Application Fees -- New Renter Bill of Rights Proposal -- Good or Bad?

So many tenants are asking me sheepishly, “What is your application fee?” I do charge $35, but typically I only charge it to the person who is actually getting the house.

Tenants tell me they are going broke paying application fees. Tenants have been heard. There is a new proposal in Michigan called the Renter’s Bill of Rights. The proposal suggests a fee limitation restriction. Let’s talk about that!

What I really want are your stories. I want to use the comments in this video to give to the lawmakers to help them make their decision. I know the lobbyist for the landlords. But I think all the landlords need the tenant’s perspectives too.

In this video, I’m going to tell you who I am, offer 3 quick tips for Tenants, 2 suggestions for landlords, one about a law you need to know before you charge your application fee. And I end on two stories about application fees.

Introduction

I’m Monique Burns. My husband and I started our Detroit rental portfolio in late 2007. Our first tenant moved in in 2008. We built up our portfolio. From there we helped other people build their portfolios by buying the houses ourselves, renovating them, finding tenants, selling the houses, and managing the properties. We scaled up our management company and sold it in 2020. Now we are back to increasing our own portfolio and selling properties to homeowners. I do offer consulting services right now for investors who want to save money on property management fees or learn how Section 8 works for landlords. Email me if you’re interested. Monique@GreatDayPM.com

Tenant Tip #1

Find out what the qualifications are before you apply. If you ask me, I’ll wonder what you’re worried about. You may want to state why you’re asking, that it strictly has to do with application fees. But most of us legitimate landlords have our qualifications publicly posted. Look for that before you ask, if you can.

Tenant Tip #2

Tenants, I want to tell you something from a landlord’s perspective. When you complain about paying too many application fees, what I’m hearing is, “My application is bad and other landlords are denying my application.” So don’t say that.

Tenant Tip #3

Tenants, please watch out for a landlord who insists on taking the application fee before showing you the house. This could be a scam. I had a tenant tell me my house I had listed for $1,250 was on Craigslist for $750. For $50 she could get a viewing of the house. The applicant was suspicious and Googled my address and found the real ad. On the other hand, this may be the policy of the property manager so they aren’t wasting time showing a house to people not qualified.

What Tenants Need to Understand

I’m also hearing that Tenants do not understand what it takes for us to process your application. We have software to pay for. We have people to pay for to review your application and sort through what is true or not true. This can take an hour or two. Then to run the actual background check, it’s anywhere from $15 to $30. It depends on the property manager’s software. We then have to pay someone to show you the house. We would rather not do all that if you aren’t serious about the house.

On the other hand, I was thinking about when I had a property management company. I read resumes. I then took my time to meet the people. I spent a good hour interviewing my employees. If I were a bigger company, I would have sent their application to a company that does criminal checks and employment verifications. I never charged anyone to apply for the job!

Landlord Suggestion #1

Landlords, here is an idea I heard of. We could use the application fee and apply it to the first month’s rent to the tenant who qualified. We could do a soft check of the tenant’s application (read through it, Google their name, look up the court records), then decide not to do the background check and return a partial amount to the tenant.

Landlord Suggestion #2

Does your state have application fee restrictions? Here is a link to a website that shows each state. Michigan as a state does not, but Grand Rapids, Michigan, has its own ordinance that basically states landlords are to only charge the exact cost of running the background and they are to display what that cost is. Here is an example from this management company:

The following is an itemized explanation for the disposition and use of the application fee:

AmRent (Criminal, Credit, and Cross ID Check): $12.40

Online Application Software: $7.95

Office Administration (rental history check and income verification): $29.65

Here is a link to find out about your state’s rules. But you may want to Google your own municipality as well to see if there are application fee restrictions from MY SMART MOVE:

My 2 Bad Landlord Story

I was talking to a property management company and I asked how they pay their staff. It’s expensive!

“All of our office staff are paid by the application fees.”

I put this out as a general question on Metro Detroit Real Estate Investors Facebook Group and I got this one reply:

Lol you got commissioned sales reps working for big time property management groups that manage 2000 properties in Plymouth and they are charging 150 per application.. on a 20 unit that has one permanent open rental just for viewing and they will never rent that unit.. it brings in over 75k in one year with just 10 applications a week. What are you even talking about lol you really don't understand how this cut throat world works do you?

Conclusion

I see both sides to this. I try to meet people in the middle. I do the soft check for free. It’s my time that I should be paid for. And I only charge the application fee when it starts costing me money to run their background. I don’t know that I have it all figured out or not. What do you think is fair? If this bill passes, what amount should the fee be?

Section 8 Allows Criminals Now to Have Vouchers. Say WHATTT? HUD's Second Chance Rule Landlords Need to Know

I’ve been telling you all the wrong thing! I thought the Public Housing Authorities (PHAs) did a thorough national criminal check and if there’s a record, that’s it. No voucher for them. But I didn’t get the memo sent in April of 2022:

In a memo sent out to staff {in April of 2022} HUD Secretary Marcia Fudge instructed the department to review programs and policies that may "pose barriers to housing for persons with criminal histories or their families." USA Today

I have to say that I understand it and I don’t totally disagree. We landlords just need to be more thorough in our own criminal checks.

STORYTIME: AN UNFORTUNATE CRIMINAL

I received a call from an applicant. She asked me what I do for my background check. It’s illegal in Detroit to deny applicants based on a having a criminal record. We have to look at their whole picture and not deny them on that one checkbox. I explained that part to her and she was so grateful I look at the whole picture, because she was convicted of some kind of fraud. She was reluctant to tell me the story but it sounded to me as though she was just ashamed about it.

She was with a bad boyfriend who was stealing things. She knew he was stealing things but she was not participating. One day he was pulled over by the police who discovered the stolen items. Both she and her boyfriend were arrested. She said she was only 18 years old and she had never done anything wrong in her life and she found herself sitting in jail. Her public defender told her if she wants out of that jail cell, the best way out was to admit guilt to being an assessory. So she did. Now she has a record. She is in the process of having her record wiped clean though, she said. Would I still rent to her?

I would rent to her because she seemed believable to me. She admitted to knowing what the boyfriend was up to. She sounded so remorseful. It was a long time ago. I made a judgment call, having heard her story, and said yes, she could rent from me, considering she qualified otherwise. We never made it that far. I’m not sure how we left it. I talk with a lot of potential applicants!

HUD Offers Second Chances

I found a letter to the PHA’s issued by HUD’s from former Secretary Shaun Donovan:

HUD’s goal of “helping ex-offenders gain access to one of the most fundamental building blocks of a stable life – a place to live.”  HUD has also previously stressed the troubling relationship between housing barriers for individuals with criminal records and homelessness, stating that “the difficulties in reintegrating into the community increase the risk of homelessness for released prisoners, and homelessness in turn increases the risk of subsequent re-incarceration.”” Notice PIH 2015-19 Issued November 2, 2015

What Crimes are NOT Given a Second Chance?

I found this in the same Notice PIH 2015-19

Violent criminal activity, defined by HUD as any criminal activity that has as one of its elements the use, attempted use, or threatened use of physical force substantial enough to cause, or be reasonably likely to cause, serious bodily injury or property damage [24 CFR 5.100].

Each PHA is required to review the criminal activity. They cannot deny someone just because they were arrested. They have to look at the whole situation and even allow the applicant to make a case for themselves of their innocence or show remorse or changed behavior.

But there are two kinds of people who cannot get on Section 8, no matter what.

To be specific

One of them is if someone is on the Lifetime Sex Offender list.

Level 3 or Tier III offenses are considered to be the most serious. This category includes people who have been convicted of violent or non-violent offenses with adults or minors.

The other NEVER EVER criminal is the one who has been convicted of producing methamphetamine in federally-assisted housing. Don’t worry about cocaine, heroin, fentanyl, LSD, mescaline, moonshine. Meth, though? No, no, no, no voucher for them.

