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FROM THE PRESIDENT - Patty Hofer
Our May meeting had two important speakers. Carol A Prombo, Ph.D is a Lecturer in Science at Washington University, a specialist in contamination control, daughter of a pediatrician, owner of a pre-1950's "charming" lead paint laden home, a parent and friend of many who own rental properties. Lead poisoning does not discriminate. "Until parents and all pediatricians start recognizing that all young St Louis -area children going to schools built before 1950 and/or living in pre-1950's housing are at risk, only mandatory universal lead screening of young children will identify these cases. How many middle-class children are being treated for "hyperactivity" and learning disabilities who wouldn't need to be if they lived in lead-safe housing and had been screened for lead? Screening, of course is only an interim solution. The real solution is to make all housing at least lead-safe and effectively lead-free."
Dr Prombo also cautioned those of us who are doing our own repair work to protect ourselves from inhaling the lead dust. She distributed a colorful, easily understood poster entitled, Keep the Lead Out.
I know you are tired of hearing about it, but so many property owners are ignoring the lead poisoning problem and it is not going to go away. The bare minimum for an owner is to give every resident the pamphlets and have them sign the appropriate forms. Disregarding this advice could cost you a $10,000 fine.
Our second speaker was Harry Bennett from St Louis Development Corporation. There is a big need for business space in the city. Obviously, the space must be in good condition and properly priced, but Harry has qualified tenants continually inquiring about locations for their businesses.
We had a short discussion about the current optimism in the air. Everyone wants to be in the city. Realtors tell us buildings are selling like hot cakes and apartments are renting immediately.
NATIONAL NIGHT OUT is Tuesday, August 1st. Residents throughout the city will join their neighbors and communities across the nation in celebrating safety and neighborhood improvement successes. Hopefully your property is in an area with a block captain and some organization to celebrate. If not become the block captain yourself and organize a small party for residents to get to know each other. Schnuck's Supermarkets send coupons for soda and snacks to registered block captains and attendees can bring food and beverages to share. Telephone Christopher Howard at 622-4628 for more information.
DAFFODILS need to be ordered before Labor Day. Operation Brightside (314) 781-4556 sells tulips, daffodils and day lilies at dirt cheap prices to finance the bulbs that are planted along the metropolitan highways. I think the hour I spend planting in the fall makes the property look so inviting in the spring and is well worth the $$s and time. Call today to request an order form.
ADVERTISE ON THE WEB. One of the great things about our web site is the opportunity to advertise your vacancies to the entire world for free. No need to write confusing abbreviations or leave out the apartment’s best features. Fifty percent of America is wired and our site is visited by hundreds every week. Talk to them. Please contact John Korst (314) 832-2057 as soon as you know a vacancy is coming up. We get requests for apartments often and I never know who has something available. The web site is a nice clearing house to get our properties rented fast.
Another request we all get is for contractor recommendations. We had a contractor list, but it needs updating so please call me with the names and telephone numbers of people with whom you have had good experiences. Obviously we still have the due diligence of interviewing references and reading contracts, but it would be easier on both sides if there was a list of dependable craftsmen and those craftsmen were aware that C/HH members pay promptly.

