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by Mike Butler

money down the drainJust like computers crashing, tenants dealing dope is simply a matter of when it will happen and not if it happens. There are no boundaries.

Although the media tries to portray it occurring primarily in low income neighborhoods, dope is everywhere and dope dealers are part of our society at all levels. Your rental properties are not immune. I don’t care if the rent is $100 month or $5,000 month, dope dealers live in all areas.

This dope dealing animal is something that can sneak up on you. You can have the best tenant screening program in the world; however, tenants are people. People have relationships. Some work out and some don’t. Jerry Springer, Maury, and many talk shows have made fortunes capitalizing on the hidden aspects involved in relationships.

Why are your tenants any different? They are not.

A tenant can start off down the right path with you, have a falling out with their significant other and get swept off their feet with their new found ________. (You fill in the blank.)

Because your tenant has a good track record with you, you may or may not be aware that the old significant other has moved out and another has moved in. Your good tenant is responsible, has a job, handles responsibilities properly and shows no signs of any pending or brewing problems. The point I am trying to make here is no landlord is immune from having dirtbag dope dealers as tenants. Therefore, this is for all landlords of A,B,and C quality rental units.

Next, you get the dreaded phone call or a note from the good tenant in Apt 3 who confidentially reports the tenant in Apt 2 is selling dope. If the landlord doesn’t fix this problem yesterday, they will be moving out. This is contagious. If this information has made it’s way to you, you better believe it has saturated the entire building. You should thank this good tenant for letting you know. This tenant lives close to the dope dealer. I am shocked at how landlords ask this good tenant for their help. Landlords repeatedly unknowingly drop in the good tenant who gave them the helpful but bad news.

Never ask your tenant who gives you this information to help you by putting them out front as the source of reporting the suspected illegal activity. It took a great amount of courage and loyalty to you to inform you of the problem. The easier path for your tenant is to simply move from your building. If one tenant is reporting this to you, you better be aware that many more good tenants are fed up, scared, and ready to move at a moments notice without any visible action on your part to correct the suspected dope dealing problem.

The ChallengeFinding something to evict a tenant suspected of permitting dope dealing is a monumental task. Dope dealers usually have cash. In most states it takes two months or more to forcibly remove tenants from a unit without a legal challenge. This is way too long to satisfy your good tenants¦ they will be gone before the bad apple gets evicted. Let’s run the numbers with a standard eviction process. First, if the bad apple is paying rent on time, you must find another reason to evict them. Assume they are on month to month. Isn’t it fair to assume two months might be average before they are 100% gone and you have possession. This means a minimum of a month of ugly and they will not pay rent if you are pursuing legal action to make them move. (There is month’s rent).

How many good apples may take action and move because they see no visible action on your part to get the bad apple out quickly. (Now, there is month number two of rent, along with two vacancies and tenant turnovers¦yuk.) The entire eviction process costs are usually in the neighborhood of a month’s rent with attorney fees, court costs, sheriff dept. fees, and the labor costs involved with the physical set out or removal of their personal property from your unit. All combined, it is fair to assume at minimum, with this traditional process, you can expect to lose 3 month’s rent along with two vacant units and a label in the neighborhood of the building that has dope dealers.

Barney Fife ” Nip It In The BudTake Action, the right way. After evaluating the information received from your good tenant, and you realize they are probably right, it is time for you to take action before the bad apple ruins the whole bunch. Remember, the three month’s rent. Do not forget it.
Listed here are some tips you may put in place. Each depends on your comfort zone. I have used all of these in certain situations with good results. These tips are presented in a smorgasbord fashion and you may select the best for each situation as you see fit. The objective is to get the bad apple out fast while preserving the good apples.

Stuff To Do: Hit’em In The Face with a 2×4. Confront them face to face and ask them to move. This takes some skill and tact. My background is definitely helpful using this tactic.

There are some Do’s and Don’t’s…

1) Never accuse them of dope dealing.

2) Never “drop in” your good apples.

3) Present yourself as a Problem Solver, helper and solution for their problem.

What is their problem you might ask?

– Well, it’s just not working out.

– They may respond How or What?

– Your answer again is It’s just not working out and I want us to settle up on good terms.

Avoid setting the stage of getting into a debate or he said, she said story. If you know for a fact, 100% sure, that traffic in and out of their unit has increased, then you may choose to say I have noticed a lot of people in and out causing noise to others. This is a delicate statement because it can open a can of worms and they may ask you When did you see this? If you know your stuff, you can recite it back to them; but be careful using this one. Offer a win-win solution for the bad apple with a comment like “Look, it is not working out and I have an opportunity to help you allowing us to settle up on good terms. If we both are stubborn and attorneys and the courts get involved, we both lose, and the attorneys win. They try to make a mountain out of mole hill. You find a place to move and be out of here by next Saturday (select reasonable time) and have this place broom clean and I will pay you $ X dollars. (I usually gear it toward a dollar amount close to a month’s rent).

Bite Your LipDo not allow your principles to confuse you about good business sense. If you can pull this off successfully you win big time across the board.

You have removed the problem.

Good tenants label you a hero.

Saved two months rent or more!

No eviction headache or attitudes.

Preserve integrity of your building.It takes special people skills and tact to use this action properly. If you have a quick temper or are hot headed, you may want to avoid this face to face procedure. You must appear firm, fair, and helpful to the bad apple regardless of the level of your blood boiling.