I wish I knew what the case was that started this!

I recommend doing your own background check. I use Mr. Landlord’s background check program. Decide for yourself. Ask the applicant yourself and use your own judgment. One of my longest best tenants is actually a reformed car jacker. He did his time and if I ever forget my keys, I know who to call.

How to Get the Max Amount of Rent Permissible from a new Section 8 Applicant

In order to find a Section 8 tenant, the owner needs to list their house for rent as being available for Section 8 tenants.

In my last video I suggested to list the house at www.AffordableHousing.com. Why not? This is where all the Section 8 offices tell their Housing Choice Voucher (HCV or Section 8) participants to apply.

I was wrong!

It has since come to my attention that owners have listed their properties on that website only to discover they could get more from the applicant than the amount on their listing. The owner gets Section 8 to agree to a higher amount. The paperwork is submitted. The inspection is done. The tenant moves in. Then it’s time for Section 8 to pay the owner and Section 8 goes to their favorite website to see your ad, https://www.affordablehousing.com/, and Section 8 says, “What? You will accept this lower amount? Great. That’s what we will pay you.”

What Amount do you List it for then?

Some people think they should just list it for the HUD Fair Market amount. This is the amount of rent you can get if you, the landlord, agree to pay for the gas, electric, and water and you are doing all the bells and whistles. You maybe offer a garage, a patio, a driveway, ceiling fans, washer, dryer, stove, refrigerator, disposal, and maybe even a gated community with a swimming pool. Then you can get that full amount. Oh, and it has to be in a neighborhood where the non Section 8 houses rent for that much too.

So the answer is to list it for around $300 less than the HUD FMR so your phone will ring. And on your listing you state, “Actual Rental Amount Depends on Voucher.” And DO NOT LIST IT ON SECTION 8’S FAVORITE WEBSITE! www.AffordableHousing.com. And once you get a tenant, for heaven’s sake, take down your listing.

So Where Should You List it if Not on the Favorite Website?

I’m playing around with this myself right now. There is a a local Facebook group my friend Jay started. That has been going well.

I will also post on Zillow but it does cost me $29.99 each time I list it. Yikes! And I am now selling my own local list of Section 8 office’s direct contacts and submission forms I’ve gathered over the many years of doing this.

How Do You Determine the Maximum Amount You Can Even Get?

This is NOT EASY! Tenants don’t seem to know or they don’t want to tell what that number is. The question you need to ask is, “What is your Payment Standard?” That’s Section 8 code language for what rent can it be if you, the tenant, have to pay your own gas, electric, and water. Then it gets all fuzzy. I have another video that goes into that.

The other code phrase is, “What is your maximum gross rent?” The maximum gross rent is the amount of rent if you, the landlord, are offering all those bells and whistles. If I hear a maximum gross rent, I minus off around $200 and that’s the amount of their payment standard. That’s the amount of rent that their Section 8 office will allow me to charge, give or take $50.

If I’m still lost, or the HCV applicant is lost, or even if I just want assurance, I will email their caseworker. Here is a sample of a recent email:

The replies from Section 8 area always so cryptic. This is the reply: “It will not.  Her maximum gross rent which is rent and any utilities she would pay cannot exceed $1394.”

I took that to mean if I take off $200 for the utilities, I can probably charge the tenant around $1,200/month for my three-bedroom Detroit home. That’s what I really wanted anyway. I was hoping for $1,250 but if she were really good, I would take her at $1,200 and just raise the rent as far as possible in a year. I never verified the exact amount with this applicant because she had too many other things on her record that weren’t that favorable. Let’s just say she knows her way around 36th District Court pretty well.

I did end up with a different tenant with a much cleaner background check. And the caseworker of the tenant I chose told me the most rent I could charge is “around” $1,250. They cannot guarantee the amount because it takes more calculations to determine the bells and the whistles. taking that amount up or down a little bit. Section 8 will also take into consideration just how much the tenant is paying toward rent as well before the final rental amount is accepted at $1,250 or if Section 8 needs to ask me to take that number down by a few dollars to make it work.

If you need more guidance on how this looks in real life, I’m starting to record myself questioning the applicants on the phone. Check with this link below to see what deeper training packages I’m offering.

Should You Rent to Someone with Section 8? Yes! I EXCLUSIVELY Choose Section 8 Tenants These Days.

I had a Youtube fan tell me she wishes she could find a landlord where she lives who would accept a Housing Choice Voucher (Section 8 Voucher). I said, “Well, I’ll make you a video you can send when you do applications.” So here it is!

Myth #1 — They Trash Your House

This one just bugs me. People that say this, declare it as though they are the experts. Whenever I ask them if they visited their tenant’s prior residence before moving them in, was that house trashed? “What? I never went to see how they lived before they moved into my house.” WELL THEN! No big shock. I’ve made a couple of videos about this subject.

This next video is my more current shorter version of how I do what I call home visits:

Myth #2: Difficult Inspections

…Said the slumlord.

We don’t find their inspections to be all that difficult really. We know what things they look for and we have them done. Section 8 wants health and safety issues taken care of. The challenges are usually the tenant-caused damages that we have to fix in order to pass the inspection. But those items can be billed back to the tenant and sent in as lease violations to their caseworker. The inspections have gone from yearly now to every other year, so not terrible. The rest of these benefits outweigh that.

Here is a video I forced my husband to do. He wasn’t happy with me putting a camera in his face, but he knows how to pass a Section 8 inspection. And the inspectors really respect him too.

9 Benefits of Renting to Section 8 Tenants

#9. No need to do the Detroit city certification process.

I love this one in Detroit! We just email the city our passed Section 8 inspection report and the city mails us back a Certificate of Occupancy. This saves us from getting the $500 lead paint test and the $160 city inspection and all the city’s repairs that come along with it. Check out my other blogs about how to do this.

#8 Landlord Incentive Plans

I haven’t gotten to take advantage of this because I sold my property management company so I’m really only placing tenants. But once the tenant moves and if that tenant caused significant damage, there are some grant programs out there that landlords can access that are meant to incentivize landlords to not give up on Section 8 tenants. When someone applies, ask them for their caseworker’s name. Email the Section 8 caseworker and ask if they have any incentive programs.

#7. Income Verification Done For Us

Section 8 is able to figure out exactly the tenant’s income to determine how much money is 30% of that income. That 30% is the portion the tenant has to pay to us. If the tenant’s income changes, so does the Section 8 portion. We don’t have to figure out their income and hope we’re somewhat close.

#6. We can get higher rent from Section 8 participants

This isn’t true in every city, but in Detroit, the HUD maximum limit is significantly higher than the market rental amounts. I can push my rent to be somewhere between the market rent that cash paying tenants are paying to close to the HUD FMR (Fair Market Rent). Go on the HUD website and check out your own county to see how much rent Section 8 is allowed to go up to. You can’t go above it. If you go right up to that amount, you have to prove that other houses are actually renting for that price too.

#5. Large Pool of Applicants

Most landlords historically shy away from renting to people with Section 8. When my ads state I love Section 8 or Section 8 Only, I get a LOT of applications. Lately, it’s not as many as in the past though because the Detroit courts have added 3-4 months onto their eviction times so a lot of us are seeking Section 8 only applicants.

#4 Verified Landlord Reference

If you ask for the applicant’s caseworker’s email address, you can request a landlord reference from the applicant’s previous landlord. HUD requires the Section 8 offices to give that to us. Nice!

#3. They Tend to Stay Longer

From my own experience and that of other landlords who rent to people on Section 8, they just stay longer. They don’t have that much money to be able to move is probably why.

