Monday, January 26, 2009

Blog Moving....please update your feed!

I Love Rentals! has been a fun blog. I plan to keep it moving, but I can't keep it moving in two different locations.

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Tuesday, October 07, 2008

Did You Intend to Flip That House?

I recently had a chat with my broker about flipping houses and how the tax rules apply. Now, this isn't a blog post on tax laws and 1031 exchanges. No, if you want to catch those details, then you have to get in touch with Paul, he's got the smarts on that angle.

Flipping houses is all the rage these days. Yes, you can make a lot of money doing that but are you flipping houses for your regular income? If so, you better be prepared to pay the income taxes on it. The rules all changed back on July 9, 2006 and those of you who are into flipping houses need to ask yourself the simple question of "did you intend to flip that house?" If you did, then pay up to Uncle Sam. Here is a good article of the rules, although with the recent bailouts, they don't seem to have worked so well. (I'm just saying...)

Now the gamut we run at Dizmang Properties is a little different. In a nutshell, our investors purchase some disgusting, stinky and oftentimes creepy houses in Springfield, MO. They invest some money into it to fix it up, a la fix-and-flip style...EXCEPT, they don't flip it and sell it. They then hold it.

They hold it and put a Tenant in it for a few years. The Tenant is buying them that building by paying the rent and it's working out well for the Investor. If they go to sell it, then they do a 1031 Tax Deferred Exchange on the property (again, ask Paul for details) to avoid paying capital gains taxes. And yes, there are all sorts of rules to go along with that as well.

I am not a tax specialist or attorney (obviously). Nor am I financial planner. My job is to be the REALTOR/Property Manager. I help find the houses that need a little tlc, plan out budgets for remodeling, manage the property and pay the bills on it. I just wanted to give you something to think about as the end of the year approaches.

Thursday, August 28, 2008

Do I really hate rentals? Nah...

Yesterday, Paul and I taught a 90 minute class at The Greater Springfield Board of REALTORS on "Tips & Tricks to Managing Rental Properties" in Springfield, MO. There were probably 60 REALTORS there to hear what we had to say about managing rental properties, hear our war stories and share theirs. Or maybe they were just there for the free lunch that was served, who knows, but at least they showed up.

What ended up being a great class then turned into several e-mails from attendees later that day requesting more info and such. Which is great as I love reading people's comments on the topic. However, I got one e-mail from a fellow REALTOR that asked me if I really "hated rentals" the way I said I had on one of my online profiles. Wow! How unprofessional of me to make a flippant comment on "hating" rentals.

I guess I should probably change the comment since it really isn't true.

It's actually the bad tenants that drive me crazy! There was a time (before Amanda came on the scene) where I was so inundated with property management phone calls, that every little issue was just a tenant that was whining about something. I was managing about 115 units almost completely by myself while Paul was out selling houses. Come to find out, I was letting the issues and work get the best of me and wasn't managing my job too well. (Hindsight is always 20/20!) So, what started as an office joke about how much I just love rentals and how there is such a thin line between love and hate has now turned into "Jessica Hates Rentals" campaign and therefore it has carried over into my online blogging world. And I never meant for it to.

I'm sure that 600+ units=$30K income is a great thing (although we are not quite there...600 tenants yes, but only 200 actual rental units). And I'm sure that the income in a slow market is most definitely worth it. However, my biggest suggestion is that you have staff in place to assist you as you grow your property management business and a strong procedure/plan in place for how to handle issues as they arise. Kind of like the boy scout motto: "Always Be Prepared". :)

I sure hope that my flippant comment about "hating" rentals doesn't discourage you from getting into property management. It's not all bad and it's actually done me quite well.

Monday, July 07, 2008

The Door Was Unlocked, So I Moved In

It amazes me how many Tenants think that they can do whatever they want. Their immaturity and know-it-all attitude often shows when they say and do dumb things like this juicy tidbit that I heard today.

We signed a lease with three college students 2 weeks ago. As a typical clause in our lease, we state that we would not give keys and possession until all parties have signed the lease agreement and all monies have been paid. This is the first month's rent and security deposit. So at lease signing, we explain this term of the lease agreement to the 3 new Tenants.

The "kids", yes I use this term because again...their immaturity showed, comes into the office today to pick up keys. I tell them "sorry, no keys for you" since they were not planning on paying the rent. One of them proceeds to tell me that they were told by one of our staff people that he didn't have to pay rent since he already paid the security deposit. Huh!? I tell him no way-no how and then he starts running his mouth about how we didn't explain things right to him and that he has already moved in to the property. What?! I ask him how this happened, and he said "well... uh... the door was unlocked and I could only move in on Friday, so I went ahead and moved my stuff in." I was floored.

