All Forum Posts by: Michael Smythe

First you'll need a money judgment, then you can hire a collection agency to chase the balance.

@Patricia Lashley just hire an eviction attorney to handle this and get out of your own way.

Anything else will just keep losing you more money.

@Hanish Sampath kumar your PMC isn't sending you monthly statements?

Late payments, while a concern to carefully monitor, are not necessarily a bad thing. A late fee is basically an increase in rent:) 

Regarding renewing the lease, would carefully go over the payment history to determine the risk. Sounds like the tenant is paying by the 15th of each month. We would label that low-risk, but monitor to make sure they don't pay later than that.

You should also check how tenant paid late fees are being split between your PMC and you.

Totally feel you man!

Newbies are looking for free everything:

- Education about RE investing
- Software for PM and accounting
- Money!
- Property Management: we laugh about this one!

The shocking part about it is how ignorant and lazy they are about RE Investing, but someone, somewhere hired them and is actually paying them to do something!

Some of them actually have successful careers, but are totally clueless about learning RE Investing.

Just remember, a fool and their money are soon parted.

BTW: we're always figuring out polite responses that either get them to pay us or make them go away - either way, we win!

@Jacklyn Robins many of the mentorship programs are designed to bleed you dry:(

Most of the info they provide you can find right here on BP or locally via other investors in your market.

Since you're not currently working, how many hours did you spend last week on networking and learning about RE Investing?

MAKE IT YOUR FULL-TIME JOB - and good things will happen:)

@James Heiberg Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.

When investing in areas they don’t really know, investors should research the different property Class submarkets. If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.

Our OPINION for the Metro Detroit market (always verify each area for yourself!):

Class A Properties:
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% the more recent norm.
Tenant Pool: Majority will have FICO scores of 680+, zero evictions in last 7 years.

Class B Properties:
Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.
Tenant Pool: Majority will have FICO scores of 620-680, some blemishes, but should have no evictions in last 5 years

Class C Properties:
Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation. Can try to reposition to Class B, but neighborhood may impede these efforts.
Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.
Tenant Pool: majority will have FICO scores of 560-620, many blemishes, but should have no evictions in last 2 years. Verifying last 2 years of rental history very important! Also, focus on 2 years of job/income stability.

Class D Properties:
Cashflow vs Appreciation: Typically, all cashflow with zero or negative relative rent & value appreciation
Vacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.
Tenant Pool: majority will have FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, recent evictions. Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.

Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

@Patrick Fanning first off, this is NOT your legal problem.

We joke in our office that we could give some tenants a brand-new home with $0 rent and they would still find something to complain about!

How long have you owned this property? How long have these specific tenants lived in it?

Now, even though you don't have legal obligation to address these tenant complaints, you may want to do so to keep them, assuming they are GREAT tenants!

As already mentioned by @Samuel Eddinger (great PMC by the way!), you should really analyze the problem. Try this device to measure the noise: https://www.amazon.com/Indicator-30-130dBA-Detector-Temperat...

You can also stick the same device by windows and doors to see if temperature drop - which would indicate an insulation issue.

In addition to getting an Energy Audit, you may also want to look into any state, local or utility programs that offer discounted or financed energy improvement programs. Often, the tenants must apply for these with owner's permission. 

@Rodeline Paul a lot of investors are forced to invest away from their home areas for more affordable properties.

Check out some of the great things happening in Detroit in 2024

https://michiganchronicle.com/2024/01/03/major-developments-that-will-define-detroit-in-2024/

@Monir Badeer

Check out some of the great things happening in Detroit in 2024

https://michiganchronicle.com/2024/01/03/major-developments-that-will-define-detroit-in-2024/

@Sam Abe this is a very common issue between owners and PMCs. 

The primary law that governs how financial institutions can use or share personal information about consumers is the Gramm-Leach-Bliley Act of 1999. This law prohibits an institution from disclosing a consumer’s nonpublic personal information like Social Security numbers, income, and outstanding debt to companies that are not related to the institution.

https://www.ftc.gov/business-g...

https://www.ftc.gov/business-g...

Also, most credit agency contracts do not allow their clients to share info with 3rd parties.

“This data may not be sold or shown to any party not affiliated with the original contract."
https://www.rentspree.com/blog...

Landlords and property managers are required by FCRA regulations to legally review a tenant's credit report (with consent) for the sole intention of determining an applicant's qualification to rent. When setting up an account with a credit reporting agency, a landlord and property manager will submit a simple credit access application and supporting documentation that proves their need for access."
https://www.rentecdirect.com/b...

So, an owner insisting that a PMC give them confidential applicant/tenant information, often proves that an owner who THINKS they can DIY manage, has NOT done their homework regarding all the legalities involved in managing rental properties!

Recommend you hire a real estate attorney to assist you in understanding why the property management company shouldn't and doesn't have to share confidential application information with an owner. They may also be able to create a Hold Harmless document the PMC will accept allowing them to share the info.