#2. We Can Tattle on Them

Every lease violation is up for grabs for us to forward that along to their caseworker. Voucher holders do not want lease violations, and especially not anything leading up to an eviction, on their record. It plays against them and they could lose their voucher. If a bailiff has to remove them from the house, they do lose their voucher. If you’ve ever been through a full eviction and had to have that expense of having a bailiff clean out your house, you know how expensive that is. If you have to evict a Section 8 tenant, it is very unlikely that tenant will stick it out until a bailiff hauls them away.

#1. Reliable Cash Flow

It’s a beautiful thing every month knowing I will receive a set deposit directly into my bank account like clockwork.

Storytime: Detroit Rentals: What Do Squatters and House Sitters Have To To With It?

If there is a vacant house in Detroit for any length of time, you better assume an unscrupulous neighbor notices and he is in that house that night stealing the furnace and hot water heater. And if there is a vacant house another risk is that a squatter will move themselves in.

We have a had a few squatter situations recently that have had some interesting conclusions.

We have a house that we renovated back in 2019. We have since sold our property management business so that house was managed by a couple of different property managers. The owner got fed up with a non-paying tenant who took full advantage of the COVID court backlogs. That tenant was finally evicted after a year of no rent. I was able to sell the house to a new owner but between owners the house got stripped. This time instead of just stealing the furnace and hot water heater, these thieves took out the new kitchen cabinets, bathroom vanity, and removed the security and steel doors.

How could this have been prevented? The property manager could have immediately removed the furnace and hot water heater right after the eviction. The owner could have had the property manager board up the house immediately, which doesn’t help when the crew goes there to clean it out. Or they could have paid for DAWGS doors, which also makes renovating it harder. Or they could have hired a house sitter. House sitters come with their own issues though. See my video here on how to secure a property. None of these methods are cure alls though. But the house was simply left vacant too long.

In the following video, I go into detail about each of these options.

This video I made also goes into ways to handle squatters together with another squatter story:

Here is another video I made about a house that had DAWGS doors on it but a person with a vendetta found another way to destroy the house. This is more unusual in Detroit to have someone go to this length though.

When it came to our attention that the doors were missing and nothing was being done, we immediately had the doors boarded up. Soon thereafter my husband came with his crew to assess the turnover project. They did notice a broken window on the main floor, but they assumed that happened when someone stole the furnace after the tenants vacated. My husband Pat and his crew were walking through the house and everything was fine until they got to the upstairs. Pat opened the door and felt heat which had to be from a space heater and he smelled cigarette smoke that was really fresh. Pat yelled up the stairs, “Homeowner here. Coming up. Announce yourself.” No one announced themselves.

It was pretty dangerous for Pat to go up there because it could have been anyone and he could have gotten hit over the top of the head on his way up those stairs. But that’s not what happened. He got up there only to find a scared little young WOMAN crying hysterically in fear.

Apparently, she is from Ohio and moved to Detroit to follow a boyfriend. She also got a job at The Dollar Tree. She ended up dumping the boyfriend and had nowhere to live. She saw that we had power in this house so she was able to break in a window before we boarded it and let herself in.

So what to do? My husband took compassion. We have a 23-year-old daughter who is now in California going to graduate school. She had a very trying time herself between places to live and she even threatened that she might have to sleep in her car, but we were able to get her a hotel for the interim. Apparently, this girl does not have that relationship with her parents.

What to do? Turn her from squatter into house sitter. Perfect! But is it perfect? I kept asking Pat if I could make a video about this because I think it’s brilliant. And he said NO! We don’t know what will happen while we renovate the house. We don’t know what will happen when we need her to move. Well, she was great. She didn’t bother the crew at all. She kept to herself. She left ZERO messes. I mean we’ve NEVER had a house sitter that clean. And just yesterday we moved a tenant in that house and we moved her to another house of ours. No drama.

My next squatter story happened yesterday. Jeff, our crew leader, went to meet Pat at a house they were about to start only to see a man walk out of the house. Pat showed up and saw Jeff speaking with this man outside so Pat approached them only to learn that this man was squatting in our house.

Pat is a master negotiator. He should work for the FBI or CIA. He would probably be good with hostage situations too. So Pat kindly told the man that he needs to move out of our house. And that man lazily said he’d get around to it. Pat told him no, it needs to be done right now. Let’s go.

They entered the house only to discover the living room and kitchen were curtained off with sheets. Our old stove that came with the house was open and heating the house. There’s no furnace there of course. It’s a vacant house. And there was a HUGE flat screen TV on the mantle of the fireplace, a table and some chairs and TWO MORE MEN!

Pat at first was concerned it was a drug den but he saw no drug paraphernalia. Pat quickly deduced it’s a place these guys were using as their man cave and probably to sell marijuana from.

Pat used his skills of peacemaking and got these guys to pack it up and move it out. They didn’t want police showing up and looking for their warrants probably. They don’t strike us as the types that will be back either. But who knows?

This just happened yesterday. Our female house sitter is in a different house that has a furnace. We’re not feeling like we want her to move into this house just in case these guys do come back. But for now it’s all good because we don’t have anything of value there yet. What will we do to secure it once we do? That is TO BE DETERMINED.

Moral of the story: Buy a house that already has a newly vetted paying tenant in it so you don’t have to deal with these issues until that tenant moves out. And be ready with your plan for when that tenant moves out. Have someone lined up to house sit, remove the furnace and hot water heater, board it, DAWGS doors it — but don’t leave it gaping open welcoming in the thieves and squatters!

Another Cash for Keys Storytime: We're too nice! (Copy)

We bought this house in April of 2020 from a widow whose late husband had bought this house when houses were really cheap in Detroit. Her husband moved his sister into the house. Supposedly the sister paid $600/month rent to her brother. We wonder if she really ever paid rent. We kind of doubt it.

Upon purchase we contacted the tenant and told her we were doing a gradual rental increase to $900 (still below market level but cheaper than going through a tenant turnover) if she decides to stay in the property. Yes, she would love to. And she even complied with the gradual rental increases. Not without a lot of fuss of course. We also let her know that we’d be working on the house.

Eventually the rent turned into a hostage situation that was pending the work and the schedule of the workers and the tenant’s work schedule. The phone calls escalated. Why isn’t it done yet? Why is my living room torn up? I want my bedroom a different color. When are you renovating the kitchen? I want to tell you where the cabinets should go. No, I want more cabinets. I can’t let them finish the bathroom because I’m going to work now. Why isn’t my bathroom done yet? I insist since you’re repainting it all anyway that my bedroom is hot pink.

This was MONTHS like this of way too much coordination with a difficult person who eventually stopped paying rent. We had repainted the interior, changed her bathroom vanity, put in a new bathroom floor, changed some windows. Many things! We even repainted her whole basement floor. But it wasn’t ENOUGH or FAST ENOUGH for this tenant. So she called the city that it was an unlawful rental. We were in the process of getting the house renovated so WE could call the city to make it a legal rental.

We had to pay the ticket and then we HAD to go finish the work with her in it not paying rent, just to pass the city inspection issues that came up. We came back into the house only to discover she had scuffed up every painted wall, let her cigarettes scorch the new bathroom vanity and the worst thing was she chained up her little dog to a pole in the basement where the dog urinated and defecated and ruined the newly painted floor.

That was the Last Straw!

We have a real problem with chaining up dogs. But add the rest, and she was BEYOND the point of SHE’S GOTTA GO! It is incredibly rare that we’ve ever bought a house with someone else’s tenants in it and it worked out for us. I wish I had just evicted her from day one. This cost us months of holding fees when the goal was to renovate it and sell it.

We finally got her to move AMAZINGLY on her own by offering her $1,000 cash for keys. We had an eviction notice as well, but she didn’t wait out the court time. She found herself somewhere to live and off she went. Hallelujah!