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ONCE-IN-A-LIFETIME DEALS - Robert L. Cain
They are the finds that people brag about for years to come. When you hear the story, it sounds almost like magic. You are almost tempted to hang around on the same street corner where it happened, or at least drive by there a lot. They are the bargains that just fall in an investor's lap. These are the properties that are 50 percent below market, in reasonable condition, and big money-makers from day one. You wonder how someone could ever get so lucky.
You think, "if he pulled it off, I could too!" Trouble is, these are deals that come along once in a lifetime. That's why your investor friend is still talking about it ten years later.
A successful investment program doesn't even consider stumbling across once-in-a-lifetime deals. If you're active, though, you will come across one (or even two) in your real estate investment career, providing you have trained yourself to spot them when they leap up at you. Without preparation, you couldn't spot a once-in-a- lifetime deal if it dashed out in front of you, tripped you, held you down and shoved a spreadsheet in your face proving its worth.
The two points I am maneuvering toward are: In order to get the good deals, one, you have to be out in the real estate marketplace actively looking at properties; two, you have to know a good deal when you see it, and if the deal is good for you.
Good deals happen to people who stir up the possibility of good deals happening to them. Sitting at home, wishing and hoping that the phone would ring where someone is calling you with a real estate bargain just doesn't get it. When the phone rings it's probably a phone solicitor asking "How are you today?"
The correct answer would be, "Not very well, nobody's called me with a once-in-a-lifetime real estate deal."
How do you get out in the market and find things? Lots of ways. You religiously read the real estate ads in the newspaper; you check the internet newsgroups and web sites for properties; you have your personal real estate agent looking out for you; you join landlord and real estate investment associations. The key is to actually talk to people and see properties.
Look at enough properties, and you'll spot a bargain when you drive up in front. In fact, many times just the ad will give you a giant clue as to what a potential money maker it is.
Another benefit is that you will get a concrete idea of the sort of property you want to buy. Every investor works off of different goals and ideas about the sort of investment properties that will work for him or her. For example, one investor buys nothing but small plexes. Another buys apartment complexes of 20 units or more. Still another buys single-family homes, with an occasional duplex thrown in. These are properties he or she feels comfortable with and equal to managing.
One investor plans on keeping the properties she buys for at least 15 years, so doesn't mind having to put some work into them. She calculates the dollar amount of the updating and upgrading into the budget. Another investor wants fairly quick turns. He almost never keeps a property more than five years. So he doesn't want to have to put much into them in the way of capital expenditures.
What kind of property you want to invest in and how long you'll keep it will become clear the more property you see and buy. With experience and preparation you'll start thinking in terms of making deals rather than happening across them. You'll become an investor who doesn't mind taking on a property that other, less-experienced investors have turned down, because you can spot the real value and potential; and you'll pass on some properties that the less experienced think are the "deals of a lifetime," because you know they aren't. It won't be long before you are bragging about the deals you put together, rather than the deals that "found" you.

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JUST ASKING . . . WHAT ABOUT SCREENING TENANTS?
Q: Whom should I screen?
A: Screen EVERYONE over the age of 18. If parents with children rent your unit and the child will turn 18 within the lease period be sure to get an application on that child also. If you ever need to evict or collect from those tenants, it will be much easier and safer to have as many adults as possible named on the action.
Q: How do I know employment references are real businesses?
A: Verify employment through "Yellow Page" information, rather than using the number supplied to you by the prospective resident. You would be surprised at how many friends verify(?) employment for their friends.
Q: How do I know the prospective tenant has the ability to pay the rent?
A: Verify the bank account balances, by calling the bank and asking if a check in the amount of the rent will clear the bank. Some managers will verify TWICE the amount, just to see if the tenant actually has "working capital" in the account.
Q: How do I know that this person is who they say they are?
A: Verify the applicant's identification with a photo ID. Make copies of the Social Security Card and the Driver's License for your files.
Q: Should I give the applicants the rental applications to fill out, and just have them return it later?
A: Completed rental applications should be filled out in your presence to avoid rental fraud.
Q: Will every credit report show the legal judgments this applicant may have?
A: No, make sure the tenant credit information that you receive from your vendor is complete and legal. NOT ALL JUDGMENTS ARE REPORTED TO THE CREDIT BUREAUS. MANY COURTS DO NOT HAVE THE MEANS TO REPORT DATA TO COMPUTERS AT THE CREDIT BUREAUS.
Q: What should I do if I decide not to rent to the applicant?
A: Turn down your prospective tenant properly. If requested, you must show the applicant a copy of their credit report, whether they are denied credit or not. You must also give a copy of the credit report to the tenant if requested. The exception to this rule, would be if you didn't charge the tenant a screening fee. Your turned down applicant is entitled to a free credit report and should be referred to your screening vendor for proper handling.
Short tips
* Always match picture ID to the prospective resident
* Use a pay stub to verify employment
* Make sure all applications are completely filled out
* Rather than use the phone numbers provided by the prospective resident, use the phone book to get phone numbers.
Tricks
When verifying your prospective tenant's information on the Rental Application call the references as if you are processing a Credit Application for a purchase, which you are, rather than a Rental Application. Remember that you are actually letting a tenant "borrow" property that sells for tens of thousands of dollars per unit. You are granting credit! Inexperienced landlords, who may be anxious to rid their complexes of a troublemaker, will be much more likely to give truthful information when asked, "did Mr. X pay his rent on time," to a Credit grantor rather than another landlord. Most employers are much more straightforward and more experienced when dealing with credit grantors rather than landlords.
Trap
Beware of discrimination against your prospective resident! Your credit criteria should be the same for all applicants. Your criteria should be in writing, so you always follow the same criteria. If you require three times the rent, one-year previous landlord's experience, or established credit, put it in writing. Incidentally, it is against the law to discriminate against married couples. Screen everyone separately that is over the age of 18 years. Whether or not they say they are married. The law suit that you save could be your own!

