I never took a sociology class in college. So, I’m not big on understanding people and having empathy isn’t really needed in business. Matter of fact, while helping others has always been part of my belief system; it never made my top ten list of things to do. I’m not an evil guy, I put money in the church collection basket, donate to the United Way, hold open doors for people, heck – I’ve even helped an old lady cross the street. However, our rental project is really having an effect on me. So far we have 6 families that rent from us. Slowly, we are getting to know each other.
Folks in Lower Price Hill aren’t used to having decent landlords. As I have mentioned before, this area is low income. They are the working poor. These are people that live day to day. Planning for the future means getting to the end of the week or month when their next check arrives. Any unexpected expense like a doctor bill or car repair throws their financial world out of whack.
A large majority has government subsidized housing vouchers and nearly everybody in the area rents. A few apartment buildings are controlled by large companies that have processes and run it as a business; they maintain the buildings but really have no relationship with the tenants. Most of the apartments and houses for rent are by smaller firms or individuals. They are absentee landlords with little involvement except collecting a monthly check.
If you are a parent, you know that if you leave a group of kids alone and never check on them, things will get out of hand quickly. What starts out as quiet play turns into rough housing and unintended destruction. Renters are no different. If you aren’t around to enforce the rules, things get out of hand. Just by being seen, talking to the tenants, and enforcing your rules, a visible landlord can maintain order.
We have a different approach. My partner’s office is in the neighborhood. Many of the guys working for him live here and I am around at least once a week. Steve & I have been cleaning up the buildings, and doing the maintenance that has been neglected for years. Like good parents, we do enforce the rules and try to keep as much order as we have power over.
Having said all that, sometimes you need to bend your own rules and this is where I am going to show a soft spot. I am starting to connect with our tenants. I am getting to know their stories and deep down want to help in some way.
Maurice lives with his girlfriend in one of our buildings. In his teen years, he got hooked on drugs, stole to support his addiction and ended up doing time in jail. He has been out of jail for several years but doesn’t have steady employment; typically he works odd jobs as a day laborer. Maurice does volunteer time working with kids to keep them off drugs and is trying to stay clean and out of trouble. I’m not sure if he has always been this way or if it was the drugs, but Mo’ isn’t the brightest guy. He seems to have limited cognitive function, difficulty staying on task and really doesn’t have any skills in maneuvering through the social systems that could help him. He is used to being beaten down by “the man” and accepts it as part of life.
Two months ago, Maurice didn’t show up with his rent, by the 5th of the month I decided to look for him. Like most folks, when faced with a problem that is overwhelming, Maurice decided to ignore it in hopes that it would go away. Unfortunately, not paying rent isn’t a problem that will go away. When I finally tracked him down, he explained that he hasn’t been working much and didn’t have the rent and offered to move out.
The way the system works I can evict Maurice for non payment of rent. This process takes about 6 weeks and legal fees run $350. His offer to move out would have been a big savings to me in time and money. The problem with that solution was that I liked Maurice and if he had no money to pay me, he wasn’t going to have any to move in anywhere else. I also knew that nobody was going to try to help him. I had already introduced him to a local community service, Santa Maria, to try to help him with housing assistance and moving at this point might hold up any help he would receive.
In the end, we decided to split his rent over a few weeks. The only cost to me in spreading out his rent is timing of payments which isn’t that big of a deal and it was a big relief to Maurice. Only time will tell if Maurice will honor his word of if he tries to take advantage of my flexibility. I am hoping he continues to try to help himself and if I can provide him a little support he may be able to improve his life.
I am probably naive in thinking that I can make a difference. I honestly expect Maurice to take advantage of my kindness and try to slide on his rent. I doubt he has ever had someone provide him any generosity without a condition. In a way Maurice is no different than any of us and the acceptance of unconditional giving is really difficult. By nature, we are trained to be suspicious of kindness. How often has someone offered you something and you rejected it, not because you didn’t want it but because you were afraid of what would be asked of you in return?