I have a rental applicant now who wants to use it as an elderly group home. I usually do not consult with my buyer about tenant placements. It’s my specialty to know whom to choose, but in this instance, it felt right to consult with the new buyer. This is something new for us to rent to a group home. The buyers have approved. So this will be interesting. I won’t be the property manager, so I may not know. But I was able to get $1,200/month rent, which is really at the top of the rental market these days for a 3-bedroom house in Detroit. Having it listed at $1,200/month was attracting large families with large Section 8 vouchers. The house just wasn’t large enough for that many bodies in my opinion.

Lessons Learned

I don’t know! I don’t do gradual rental increases anymore. That buys too much time for the tenant to do what they were going to do anyway while we wait and see. I would have liked to have just evicted her. I’d like to be that person who can not be swayed by anyone and just handle business. Get them out so we can renovate the house and if they qualify, they can rent from us again. That’s what’s best for business. But then I meet the people and I don’t have the heart to do that, even though history has proven it’s the best idea. Really, I just don’t want to work with tenants anymore. We’re too nice! It doesn’t seem to help us in the long run or even the tenants who take advantage of us. Tenants need to be renting places they can afford. We can’t afford to do low rental amounts. There’s no profit in it. We don’t work for free. Sure seems like it sometimes though.

A Basic Renovation that is not so BASIC!

I happened to be in the neighborhood doing what I call a home visit. I like to see how tenants live before I let them rent from us. I noticed on my way to visit this applicant that 11947 Greiner was around the corner so I popped in on Jeff, our crew leader.

Jeff has been with us for around 20 years. He started working for my husband when we owned Burns Floor Covering. Jeff is VERY SMART. He has uncommonly good common sense. When we started renovating houses in Detroit, he was very happy to make the career change with my husband, Pat.

Pat and Jeff are pretty much self-taught on renovating houses. They have renovated around 200 houses in Detroit. Jeff is to a point where Pat gives him full free reign. They have always been in sync with each other. It was fun watching them do floors together. They barely speak but seem to know what the other is about to do and hand over tools at the right time like a ballet.

We bought this house for a fair price from a wholesaler. The intention is to sell it for a profit. When I filmed this, Jeff was bugging me that he kept saying it was so “simple.” It makes it seem as though we’re getting over on the buyer. But Pat just laughed and he said, “It may be simple to Jeff, but it’s not to other people.”

We get called to check out houses that other people renovate. Yesterday Pat saw a house that was renovated so the seller could list it on the open market. The renovation was done so badly though, it was outright embarrassing to even look at. The main items were done. There is a new roof, extremely overpriced new windows, and a new furnace. It’s been painted. But the finishing pieces that Jeff would know to do were not done. And those things are so simple!

• Cleaning! The countertop was gunky.

• The paint spatter plate covers weren’t replaced with new ones.

• The hardwood floor looked to be done by a total novice.

• The basement stairs weren’t carpeted.

• The old cheap hot water heater that’s about to die was left in the house.

• The kitchen floor wasn’t luxury vinyl plank, it was a cheap vinyl.

• The carpet was chintzy and installed incorrectly.

• The shower had a regular window in it instead of glass block.

• The showerhead was so cheap, one good spray and it would spray right off.

• The kitchen faucets was plastic.

• The basement floor and walls were the same dark gray.

• The paint job was sloppy.

So when Jeff says “so easy” all through my video, Pat shakes his head and thinks Jeff has no idea just how excellent he is and how much attention to detail he has. It’s the part that makes the difference. It’s why our houses are some of the best in Detroit, if I don’t say so myself!

The Secret about Detroit Certificates of Compliance that Property Managers Don't Want You to Know

The Secret

The secret is it’s much easier than people think to obtain a Certificate of Compliance (C of C) if the property has a Section 8 tenant. But you need to understand the process and understand why is is property managers don’t seem to know this.

How to Obtain a Detroit Certificate of Compliance

1. Register the house on the BSEED website.

2. Have a lead paint test and turn it in.

3. Pass a city certification inspection and turn it in.

Registration Process

Using that link, the landlord or the property manager will go on the BSEED website and declare themselves as the new owner of the house (or fess up to being an old owner!). It also has a place to fill in for the property manager. This is the address the city uses to send tickets and your actual Certificate of Compliance.

Important to know: The registration follows the owner. The lead test and the city inspection test follow the house.

Here is what the registration looks like:

And with that registration, BSEED sends a letter stating I now have 60 days to turn in my lead test and my passed city inspection report. But look at the highlighted part. Why do they say this, when it’s not true? I will tell you my theory as you read through this.

The Lead Paint Process

The lead paint test runs around $500. The city has their own inspectors or you can email my guy, Kevin McNeill. kjmcneill@msn.com.

In Detroit the houses were mostly built before 1978 which means they all were painted with lead paint. In order to pass a lead paint test, you just need to prove the paint was “abated.” That means that it was painted over with the new paint that doesn’t have lead in it. Every three years you need a renewal test. The lead inspector comes out and says, “Yep, no new chips. All good.” He still has to test all the paint and send it to a laboratory, but he doesn’t have to remeasure your house so the charge is typically $100 less.

Our lead guy Kevin comes to the property and checks inside and outside for chipped paint. The biggest issue comes with old windows. When they go up and down, paint dust settles. If that paint dust has lead in it, then you fail the inspection. Kevin lets us know if he suspects a house will fail anywhere so we can know what to fix before he comes back. Fortunately, we’ve never had to go through that whole lead abatement process where you have to follow a bunch of environmental procedures of taping and tarps and — I don’t even know what. I’ve just heard it can be a $10,000+ issue if your lead person fails you. We typically have all new windows in our houses or we make sure any old ones are freshly painted before Kevin gets there. Another part that can fail is the exterior. We try to wrap the trim in aluminum so paint doesn’t chip in the future with our harsh Michigan weather. When we renovate houses, the interiors are all freshly painted so chipped paint has never been an issue for us.

Once you get that report (2” thick"), just email that to BSEED at pm@detroitmi.gov.

The City Inspection Process

On the BSEED website you can link out to find an inspection company to come do a city inspection. We like that these inspectors are NOT city workers. They actually follow the book. The inspections are very predictable. For a single family home it costs $159 ??? to have the inspector come two times. The first time, he will tell you what to correct. The second time he will affirm it was all corrected. Once that second test is done, it’s submitted to the city at pm@detroitmi.gov.

By the way, don’t expect anyone to answer inquiries through that email address. I’ve tried. But I’ve submitted passed inspection reports and about a month later a Certificate of Compliance comes in my email and then they mail it again in snail mail.

Here is the direct link to the inspection company we have always used.

The Section 8 C of C Process

Let’s say you buy a house with a Section 8 tenant in it. In order to be compliant, all you have to do is go on the BSEED website and register so they know you now own it and they know who your property manager is. Remember, the registration follows the owner.

Then you send them the page from Section 8 that states that you passed the inspection. Use that email pm@detroitmi.gov. “Here is my Section 8 proof that I passed the inspection. Will you please send me a Certificate of Compliance”?

AND THEY DO! No city inspection. No lead paint test. BAM!

Here is what the Section 8 passed inspection report looks like:

I sent them that form and about a month later they sent me this:

Where it Gets Tricky and Property Managers Capitalize on Owners

Let’s say I sell you a house that already has had the city inspection and the lead paint test and it even has the C of C. So you do what you’re supposed to do and register it. The city needs to know who owns the house.

Wouldn’t you think the city would take an extra step and say, “Oh, I see, here, you have a C of C.”

No, the city doesn’t do that. They see a new registration, wait 60 days, and pick up the phone and call their inpsectors, “Hey, got one for you. Go ticket this one for not having the C of C.”

If you buy a house with a Certificate of Compliance you need to CALL BSEED and tell them to please attach that C of C to your new registration. They won’t do it unless you specifically ask them.

The trick: You have to ask a SUPERVISOR. The receptionist who answers the phone regularly gives false information and never seems to comprehend my questions being asked. You have to get past her to a supervisor. Good luck with that. She gets MEAN if you ask her for a supervisor.