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THE EMOTIONS OF EVICTION - Robert L. Cain
Evictions are ugly. The tenant is getting booted out of his or her home, albeit rightfully so. And the landlord is in for untold emotional, financial and legal hassles.
A landlord's eviction-induced emotional headaches fall into three categories: guilt, shame and anger. Evictions rank right up there with other high-stress events - marriage, moving, and IRS audits.
Intellectually you know the bad tenant has it coming, but you still can't help feeling guilty about the eviction. Get rid of that guilt. The tenant is stealing from you. He has stolen your home, possibly stolen your utilities, and definitely stolen your hard-earned investment. The tenant is a thief!
If you want to give your apartment away rent free or have someone trash it or sell drugs out of it, shouldn't that be your decision and not the tenant's? Finally, ask yourself - what if I didn't evict this tenant? What would be the result? Shame results from the suspicion that you failed with this tenant. This nagging feeling lurks in the back of your head that if you had done better selecting a tenant, you wouldn't be going through this mess now. Evicting the tenant is like admitting that you made a mistake. Maybe it was bad selection to start with, but aren't you better off looking at the eviction as a lesson learned, cutting your losses, and getting on with business?
Maybe you didn't select badly, but the tenant changed. A good friend of mine, also a landlord, evicted a tenant two years ago. For the first year, she had been a model tenant. Then almost overnight she transformed into someone with an eviction wish. The wild parties, not paying the rent, and refusing to speak to her landlord, other than rudely, led my friend to conclude she'd started doing drugs. Without shame he evicted her.
Anger is the emotion of "they took advantage of me," and "I'll show them!" "Showing them" is a splendid idea. Just make sure that when you "show them" that you don't mess up the eviction. Too often anger results in landlords making one of the 16 mistakes that loses an eviction.
Very common is writing something extra on the notices demanding payment such as "pay up, deadbeat!" and "I don't care if you pay or not, you're out!" Extra comments on forms and letters will ensure that the judge lets your bad tenant stay.
Another anger-induced reaction and sure way to lose an eviction is harassment of the tenant. That's when you call - daily, twice daily, hourly - to say that you want him out, or repeatedly visit the property to "see if he's moved yet." Hold your temper or hire an eviction specialist - the emotional and financial cost is infinitely lower than the trauma of a lost eviction.
Evictions are a fact of business for landlords. You don't need to feel guilt or shame, and good business sense demands that you keep your anger under control.
For a free sample copy of the Rental Property Reporter or Northwest Landlord call 800-654-5456 or visit the website