Nov 25, 2009
Nov 10, 2009
What does it take to get rid of a 70 year old pimp?
To move forward, I need to take a step back and explain a little bit about my business partner, Steve. Steve owns a remodeling company and his building is about a block away from the apartments. So it’s a great fit for us. I have a background in business management and Steve understands construction. Between us we have the skills to run this micro business and what we don’t know we can probably figure out.
One of the interesting things about Steve’s business is that nearly all of his employees are from the neighborhood. I’m sure that has good and bad associated with it, but for our little adventure, being known in the neighborhood, at least by association is a good thing.
We closed on our purchase in the middle of July and before the month was out we ran into our first tenant problem. Our building we call “649” is a 2 story brick building built in 1900 that was a very large house with a nice courtyard in the rear. Over the years, it’s been converted a number of times and in it’s present shape it is now configured as 4 one-bedroom apartments. Unit one is accessed from the street. Units 2, 3 and 4 come in off the side entrance with 3&4 on the second floor.
When we bought the building Rick and his girlfriend live in unit 1, 2 & 3 are vacant and unit 4 is occupied by a guy I'll call Pops. Pops is a thin, gray haired old man, probably over 70, who smokes heavily and since his electric is cut off, likes to sit outside on the street during the day. Good old Pops, likes to leave the side building door open for ventilation during the hot summer days and it's the side door access that is causing some trouble.
We ran into a few speed bumps with Pops right away. He hadn’t paid July’s rent which was included in our deal when we closed on the property. Pops had a reason for not paying saying that he was going to make some money soon and gave us a promise for some part of it in the near future. What we didn’t know is how Pops made his money. Apparently, our geriatric tenant liked to break into apartments 2 & 3 and let female "associates" sell their wares out of our building. Yep, Pops was a 70 year old pimp hustling for cigarette money. Actually, the girls were junkies doing tricks for crack and Pops got a cut for being nice and letting them into the building.
This all came to light one Saturday night when all hell broke loose. I guess the tricks were making a lot of noise in the building and woke up our tenant in Unit 1, Rick. Rick came out of the building in his underwear ready to fight. The next thing you know the cops are there. Unfortunately for us, nobody go arrested and things calmed down for the rest of the weekend.
I’m in Steve’s office on Monday and in walks Rick (at least he had clothes on). He was very animated about all the “going-ons” over the weekend and wanted us to do something. Unfortunately, since there were no arrests we couldn’t kick Pop's out for breaking the lease. Rick wasn't too thrilled with our lack of action but we knew we had a problem that was going to need a creative solution.
I’m not sure exactly how the idea came up, but I got to thinking that we should treat this like a business problem. How do you get rid of a competitor? You take away his business. How do you do that? - You provided better services or drive away the customers. Opening Eric’s land of pimpdom across the street wasn't really an option, Instead we decided to make it hard for the "customers" to get some privacy when they did the nasty.
With a plan in place, we went to apartment 2 & 3 put in new locks and sealed each door with a thick slab of plywood. Hurricane Katrina wasn’t going to blow down that door and for damn sure neither was a 70 year old pimp. The following weekend came and went. When I ran into Rick he was all smiles and talked about how quiet the neighborhood got. It seemed that the girls didn’t like doing it in the hall and found another place to operate.
It’s funny how something like getting rid of the ladies can make a difference. Fran, my Partner’s office manager stopped by the corner store to buy a soda. This is the same corner the girls used to work. The middle-eastern owner asked if Fran’s boss had any thing to do with getting rid of the girls – when she said yes, he was so excited and told her about how his customers could come more frequently now since they could avoid the working girls. He was so pleased, when Fran tried to pay for her drink, he refused her money exclaiming “Free soda for you”.