I believe property managers don’t bother, don’t know, or would rather not know all this. I believe they see a new owner, they register the house, they automatically start the C of C process (scheduling thelead inspector and city inspector) and BILL THE OWNER for all the time they have to spend doing this. I’ve seen anywhere from $500 to $1,100 to schedule these things to be done. And you better believe you also have to pay the $160 city test and the $500 lead test on top of the property manager’s fees to coordinate the process.

And why on earth would anyone know or care to find out that simply sending a passed Section 8 inspection letter to BSEED will result in a C of C? The property managers don’t know or don’t want to know because they have nothing to gain knowing this. How can they bill you from $500-$1,100 for something as simple as typing in a registration (10 minutes max) and emailing that passed report (another 1 minute)? Or maybe they don’t know because they got that same letter I did that states clearly Section 8 does not remove you from the other requirements.

Why Does the City Hide this Gem?

I have a personal theory. I used to be on the board of the Real Estate Investors Association of Oakland. We invited BSEED Director David Bell to come talk to us about this new initiative about a year ago that will take a passed Section 8 report in lieu of a city and lead test. He loves coming to our meetings and letting everyone know, “There’s a new sheriff in town and it’s ME and you better get in compliance or I WILL TICKET YOU.”

This time though he almost didn’t show up to our meeting even though he was our star guest. He came in late though and he seemingly reluctantly told us about the program. Then he said something like this, “I was hoping I could go to the Section 8 housing commissions with this wonderful new program and in exchange for making it easier for landlords to be in compliance, the housing commissions would give me a list of who all their landlords are,” basically so he could look up our names and send inspectors out to find our properties and ticket us, “but the Section 8 offices said they won’t violate the tenants’ privacy. Isn’t that ridiculous?”

It took us a minute to digest what he was saying and then we all had questions about how to get his office to acknowledge our passed test results. What do we do, Mr. Bell? His reply, “I’m not taking any questions. I have another dinner engagement I have to get to. Bye.”

My Final Words

I had to see it for myself. On that house at 4390 Marseilles, my own rental property, I was getting tickets. I found out my lawyer will take those tickets to court and do pretty well. I let him know I have a passed Section 8 inspection letter. What do I do? My lawyer went to bat for me and he got my tickets waived. I just had to email in the passed Section 8 letter. It worked! So I tried it again without my lawyer’s muscle. I chose another one of my Section 8 properties. This other one though hadn’t been inspected since since 2021. But I found out from the supervisor at BSEED that I spoke with that at the time they are accepting passed inspection letters dated all the way back to March of 2021. I think that’s what he said. But they took my old passed letter and a month later I received the C of C in the mail.

My advice to owners is to take matters into your own hand. Do the steps YOURSELF. Talk to the property manager about the fee to get a house city certified. Ask if there is a reduced administrative fee if the tenant has Section 8. Then follow up again and again and again until you have that C of C because YOU DO NOT WANT THOSE TICKETS!

Look What My Husband Did this Week!

I made this video and published it only to learn my husband didn’t actually do all that. It was our guys Jeff and Rafael who did the kitchen and updated the plumbing and electric and did all the painting. Pat did a lot of other work there I know. And I do know he installed the carpet himself. We used to have a floor covering business and Jeff was Pat’s assistant. It’s a lot of hard work installing carpeting. And Pat did it all by himself. I know that!

We moved in a cash paying tenant to this house. The owner of this property isn’t a fan of Section 8. He would rather take the risk of a newly vetted tenant. The young lady I chose for the property was very patient because we weren’t able to ever show her the place until it was almost move-in ready.

I pride myself on finding tenants before houses are even complete, but I sure don’t enjoy it! It takes a lot of relationship building that a normal property manager doesn’t have time for. I’m not in property management anymore so I’ll do it so we can hurry up and be done and cash out. But I’m truly BURNT OUT of it.

Not only did I have to convince this tenant that we’re legit people and not ripping her off, I also had to convince her dad who lives in Alabama. I was on the phone with him a few times too. He understood the process when I shared it with him. He turned out to be a nice guy, probably closer to my age. We related well! We had fun talking about these “young folks” who want instant answers because that’s what they’re used to with a computer in their hand at all times. There was just too much unknown for his daughter.

The daughter is happily moved in now. She had a brand new stove and refrigerator delivered. She called my husband saying she would have to return them though because she can’t get them out of their boxes or figure out how to “install” them. My husband, having newly “adulted” daughters of his own, took heart. He went over there, unboxed them and slid them into place and plugged them in for her. I guess he had to screw the gas piece on to the stove too.

Pat drove our daughter, Molly, to California. Here is their photo of the first mountains. Pat is beside himself he can’t help her with her appliances and moves to different apartments.

I introduced this new adult tenant to her new property manager. The first thing she did was complain about the construction material left in her yard that Pat has already told her is scheduled to be removed. She wants it removed NOW though. RIGHT NOW!

Did I say…we’re burnt out!

Another Cash for Keys Storytime: We're too nice!

We bought this house in April of 2020 from a widow whose late husband had bought this house when houses were really cheap in Detroit. Her husband moved his sister into the house. Supposedly the sister paid $600/month rent to her brother. We wonder if she really ever paid rent. We kind of doubt it.

Upon purchase we contacted the tenant and told her we were doing a gradual rental increase to $900 (still below market level but cheaper than going through a tenant turnover) if she decides to stay in the property. Yes, she would love to. And she even complied with the gradual rental increases. Not without a lot of fuss of course. We also let her know that we’d be working on the house.

Eventually the rent turned into a hostage situation that was pending the work and the schedule of the workers and the tenant’s work schedule. The phone calls escalated. Why isn’t it done yet? Why is my living room torn up? I want my bedroom a different color. When are you renovating the kitchen? I want to tell you where the cabinets should go. No, I want more cabinets. I can’t let them finish the bathroom because I’m going to work now. Why isn’t my bathroom done yet? I insist since you’re repainting it all anyway that my bedroom is hot pink.

This was MONTHS like this of way too much coordination with a difficult person who eventually stopped paying rent. We had repainted the interior, changed her bathroom vanity, put in a new bathroom floor, changed some windows. Many things! We even repainted her whole basement floor. But it wasn’t ENOUGH or FAST ENOUGH for this tenant. So she called the city that it was an unlawful rental. We were in the process of getting the house renovated so WE could call the city to make it a legal rental.

We had to pay the ticket and then we HAD to go finish the work with her in it not paying rent, just to pass the city inspection issues that came up. We came back into the house only to discover she had scuffed up every painted wall, let her cigarettes scorch the new bathroom vanity and the worst thing was she chained up her little dog to a pole in the basement where the dog urinated and defecated and ruined the newly painted floor.

That was the Last Straw!

We have a real problem with chaining up dogs. But add the rest, and she was BEYOND the point of SHE’S GOTTA GO! It is incredibly rare that we’ve ever bought a house with someone else’s tenants in it and it worked out for us. I wish I had just evicted her from day one. This cost us months of holding fees when the goal was to renovate it and sell it.

We finally got her to move AMAZINGLY on her own by offering her $1,000 cash for keys. We had an eviction notice as well, but she didn’t wait out the court time. She found herself somewhere to live and off she went. Hallelujah!

I have a rental applicant now who wants to use it as an elderly group home. I usually do not consult with my buyer about tenant placements. It’s my specialty to know whom to choose, but in this instance, it felt right to consult with the new buyer. This is something new for us to rent to a group home. The buyers have approved. So this will be interesting. I won’t be the property manager, so I may not know. But I was able to get $1,200/month rent, which is really at the top of the rental market these days for a 3-bedroom house in Detroit. Having it listed at $1,200/month was attracting large families with large Section 8 vouchers. The house just wasn’t large enough for that many bodies in my opinion.

