellow man out his plight and put him on a better road in life. And it will lead to you being paid on time. It's a win-win situation for both you and the tenants.

This will include some tough love...again, if I'm reading this correctly, you're planning on explaining to your new black tenants that their being broke is a choice they've made. It's their fault, and the power lies with them to reverse their poor past choices and pick themselves up a bit by their own bootstraps.

You're going to tell these new tenants that what's primarily wrong with them is not a legacy of a crime against humanity in the form of three hundred years of black slavery, followed by an unfunded emancipation that turned a huge number of Americans into desperate economic refugees based on the color of their skin, followed by a legacy of organized race hatred, bigotry, pseudoscientific and religious condemnation, and of course overwhelming and widespread intimidation and coercion, followed by a series of failed half-hearted half-measures coupled with an absolute refusal to consider slave reparations and the most lopsided minority levels of poverty and incarceration in the developed world.

You're going to explain to these black folks that all that is of secondary importance, and what's REALLY important now is that they get better managing their money so they can hand it over to you more efficiently and you won't have to work so hard to get it. And you're going to very clearly imply that they should be grateful about it, because after all, increasing these people's "financial literacy" and their "economic stability" is a good thing.

This is going to happen in Georgia, a state where your great-grandfather would have had the legal right to buy their great-grandmother and do whatever he wanted to her, your grandfather might very probably have been able to get away with murdering their grandfather with a knife or a rope as long as he had some good friends with him and a sheet over his head, and your father would have had a chance to live in a neighborhood which allowed him to borrow money to buy a house while their father lived in a neighborhood where a mortgage could be refused due to an arbitrary red line on a map.

I do not believe this is going to go over well. Michael. There's a polarizing difference of social viewpoints here that I believe you're sharply underestimating. I think you need to work through this before you consider implementing a private financial improvement program like the one you're describing.

@Jay Hinrichs

Well, I for one am grateful you and others like you do so here, Jay. There's a core group that's taught me things I didn't know and, looking back, most certainly didn't want to hear. I hope I can at least be a class followup as I get closer to my financial goals.

@Jody Roody

Yes, you're right. Bleach doesn't kill mold. The best chemical to use is sodium hypochlorite. Spot on, my bad.

When you are proactive and not reactive you choose when to spend the money, not Murphy. Murphy can be sadistic about that sort of thing.

IRS tax rules, from what I understand, allow you to deduct repair costs from your income from when you begin to advertise the property as available for rent, not from the moment a tenant moves in. Of course, you should check with your CPA first. If you don't have a CPA, get one. But if I'm right, start advertising, fix the roof, and have it done by the time your screening process is done.

In addition, since it's a small simple roof, as you said. If I were you, I would investigate doing it myself. There are all kinds of books to help you with that. There are some serious bucks to be saved and a process to learn. Roofing is one of the key jobs in this business, and the more you know about it yourself from a hands-on perspective, the more respect you're going to get from roofers, who tend to be the most clannish and arrogant of tradesmen because they do the most dangerous residential trade, although the actual work itself isn't typically as complicated as more highly paid trades like plumbers and electricians.