Effective Results with Police Yes, still do the traditional call your local police department and in larger communities phone the narcotics unit; but, let’s put a different twist on getting effective assistance from law enforcement. Many large apartment communities offer free rent or discounted rent to a police officer to live in their apartment community. This is nothing new and happens all the time. The real problem with this scenario comes from the police officer. These types are generally hungry for money, fairly new, and are not homebodies. They work as much overtime and off-duty jobs they can find resulting in very little visibility in your community. After determining prime time for the suspected dope dealing activity, make it a point to inconvenience yourself for a little time to contact the officer who rides the beat of your problem tenant during the hours of peak activity. For example, if peak activity is learned to be Friday and Saturday night between 10pm and 2am (which by the way, is a very busy for uniformed police) you should make arrangements to meet the officer who rides your beat during his scheduled shift. Ask to meet him somewhere other than your rental property. This does cause you and inconvenience, but sure demonstrates to this officer the seriousness of your concern.

Never tell the officer he/she has a problem at your property. Police are people too. Many taxpayers talk down to police officers with comments such as You work for me, I pay your salary. This sure flips on the us and them mindset and you have already lost. Believe it or not, most police officers really do want to help. If this is a motivating factor to be in this occupation, use it to get results for you. Start your conversation with an attitude of I need your help. I have a problem. Do more listening than talking. They feel better if they talk. They will like you if they talk. If you do all of the talking, you will feel better and they may be tuning you out. They hear this stuff all the time. Be patient. As a rule of thumb, the longer you let them talk and demonstrate their knowledge to you, the more apt they are to offer out of the ordinary assistance to your problem while working their shift. Your property will get extra attention and patrol. Do not ask them to ride by, stop by, or sit on your property. The challenge here is to get the officer to offer this you as a way for him/her to help. Offer the police officer a way to contact you if needed. Ninety percent of the time they will not call, but offering your 24-7 availability means a boatload to the officer working the late shift and shows your level of concern of the problem. Offer your cell phone or home number confidentially. These are some ways to get your tax dollars at work to help you solve the problem of the bad apple.

SignsMake No Loitering, No Trespassing signs and position the signs in visible locations on your building and premises. Before doing this, Make sure to contact your good apples and ask for their assistance. Explain to the good apples, once the signs are in place, they too can not hang out in the parking lot or porches. A short term sacrifice on their part now can help run off the bad apples now. When peace and tranquility return to your property, no one will complain if peaceful people are loitering on their porches.

Hiring Off Duty PoliceMany landlords have been encouraged to hire off-duty police. Many communities have take-home cars for their officers. Be Careful. This off-duty income opportunity for officers is greatly abused. Many schedule several off duty jobs at the same time. For example, construction site A, Shopping Center B, and apartment community C, are all paying for an officer to patrol their property between 9:00 p.m. and 2:00 a.m. and the officer schedules all 3 jobs during the same hours because they are within 3 minutes of each other. I am not anti-police. I am pro-police being retired myself and I have two little brothers who are police officers.

Empty Car, A Different TwistIf your town has take-home cars for officers, and if your peak activity of bad apple activity occurs after the sun goes down, contact an officer who works the day shift. Tell them you have a unique opportunity for them. Work out a deal to simply park their marked patrol car overnight right square in front of the bad apple’s unit. This can be done a whole cheaper than having an officer SIT in the car. The results are usually spectacular. Who wants to go buy dope from somebody with a marked car parked at the front door? You might get an officer to sit in the car for $25-$50 an hour and you might get the car for a whole night for $50 or $100 depending on your negotiation skills. The hidden benefit here is your good apples see immediate action on your part. The bad apple’s business should immediately begin to suffer and they should get the message to move on down the road.

Technology In addition to assistance from on-duty and off-duty law enforcement and No Loitering signs strategically placed on your buildings, technology can be a great inexpensive tool as well. Video Cameras are cheap. Not the camcorders you see in the retail stores, I am talking about CCTV cameras. Check them out on the internet at Supercircuits.com or simply use any search engine. Entire video systems with recorders sell for less than $300. Put them up high on corners of buildings and protective weatherproof and bulletproof casings are available. In addition to the No Loitering Sign, add Premises Video Recorded 24hrs.

Yes, this takes some effort to start up, running wires, installing a recorder in the resident manager apartment or office but it has tremendous rewards. Let your local law enforcement know about your effort and action of installing cameras. Your good apples will see your action. It will hurt the bad apple business but it will also be your powerful tool to prevent new bad apples from landing in your units.

Here in Louisville, a creative take charge investor has a number of units in a high crime area. After learning of a similar situation in a visit to Chicago, he became involved with the local cable TV company receiving not only permission to use their cable to be the conduit for transmitting the video images to the recorders placed in the office, but the cable company also installed the video cameras on the utility poles. With the new technology I do not understand, police officers can use their laptops in their car to dial up specific cameras to view. The point learned here is you may not have to burden all of the expense yourself, maybe your cable TV company, phone or other utility may contribute resources to help the community.

Mike is a focused, aggressive real estate investor, who takes pride in avoiding banks to buy investment property.

Mike realized early on he MUST have a strong foundation to grow quickly and safely. Mike has reviewed many property management software programs only to discover they fell short of what he needed. Mike has spent thousands of hours tweaking and researching Quicken and QuickBooks Pro. His method is getting the results that he needs.

In May 2002, Mike was invited to be a featured speaker at a regional conference of CPAs and the rest is history. His simple laid-back street level teaching style is easy to understand and benefits all levels of investors, from the beginner to seasoned veteran.

Successful investing utilizing tenant tracking and effective property management and bookkeeping techniques enabled Mike to retire in March 2000 after 13 years as a Louisville Police Detective.

He was featured in Money magazine, June 2001, in the article Can Real Estate Make You Rich?. Mike Butler is a Kentucky licensed real estate broker, a realtor, member of KREE, and a charter member of NARPM.

This post provided by REIClub.com. Copyright 2002-2011 All Rights Reserved. Published with Permission of Author. No part of this publication may be copied or reprinted without the express written permission of the Author and/or REIClub.com.

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