Lessons Learned

I don’t know! I don’t do gradual rental increases anymore. That buys too much time for the tenant to do what they were going to do anyway while we wait and see. I would have liked to have just evicted her. I’d like to be that person who can not be swayed by anyone and just handle business. Get them out so we can renovate the house and if they qualify, they can rent from us again. That’s what’s best for business. But then I meet the people and I don’t have the heart to do that, even though history has proven it’s the best idea. Really, I just don’t want to work with tenants anymore. We’re too nice! It doesn’t seem to help us in the long run or even the tenants who take advantage of us. Tenants need to be renting places they can afford. We can’t afford to do low rental amounts. There’s no profit in it. We don’t work for free. Sure seems like it sometimes though.

I Don't Normally Do THIS!

These are NOT properties we bought, renovated, found tenants and sold to an investor. We DID sell this investor a house, but then he wanted some multi family units and he bought these. But he is having trouble finding tenants. He called me to see if I can help.

I’m working with one of my favorite Detroit property managers, Doyenne Detroit, on finding a tenant here. I made a video tour and I posted the ad on Zillow. We’ll see what happens.

Live Calls with Section 8 Applicants -- Voucher Amounts and Confessions — Theirs and Mine!

I spend A LOT OF TIME talking with Section 8 applicants to figure out if their voucher will cover the amount of rent I need to get. I totally understand why property managers avoid Section 8 applicants. It’s too much time and too much expertise required to know the right questions to ask.

Section 8 voucher holders will be so happy to have a voucher and they come out of their intake meetings completely confused as to the amount of rent their voucher will really cover.

I made the following video hoping to clear it all up.

I was disheartened to read a comment from this video that said it was still confusing. I think if the person had read the blog explaining all the concepts, it would have been more clear.

See my blog How to Interview a Section 8 Voucher Holder — Does Their Voucher Cover the Rent?

My solution to the scathing comment was to allow viewers to see me do this live, mostly unedited. Here it is!

It was quite the experience to see myself do this. I wiggle a LOT! I’m very distracted by my hair and by the people outside with chainsaws. I spend A LOT of time talking with people.

I see that the more time I invest speaking with someone, the more I want them to work out for the house. I have to walk away from the conversation to go over the Red Flags and realize they are absolutely not a fit for me. I know this. But on the spot, I don’t see it fast enough. I like people too much and I don’t want to hurt their feelings so it’s not my nature to end the calls fast enough for what is practical. But I’m okay with that. I do feel it’s my missionary work in life to help people with housing. If the only way I can help is to get them to understand their voucher amount, then that’s something. I can’t rent to everyone though. I also have an obligation to the owners of the house.

What Caller #1 Was Really Saying

I liked this woman! This one was hard for me on a personal level because I have to deny her.

I am grateful I was able to explain her voucher amount to her. though at least. She said she had a $1,200 voucher from Plymouth Housing and two “little girls.” Two girls means one bedroom. She possibly only has a two-bedroom voucher. From my experience, that means her voucher amount would be $1,000. Plymouth Housing never has given people vouchers for enough rent. They are saying she has a $1,200 voucher, $200 of which will be minused off if the landlord doesn’t pay for gas, electric, and water. But maybe Plymouth Housing has finally figured out that their applicants are ending up in slum houses because their voucher amounts are too low and maybe they have started to notice rents have increased so Plymouth Housing has increased their voucher amounts. When I emailed the caseworker with details, I received an email back saying that even though the tenant has to pay all her own gas, electric, and water and has to supply her own refrigerator and stove, yes, her rent really could be $1,200.

What was interesting too about this one is that the applicant has to pay a significant amount of that voucher herself. She has a good job. I never did figure out from where though. Having to pay a high amount of the rent herself could be good or bad. Bad if she has a poor rental history. Good in that she appreciates the voucher and she appreciates her precious income so she takes care of the place.

With her income being so much, Section 8 has leeway on their 30% rule. 30% of a tenant’s income has to be used toward paying the rent. When a tenant has a good job and they find a house where the rent is more than their voucher allows, the caseworker can look at their income and decide if they will go up to 40% of the tenant’s income so the tenant can get the better house. That could be what happened here. Maybe they know she’s being evicted as well so they are allowing her to take a place for more than they normally would. I don’t really know if they know that though.

You can tell listening to the call that she was very interested in what I would find on my “free” search about her eviction history. She lied at first that it was all “settled.” But at another point, she called me and she was sobbing on the phone. This isn’t recorded. I could barely hear or understand her. She was telling me though that she was being evicted and she really needed a home.

She called me again too, which also wasn’t recorded, and told me she is being evicted, “to be honest,” because she wasn’t able to make the missing rental payments that the court set her up to make.

I really have a problem with people who used the pandemic for “free rent” and they also had a job. It’s so bizarre that the program was set up to give rental assistance to people who did not need rental assistance. Apparently, this applicant was able to get the COVID Emergency Rental Assistance (CERA) funds. The CERA funds only paid for two months of rent and she thought they were paying for five months of rent. Maybe her landlord just pocketed the other three months? Maybe not. But the tenant didn’t pay her rent when she was told it was due again. She ended up in court and she was given a payment plan. Then she couldn’t make the payments. By going MONTHS with the CERA money paying rent, I’ve noticed the tenants all changed their lifestyle. They didn’t save the money. They spent it! Once it’s time for them to pay rent again, so many of them can’t do it. I see this repeatedly from both ends; my own tenants and several applicants.

I felt horrible to hear her cry and she is so desperate to find a place. I’m really nice on the phone so she thinks she has a chance. Last night, speaking with her again, I told her I don’t even have her application and there’s no guarantee she will get the house. I’m not the only one making the decision. That’s what I told her. I really do typically make the final decision, but when I’m on the fence I’ll discuss the situation with the owner of the house.

This applicant still hasn’t applied. I think she’s looking for a less savvy landlord. She may be banking on the fact that her name hasn’t shown up yet in the court filings too. Or I missed it? Or I’m looking in the wrong court? I don't know. But I can’t rent to someone who used the CERA money and then didn’t pay rent. She owes way too much on her voucher to risk renting to someone who has a history of not paying rent.

I completely DREAD telling her she didn’t qualify. But I can’t ethically save someone who has a poor rental history. If Section 8 said she can afford $900 a month (or her HUD subsidized unit determined what she can afford), then that means she misappropriated her funds. She did this to herself. I still don’t enjoy telling people that.

What Caller #2 Was Really Saying

On this call, I was completely focused on her voucher amount. I’m also concerned I have that particular house listed at too high of a rental price. So I was very eager to qualify her. It’s like eating cookies. They’re so good at the time but I know I’ll be regretting that I ate them once I get to the gym and see myself in my leggings in the mirror. It’s OBVIOUS cookies make you fat. I know eating sugar makes you just want more sugar. But I do it anyway!

Her voucher amount was crystal clear. She already has been using Section 8. The rental amount at her current residence is exactly the amount I’m asking for my Promenade house. Not only that, but at her current residence, she is paying all her own gas, electric, and water. So simple. I was so excited. I wanted to gobble that cookie right up! Sign the lease. Let’s go! Let me put this behind me. No more phone calls. Let’s be done. So I suddenly became super deaf.

She immediately confessed that her house is full of cockroaches and mice. AND I BECAME DEAF? Seriously! This one is embarrassing. That’s like skipping the cookie and just eating the stick of butter that was used to make the cookie. I even set up a time for her to see our house. I almost allowed a woman with cockroach eggs on her shoes to come to our house. BAD! VERY BAD OF ME! But there was some divine intervention in our favor. She was a no show. Hallelujah!

When people have cockroaches, we have NEVER, EVER, EVER been to their house and wondered how on earth that happened. It’s obvious. They are dirty. They have crumbs everywhere. It’s like they have a million pets they feed. The crumbs are all over the couch, under it, on their bed. They clearly don’t eat at a table.