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10 REASONS WHY YOU SHOULD NOT FEEL GUILTY ABOUT EVICTIONS!
1. ALWAYS START EVICTION IMMEDIATELY. If the tenants need extra time, the court will give it to them.
2. You don't make a profit with evictions. You only cut your losses.
3. You've already supplied the "NEEDY" tenant with free housing. You've done your charity work, give someone else a chance.
4. If the tenant doesn't have a friend or relative to help him out, doesn't that say a lot about the tenant's character.
5. If anyone asks you how you could put someone out on the street, ask them to pay the rent for them and you won't evict them.
6. The tenant has illegally kept possession of your house and is stealing from you. He has stolen your home, stolen utilities, stolen your hard-earned investment and stolen your services. The tenant is a thief. Do you see stores letting your tenant go in and take from them?
7. Letting a tenant stay in your house who is not paying rent is like giving your tenant your charge card or a blank check, and telling him, "Feel free to spend it, because I really don't care. I like loaning money out interest free, even if I'm not sure I'll get paid back."
8. How would you feel if you worked all week and your employer said I don't have a paycheck for you. Guess what, your tenant has told you that! Do you work for nothing?
9. If you want to give your apartment away or provide free rent, you should be the one who decides who gets it, not your tenant. There are a lot of people more deserving.
10. Your tenant is taking money that stops you from providing for your family needs. And the sad thing is that some tenants live better lifestyles than their landlords. It's easy when the landlords let them live rent free!

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SECURITY DEPOSITS - Missouri Revised Statutes
Security deposits, limitation--return of deposit or notice of damages, when--withholding deposit, when--tenant's right to damages--security deposit defined.
535.300. 1. A landlord may not demand or receive a security deposit in excess of two months' rent.
2. Within thirty days after the date of termination of the tenancy, the landlord shall:
(1) Return the full amount of the security deposit; or
(2) Furnish to the tenant a written itemized list of the damages for which the security deposit or any portion thereof is withheld, along with the balance of the security deposit. The landlord shall have complied with this subsection by mailing such statement and any payment to the last known address of the tenant.
3. The landlord may withhold from the security deposit only such amounts as are reasonably necessary for the following reasons:
(1) To remedy a tenant's default in the payment of rent due to the landlord, pursuant to the rental agreement;
(2) To restore the dwelling unit to its condition at the commencement of the tenancy, ordinary wear and tear excepted; or
(3) To compensate the landlord for actual damages sustained as a result of the tenant's failure to give adequate notice to terminate the tenancy pursuant to law or the rental agreement; provided that the landlord makes reasonable efforts to mitigate damages.
4. The landlord shall give the tenant or his representative reasonable notice in writing at his last known address or in person of the date and time when the landlord will inspect the dwelling unit following the termination of the rental agreement to determine the amount of the security deposit to be withheld, and the inspection shall be held at a reasonable time. The tenant shall have the right to be present at the inspection of the dwelling unit at the time and date scheduled by the landlord.
5. If the landlord wrongfully withholds all or any portion of the security deposit in violation of this section, the tenant shall recover as damages not more than twice the amount wrongfully withheld.
6. Nothing in this section shall be construed to limit the right of the landlord to recover actual damages in excess of the security deposit, or to permit a tenant to apply or deduct any portion of the security deposit at any time in lieu of payment of rent.
7. As used in this section, the term "security deposit" means any deposit of money or property, however denominated, which is furnished by a tenant to a landlord to secure the performance of any part of the rental agreement, including damages to the dwelling unit. This term does not include any money or property denominated as a deposit for a pet on the premises.

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APPLICANT "RED FLAGS" - Ernie Riddle
1.) Anyone that tries to push my greed button by offering to make an expensive improvement to the property. 2.) Anyone that needs to move in a big hurry. 3.) Anyone that falls in love with the home as soon as they walk through the door without asking questions and/or looking around carefully. 4.) Anyone that tells me that their landlord is selling the house that they are in. (I sometimes go to Dispossesssory (eviction) court to shop for properties being sold by discouraged landlords). 5.) Anyone that says that they have never lived in the state where their social security number was issued.
Some of my automatic disqualifications are: 1.) A DUI conviction! 2.) Smoking or having tobacco products in possession when viewing the property. 3.) Finding addresses in the applicants address history that were not disclosed on the application, especially a current address! 4.) Any landlord listed on the rental application that has never owned real estate! Due to low interest rates and liberal lending policies, almost anyone who can fog a mirror can buy a home. Therefore, the current crop of potential tenants is less than ideal. I have found that my best tenants have been former homeowners that have gone through foreclosure!
Usually, an unforseen event caused the foreclosure and is usually not repeated. Most of these post foreclosure tenants take good care of the property since they have been homeowners themselves. Since they are going through foreclosure and usually a bankruptcy, most other landlords will not touch them and are grateful to have a place to live. They usually stay 5-7 years and buy another home. As for cash paying tenants, I usually require a checking account and collect rent by bank draft. At present, I do have a family that is an exception to this rule. They show up at my front door every 20th of the month with la renta. They don't hablo mucho ingles, but they always pay on time!