I can not believe the audacity of people that just do what they want to do when they want to do it. Am I the only one who feels that this is another ridiculous, selfish, stupid thing that people do to get what they want? Do they just feel entitled to whatever is around, whether they have paid for it or not?

I got Paul involved in this one and boy oh boy did he read this Tenant the riot act. He immediately sent our maintenance guy over to lock up and secure the house since these morons were now trespassing.

After realizing that we are not the run-of-the-mill slumlord, the Tenants eventually come up with the rent money to get the keys because they were worried about their "stuff" that was already moved into the house. Later when I ask Steve what kind of "stuff" was already moved into the house. He says "oh not much, just a marijuana clock, some incense and a condom sitting on a coffee table." you think that we are gonna have problems with these Tenants?

Thursday, June 19, 2008

Fire!! In A Sensational Way

My day started out on a stressful note this morning. I was running late with kids and in the rush hour traffic, I get a phone call from Amanda on my cell phone. She says "we've had a fire". My heart panics, thinking I can't do this again! So I immediately call Paul and sure enough, he already on the phone with the fire marshal.

This fire was all over the morning newscasts and I should have caught it when they talked about the 800 block of North Forrest Street, but since it was such a crazy morning I guess I just missed it. Supposedly there have been several, recent arson attempts in this part of Springfield, with some crazy teens making molotov cocktails. A molotov cocktail is a fire bomb (of sorts) with a beer bottle, large quantities of gasoline, a rag and a match. The bomb is thrown at a house and set to explode and any manufacturing or posession of such fire bombs are considered a felony. I guess this rental house was a target of one of these arson attempts and the glorious recipient of one of these "cocktails".

Now, granted, this is a dangerous situation and I don't mean to downplay what happened. However, what is so ridiculous is the way the morning news over-sensationalized this story. As scary as a fire bomb sounds...this is what we got:

Yeah, that's what I thought too...over sensationalized. Just another day in the life of property management.

Thursday, March 27, 2008

You've Been Red-Listed

I'm not quite sure what "red-listed" means, but it's a good term that just slipped out while talking to once again another nut-job in this property management business.

Last week, we had a Tenant and her sister come by and fill out and application for one of our smaller units. She told us that it would be her and her sister living there. Oh and the boyfriend too. The boyfriend wasn't discovered until later after prying a little bit and asking more questions. The tenants listed an address here in Springfield of an apartment they were living in as a current address. Then, they listed another woman's name as their current landlord. When we called the "current landlord" listed to check references, we reached a woman who couldn't quite give us the truth, the whole truth and nothing but the truth. (We could just tell). Now this "current landlord" said that the home was a single family home and the tenants lived upstairs, but the address listed an Apartment K number. So we decided to investigate a little bit further. It was a nice day, and we drove over there. We saw no single family home. This is what we saw:

Like I said...this ain't no single family home. So we check into it at the property manager's office on-site. When we explain the situation, she (the real landlord) gets a surprised look on her face and sure enough, she tells us that the "current landlord" listed on our application is one of her tenants. Another a-ha! moment for us!

So we stir it up a little bit more, and we decide to call the fake landlord back and ask her more questions about her single family home. We tell her that it's not quite what we envisioned as a single family home, and she has the audacity to say "well did you check the east or the west side?" Huh?!

After confronting the fake landlord about her lies, we decide to red-list her and the tenants that had applied for the property. Red list is our way of putting together a list of fraudulent people. Therefore, this serves as a warning to all red-list quality people out there. Once again, don't mess with Dizmang Properties.

Wednesday, March 19, 2008

Desperately Seeking Sump Pumps!

This blog really isn't the weather channel blog. But for some reason I seem to keep writing about snow, ice storms, a crazy pendulum swinging temperatures. Believe it or not, weather plays a huge part in managing over 200 rental properties.

Over the last 24 hours, Springfield has received 7+ inches of rain flooding out roadways, bridges and basements of homes. Yep, it even made national coverage on The Today Show this morning...only I don't get it....why didn't they send that yummy Matt Lauer to our neck of the woods??

Our 9-1-1 Tenant Emergency Line was ringing off the hook last night and this morning. We have several basements flooded causing hot water tanks and furnaces to quit working. Of course, it also adds up to Tenant complaints, but that was to be expected.

So now we are desperately seeking sump pumps! All the local hardware stores are out. We try our hardest to get our Tenants problems fixed quickly. However, at times like this we certainly appreciate their patience. We'll get you fixed up as soon as possible. Just keep your floaties on.