Not to say someone can’t get cockroaches and mice who is clean. It happens. I grew up on a farm. We had mice sometimes. I know my mom had to be super vigilant with crumbs and cleaning until she got them all. But they never overtook us.

What was funny about this one is that her property manager quit taking her calls. Or never took her calls? I’m guessing they figured out quickly that she was dirty and they decided to ignore her until she moves. These days with the slow courts it’s a lot easier than evicting her. They were getting her Section 8 rent each month too. If they evicted her, they could be required to pay it back from the date of the 30-day notice. By the time she made it to court, that could have been 6 months of rent they would be required to return. Just ignoring her was probably the fastest way to be rid of her.

I also found it pretty hilarious that they got a Ring camera for their Southfield office. Southfield isn’t Detroit. The crime isn’t so bad there. I do wonder if the Ring camera was because they didn’t want her walking in with her cockroaches that could fall out of her boots or pants or something and infest their office. Or maybe she’s just nuts and they weren’t going to let her in? I don’t know.

In Conclusion

I probably shouldn’t let you all see me doing these live! I sound like I’m considering these people. I DID consider these people. Then I woke up and didn’t eat those cookies!

Keeping it real! Let me know what you think. Be nice.

Cash for Keys or Go to Court or BOTH? How This Tenant Lived Free for Months!

Offering a tenant Cash for Keys is supposed to be a way to avoid going to court. The owner of the house wins by not having a nonpaying tenant in their house months on end while waiting on the courts who are now slower than ever. The tenant wins because they now have cash to put down on their next rental. It should work! It usually does work. But it did not work for us on this one!

I sent out letters targeting “tired landlords” in Detroit and I offered to buy their houses. The owner of this triplex said he had one vacancy, one paying tenant, and another tenant not paying and the house needs a whole new roof job and some windows. He sold us the property for a good price in May.

We were able to keep the paying tenant. I raised her rent from $400/month to $600/month. We cleaned out the vacant unit and she moved over to it. We then cleaned out her unit and I was able to find someone with Section 8 for $700/month rent.

Here is the video of the upper front unit that our $600/month person moved into:

As we cleaned out both upper units, replaced the roof and did a lot of other repairs, I marketed the house for sale and found a buyer from Peru. Now we just need it to appraise for the $150k. Detroit appraisals are all over the place. Appraisers use distressed properties as comparables because they cannot get into all the other sold properties to see if they really compare. Photos online are pretty limited. I’m feeling like it’s 50/50 if it will appraise at $150,000. But we can’t even get the appraisal until that lower unit is vacant and renovated.

Upon the purchase date of the property, I sent out my New Owner Package. This is the letter I wrote to the nonpaying tenant in the large 3-bedroom unit on the first floor.

I found this fun tool online that gives average and median rental prices. The first five searches are free. But we bought so many houses like this that I had to pay for the site so I could send this out in my new owner package to back up what I feel the rent should be.

In the New Owner Package I also sent a rental application and a 30-day notice. The 30-day notice is the eviction notice that says I’m not asking for money, I just am not renewing her lease. I never had a lease to renew anyway.

The previous owner had struggles with his property manager. He wasn’t even able to get security deposit money back from them to give to me. I had to put the security deposit funds in the closing so we had the money. Security deposits belong to the tenants and they are supposed to be kept in a separate bank account for when the tenant moves. We have done a cash for keys on other properties and if they left the house in perfect condition, we have given them back their security deposits too.

My Best Laid Plans Didn’t Work!

The tenant, Niesha, contacted me I thought to discuss her new rental amount or plans to move. Nope! It was to complain about our roofers using cuss words.

When I pointed out to her that her rent is due or is she moving, she was flabbergasted that I was asking for rent. She said, “There ain’t no way this here place is worth no $900 a month. I ain’t paying that never!”

I asked her if she planned on moving then and taking us up on our $1,000 Cash for Keys.

“No. I don’t have to move. CERA is paying my rent now due to the pandemic.”

The State of Michigan had a fund that supposedly dried up at the end of June called COVID Emergency Rental Assistance. The tenant and the owner have to apply together online. It can take over a year for the rental assistance to come unless there is an eviction pending. I explained to Niesha that I did not apply for that so if there is any CERA money that is coming, it is on her to find it and give it to me. She owes me rent, not the State of Michigan. If her old property manager received the CERA funds, it’s the responsibility of the tenant to get my portion of it to me.

She said I’ll have to evict her then and good luck to me because she knows damn well that rent is paid by the State of Michigan these days and not her, the tenant.

I had to wait until that 30 days was up. I waited and sent the 30-day notice to my lawyer. It takes a month once the 30-day notice date is up to even get a court date. The courts are just really backlogged now since the pandemic apparently. At least in Detroit they are.

July Court Case #1

Every Landlord Tenant court case appears before the judge only to be automatically adjourned so the tenant can be assigned a “free” lawyer. 36th District Court in Detroit hired a bunch of lawyers to represent tenants who are living for free off their landlords who are still paying for taxes and insurance and upkeep. But the landlords absolutely do not get a free lawyer. That wouldn’t be equitable.

August Court Case #2

These cases are all on Zoom and I let my attorney handle them. There is no need for me to be there. If anything comes up, he will call. And call he did! He let me know that the tenant had applied for CERA money and her attorney had the check sitting right there on her desk. The attorney couldn’t say how much the check was for, but there it is on her desk so how about we take that money and keep this woman housed?

At first my reaction was NO WAY! Niesha already refused to pay $900 rent which is already below market. She also is in our house so it’s nearly impossible to renovate a house when someone is in there living in it. Just look at my video of how filthy she lives. How could I sell a house with that kind of tenant in it? I cannot. I will not.

Then I started wondering how much money it is. Just the months I had her as a tenant is more than the $1,000 Cash for Keys I offered her. I could let Niesha have use of that rental money, as it was intended to help tenants, and pay myself back for the missing months of rent and offer her a better Cash for Keys price to move and have money for her next rental. Win-Win, right? So I said we’d take the money.

September — No CERA Money Arrives

In September that wonderful CERA money didn’t arrive. Meanwhile, my buyer was about to lose his locked-in rate for his mortgage as the mortgage interest rates were shooting up.

My attorney meanwhile was trying to get the check off the “free” lawyer’s desk. She wouldn’t answer his phone calls or his emails. My attorney let me know that any other of those “free” lawyers would have had it to us in a week, no issue. They have that ability. But this particular “free” lawyer was probably busy getting ready for her new job. She just won unopposed as a judge in Lansing.

My lawyer called for another court case.

October Court Case

This time I attended the Zoom hearing. Niesha’s free lawyer seemed very confused. What check? What client? What are we discussing here? She and my attorney went into a separate Zoom room and came back to me with this.

The “free” attorney knows nothing about a check on her desk. But because I said I would take that CERA money, that means I cannot call a bailiff in to evict the tenant. If I want to be rid of her, I will have to start the case all over again. Send her a 30-day notice. Wait another 30 days to get a court case. Then that case adjourns. Then there’s another court case after another month in which I say I’m not accepting the new State rental relief funds to keep her. Then I wait another month for the bailiff to remove her. By then we’re pushing a full year of this woman living for free in our property. Who knows how many months she lived for free before we bought the house?

So what did they decide? How about I just give the tenant that $1,000 I said back in May? Then she has to move out by October 14th. Give her half a month. She needs time, you know. I agreed. What else could I do?

But Niesha’s “free” attorney wouldn’t sign it. She went missing again. She was probably out shopping for judge robes. And my attorney had a box checked on there stating if Niesha wouldn’t move by the 14th that I actually could get a bailiff. My attorney knows the “free” attorney’s supervisor. So the supervisor signed it. It may not have been signed if the “free” attorney hadn’t done such a terrible job.