While the commotion slowed down, it took a while to get rid of Pops. We had to hire a lawyer and go through eviction proceedings. Fortunately (in an odd way), since Pops never paid any rent we were able use that as the reason to kick him out. In the end, it cost us a bundle on an attorney and we looked like mean landlords when we said "No" to the judge when a very clean, frail looking old man asked the judge if he could stay. But by getting rid of Pops, we cleaned up a corner and hopefully made a difference for a few good folks who live and work there.
One of the interesting things about Steve’s business is that nearly all of his employees are from the neighborhood. I’m sure that has good and bad associated with it, but for our little adventure, being known in the neighborhood, at least by association is a good thing.
We closed on our purchase in the middle of July and before the month was out we ran into our first tenant problem. Our building we call “649” is a 2 story brick building built in 1900 that was a very large house with a nice courtyard in the rear. Over the years, it’s been converted a number of times and in it’s present shape it is now configured as 4 one-bedroom apartments. Unit one is accessed from the street. Units 2, 3 and 4 come in off the side entrance with 3&4 on the second floor.
When we bought the building Rick and his girlfriend live in unit 1, 2 & 3 are vacant and unit 4 is occupied by a guy I'll call Pops. Pops is a thin, gray haired old man, probably over 70, who smokes heavily and since his electric is cut off, likes to sit outside on the street during the day. Good old Pops, likes to leave the side building door open for ventilation during the hot summer days and it's the side door access that is causing some trouble.
We ran into a few speed bumps with Pops right away. He hadn’t paid July’s rent which was included in our deal when we closed on the property. Pops had a reason for not paying saying that he was going to make some money soon and gave us a promise for some part of it in the near future. What we didn’t know is how Pops made his money. Apparently, our geriatric tenant liked to break into apartments 2 & 3 and let female "associates" sell their wares out of our building. Yep, Pops was a 70 year old pimp hustling for cigarette money. Actually, the girls were junkies doing tricks for crack and Pops got a cut for being nice and letting them into the building.
This all came to light one Saturday night when all hell broke loose. I guess the tricks were making a lot of noise in the building and woke up our tenant in Unit 1, Rick. Rick came out of the building in his underwear ready to fight. The next thing you know the cops are there. Unfortunately for us, nobody go arrested and things calmed down for the rest of the weekend.
I’m in Steve’s office on Monday and in walks Rick (at least he had clothes on). He was very animated about all the “going-ons” over the weekend and wanted us to do something. Unfortunately, since there were no arrests we couldn’t kick Pop's out for breaking the lease. Rick wasn't too thrilled with our lack of action but we knew we had a problem that was going to need a creative solution.
I’m not sure exactly how the idea came up, but I got to thinking that we should treat this like a business problem. How do you get rid of a competitor? You take away his business. How do you do that? - You provided better services or drive away the customers. Opening Eric’s land of pimpdom across the street wasn't really an option, Instead we decided to make it hard for the "customers" to get some privacy when they did the nasty.
With a plan in place, we went to apartment 2 & 3 put in new locks and sealed each door with a thick slab of plywood. Hurricane Katrina wasn’t going to blow down that door and for damn sure neither was a 70 year old pimp. The following weekend came and went. When I ran into Rick he was all smiles and talked about how quiet the neighborhood got. It seemed that the girls didn’t like doing it in the hall and found another place to operate.
It’s funny how something like getting rid of the ladies can make a difference. Fran, my Partner’s office manager stopped by the corner store to buy a soda. This is the same corner the girls used to work. The middle-eastern owner asked if Fran’s boss had any thing to do with getting rid of the girls – when she said yes, he was so excited and told her about how his customers could come more frequently now since they could avoid the working girls. He was so pleased, when Fran tried to pay for her drink, he refused her money exclaiming “Free soda for you”.