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MANAGEMENT TIP - WARNING
DO NOT promise any incoming or prospective resident that your property is "secure". None are -- all can be breached.
If you promise security, you can be putting yourself at a much greater liability risk.
Did you know that rental property owners are being sued more often by tenants injured by criminals, with settlements and jury awards typically ranging from $100,000 to $1 million.

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SHOULD YOU LET A TENANT OUT OF A LEASE?
Tenants occasionally ask to be let him out of a lease. These decisions should be made on a case-by-case basis. There are a number of considerations.
Why does the tenant want out?
1. If he can't afford the rent anymore, then you are kind of stuck. In that case, he is being up front with you and doesn't want an eviction on his record. Probably the best bet there would be to just go ahead and cancel the lease. You will want to keep at least a portion of the security deposit to pay for your losses and expenses (see below).
2. If he is being transferred, possibly his company will pay for the rest of the lease. After all, it is their fault he is moving. Many times corporations will pay expenses for moves in addition to the normal moving van and new utilities.
3. If it is a divorce or other domestic dispute, see what you can work out. Ideas on that below. Or just ask for the written opinion of the judge. Document everything to protect yourself.
4. If he has just decided that he wants to move, say no, the entire contracted amount of the lease must be paid. He can move, but it will cost him the rest of the amount due for the term of the lease.
How is the rental market?
1. If it is good, you can probably re-lease the property quickly for as much or more than you were getting from this tenant.
2. If it is slow, you may have to play a little hard ball. You will have a tough time re-leasing for the rental amount you were getting.
Your responsibility if the tenant moves out before the lease is up: You must mitigate the damages, i.e., use your best efforts to get the place rented as quickly as you can with an acceptable tenant.
The tenant's responsibility if he moves out before the lease is up: Pay the damages incurred by the landlord.
If you do approve the release of your tenant from the lease there will be certain costs involved. First the ad for the rental. Your lease may allow an overhead fee for your time and trouble. Then there are the cleaning and damage fees that may be liable Then there is the time the apartment is vacant until the new tenant moves in. You don’t have to rent to the first person that walks through the door. Put the applicants through all your usual screening paces. Once you have the unit rented and the new tenant is moved in assess all your expenses, fees and damages. Subtract the amount from the deposit and mail off a check for the remainder or a bill for the balance within 30 days. If the tenant does not pay within your time frame you will have to go to Small Claims Court and sue for the amount due (don‘t forget to use their SSN). Be sure to fully document every step of the process and every expense (don’t forget lawyer's fees and court costs).
Two ideas for helping both sides
1. See if the tenant knows someone who would like to move into the property. If he has been a good tenant, chances are his friends would be too. Just do the checking you would normally do for a new tenant.
2. See if you can get the tenant to offer some kind of compensation for letting him out of the lease. Sometimes they'll offer more than you would have gotten otherwise.

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NEXT MEETING

Place: Southern Commercial Bank - 5515 S. Grand [ map ]
Date: Monday, September 18, 2000
Time: 6:30pm - 9:00pm

AGENDA TOPICS

6:30 - 7:00 Social
7:00 - 7:05 Welcome
7:05 - 7:15 Business Update/Aldermanic Report
7:15 - 8:00 guest speaker(s)
8:00 - 8:30 Jim Magnus
8:30 - 8:55 Discussion of Members Concerns
8:55 - 9:00 Raffle

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