That’s why I ended up paying a deadbeat tenant $1,000 to move after living for free off us for the last five months.

The Moral of the Story

Buy houses in Detroit with a vetted tenant who isn’t using the government money to pay rent. I believe Niesha honestly thought she could live for free from now on. She even had a job and she wasn’t paying rent.

We sell houses to you AFTER we’ve been through this mess. When my Peru buyer gets this house, it will be with three paying tenants, two of whom are receiving rent from Section 8. That means the house will have had two Section 8 inspections as well. He will have a vetted property manager in place too. It’s a true turnkey when you buy a property from us.

Check out what I have for sale now:

Would you buy a $1,000 house in Detroit? Detroit Land Bank EXPOSED -- Dirty Deeds Done Dirt Cheap

Answer: Do not buy a $1,000 house in Detroit. Sounds too good to be true? Because it is!!! This house was purchased from the Detroit Land Bank by a tenant of ours a few years ago. I've been waiting to post the video because I don't want to expose her for making this poor choice -- that's what I think! But I have been told in no uncertain terms that it's all a matter of perspective.

A Detroit resident who is struggling to raise her children with an income slightly above minimum wage saw this as her opportunity to never have a landlord again. This could be 100% hers for only $1,000. She understood that it needs some work.

We bought a house she was renting. My husband and I buy houses in Detroit, we renovate them, we place a tenant, then we sell the property to investors.

This tenant in our latest acquisition told us she would move out shortly. She just needed to get this $1000 house to pass the Detroit Land Bank inspection rules so she could move in. After a few months of waiting on her to move out of our house, I asked her if we could see the $1,000 house so we can get a better idea of how long it would take her to move out of our house. She kindly let us.

When we saw just how much work it would need, I thought I'd be helpful and let her know that for that kind of money she could buy a fully renovated house with a mortgage. She did not appreciate my advice AT ALL! Her goal was to not owe anyone anything for where she lived. Having a mortgage would be the opposite. She was actually pretty insulted by my unsolicited advice. I felt horrible. I crossed a line thinking I was being kind and helpful. I should have minded my own business.

We couldn't renovate our new renovation-project house with her in it, so we had to sell it. I let the buyer know the situation. It's been around two years ago now and we do not know how this $1,000 house turned out. Pat and I can't remember the address either, unfortunately. We'd love to drive by and see if she ever finished this.

The Detroit Land Bank has possession of 20% of Detroit properties. The good houses seem to be sold to friends and family of the DLB. They also knock down several distressed properties and sell the lots. Then sometimes they will auction off a bad property. The bidding gets ridiculously too high. But the lowest of low that they do is sell a house like this to a Detroit resident. It should be a knockdown. But it costs around $10k to knock a house down. Selling it for $1,000 and collecting years of taxes is better for the city apparently.

Our tenant who bought this house was always under DLB inspection deadlines. You can see where the walls are open to expose her electric wiring. She had even bought a new toilet and fixtures for the bathroom only to have them stolen by her handyman. Her first electrician robbed her blind too. She seemed to be a target in so many ways. And she is the nicest woman too. She works in adult care facilities and risked her job to expose their sexual predator hiring practices. She does yearly backpack drives so the kids of Detroit have backpacks every fall. That's what she was doing the day I filmed this two years ago.

I hope things have turned out for her. I do not know. I'm afraid to ask after I really insulted her with my suggestions.

If you want to buy a fully renovated & rented house from us, check out what I have for sale now:

Will Local 4 News Help Me Hank Consider Helping Us Good Landlords?

Where is our local hero Help me Hank when good landlords cannot get bad tenants out of their houses? The landlord who sold this house had to sell it to us at a deep discount because he knew we would have to remove this horrible tenant who was letting her dogs destroy the house. We finally got the tenant out only to learn her dogs were left there eating through the bedroom door and leaving feces in the basement. It took us a good four months before she and her dogs were gone so we could renovate the house.

I have never heard of a city inspector removing a tenant from a home that was uninhabitable because the landlord couldn't get her out fast enough. We have dealt with bad tenants for MONTHS waiting on the courts to remove them. It is currently a good 3-4 month process to remove a tenant.

I now have a well-vetted Section 8 tenant moving in. I checked out her current rental to be sure she doesn't live anything like the prior occupant of this house. The Section 8 rent is really good! Check out my website for more details. I have other houses for sale as well.

Hey, Hank! You ought to make an episode of how much landlords are hurting these days by the courts. The city inspections don't bother us. They seem fair enough. They're only a problem for slumlords. There are good landlords out here! But there sure are bad tenants getting away with living in our properties for free as we pay insurance, taxes, and upkeep. I've been waiting on CERA funds to help me with one of my tenants now since July of 2021. How about a Help Me Hank about the backlog at Wayne Metro Housing? That's hurting a lot of us. Or the backlog at Detroit Housing Commission. I've been months without rental payments because they lost one of their extremely low-paid caseworkers. Now I cannot rent to anyone with a Detroit Housing voucher because I know they are a mess there. Those voucher holders are really hurting too.

5 Things I Would Never Do If I Were a Renter -- Not What You Think!

I'm amazed at how many people do these things and they think I will be happy to rent to them or happy to renew the lease. Tenants are usually focused on no evictions or felonies, but I will take a felon over most of these things, depending on the situation.

1. Bad Manners When Viewing the Home

1. When an applicant comes to see the house, if they have their phone against their ear the whole time I'm showing them the house, they will never ever EVER get to rent that house from me or from any other landlord I've ever met. Also if they walk through and point out things that we haven't finished yet such as a missing plate cover or something they deem Section 8 will not pass, pointing that out to us is OBNOXIOUS, not helpful. We are the ones in construction. And we have been through way more Section 8 inspections than they ever will. We won't rent to people who point out what is wrong with the house on the first visit.

2. Incomplete Rental Application

2. Leaving an application incomplete. When landlords do not like an applicant for any reason at all and the landlord really doesn't want to get into it with the applicant about why they won't accept that person, the go-to denial reason is "incomplete application." The real reason is probably one of these five things.

3. Cause Public Record

3. I wouldn't do anything that would cause a negative public record. Tenants are so surprised that I won't take them if they have a track record at the courthouse that didn't end in an actual eviction. I look at how many times a person has had a landlord take their time and money to file against them in court. That's enough for me. If they were so annoying that the landlord had to use a judge to intervene, I will not rent to that person. I certainly won't take someone with an eviction either. I also Google the person's name. I've found all kinds of history on people just from a simple Google search. I also go to their Facebook page. Even if they are private, I can see their profile photos.

3.5. Call The City on a Landlord

3.5. I understand that there are slumlords out there and the only way a tenant can have things fixed in the house is if they call the city on their landlord. But if I find out a tenant has called the city on the landlord, I won't rent to them. I've had over-the-top tenants call the city on us when we were in the middle of replacing their kitchen that we didn't even have to do. The tenant thought it would get us finished faster. It got her immediately evicted.

4. Be Difficult with Repairs

4. I would never be difficult about repairs. It is very difficult to find a repairman in the first place and to schedule with that repairman or contractor. Once we've achieved that, the house needs to be open to let that person make the repair. If a renter doesn't answer the door or isn't home as promised, we just don't renew the lease.

5. Forget to do the Inventory Checklist

5. I would be sure to do a thorough move-in inventory checklist with photographs of anything that I could be blamed for at the move out. Any ding at all, I would note and ask the property manager or landlord to sign off on it. If it ends up in court, the judge always asks for the inventory checklist. If I didn't have it, then I would have to pay for all the repairs.

But I absolutely would interview the landlord!

Just as landlords guard against bad tenants, tenants should guard against bad landlords and property managers. Watch this video with plenty of ideas of how to interview a landlord before renting from them.