While the commotion slowed down, it took a while to get rid of Pops. We had to hire a lawyer and go through eviction proceedings. Fortunately (in an odd way), since Pops never paid any rent we were able use that as the reason to kick him out. In the end, it cost us a bundle on an attorney and we looked like mean landlords when we said "No" to the judge when a very clean, frail looking old man asked the judge if he could stay. But by getting rid of Pops, we cleaned up a corner and hopefully made a difference for a few good folks who live and work there.
What the Hell was I thinking?
The adventure began simply enough with a phone call from a friend who wanted my opinion on a business opportunity. So I asked the natural next question, ”what kind of investment?
“Rental property” Steve said.
“Really, – where?”
“near my shop.” was his reply.
Near my shop was code for a part of town that was a little seedy, Lower Price Hill. Actually, it is one of the more dangerous parts of town, with lots of interesting characters and not a lot of legal money.
“okay, I’ll come along, BUT- I’m not interested”
Well, the next thing I know I am walking around some very run down properties, feeling like I needed a bath in hand sanitizer. Then we started talking about the economics of rental property. The tenants all have a voucher from HUD so that their rent is paid. There is a shortage of qualified housing. The building costs were low and would be cheap to run if manage correctly. It wasn’t long before my mental spreadsheet was busy calculating the operating income and payback on capital and it became a clear financial winner.
“I can’t take this on by myself”, Steve said thinking aloud
“hmmm, if I handled the books and never came back, this might be interesting”, I mumbled.
And with that, we started down the road to become our own version of Slum Dog Millionaires.
This is a business; I had no intention of treating it any other way, but somewhere along the lines, things changed. I don’t know if it was when I found out that my family live in the neighborhood in the 20’s & 30’s when it as a working class neighborhood. It might have been when I met some of the people. It could have been when I fell in love with some of the old buildings. It really doesn’t matter what changed, just that something did and I started to become involved in trying to make a small difference in one community.
I was (and probably still am) naive about what I have taken on. I guess if I had a good idea of what I was in for I probably wouldn’t be doing it.
Our plan is to rehab the buildings converting several of the 1 bedroom units to 3 bedrooms, clean up the trash- literally the back yard & basements are full of it – and start renting them out within a few months. As you would expect nothing is going to plan and it is the speed bumps in the process that are making it interesting. Hopefully, you find them interesting too.
“Rental property” Steve said.
“Really, – where?”
“near my shop.” was his reply.
Near my shop was code for a part of town that was a little seedy, Lower Price Hill. Actually, it is one of the more dangerous parts of town, with lots of interesting characters and not a lot of legal money.
“okay, I’ll come along, BUT- I’m not interested”
Well, the next thing I know I am walking around some very run down properties, feeling like I needed a bath in hand sanitizer. Then we started talking about the economics of rental property. The tenants all have a voucher from HUD so that their rent is paid. There is a shortage of qualified housing. The building costs were low and would be cheap to run if manage correctly. It wasn’t long before my mental spreadsheet was busy calculating the operating income and payback on capital and it became a clear financial winner.
“I can’t take this on by myself”, Steve said thinking aloud
“hmmm, if I handled the books and never came back, this might be interesting”, I mumbled.
And with that, we started down the road to become our own version of Slum Dog Millionaires.
This is a business; I had no intention of treating it any other way, but somewhere along the lines, things changed. I don’t know if it was when I found out that my family live in the neighborhood in the 20’s & 30’s when it as a working class neighborhood. It might have been when I met some of the people. It could have been when I fell in love with some of the old buildings. It really doesn’t matter what changed, just that something did and I started to become involved in trying to make a small difference in one community.
I was (and probably still am) naive about what I have taken on. I guess if I had a good idea of what I was in for I probably wouldn’t be doing it.
Our plan is to rehab the buildings converting several of the 1 bedroom units to 3 bedrooms, clean up the trash- literally the back yard & basements are full of it – and start renting them out within a few months. As you would expect nothing is going to plan and it is the speed bumps in the process that are making it interesting. Hopefully, you find them interesting too.
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