Crazy Shark Dude

You know, it's a good thing there's such a stigma attached to being a slumlord, or else everyone would be doing it!

Actually not really, I've seen more than my fair share of XXXXL white T-shirts and ankle-length blue jean shorts, and most people just don't have the risk tolerance that I do when it comes to endangering their lives by entering neighborhoods reminiscent of Anbar Province in Iraq.

But many of you have posited that you may, in fact, be a slumlord, and have expressed varying degrees of concern over this epiphany. For now, we'll ignore the profoundly existential question of "How bad is it to be a slumlord" for the more categorical "Am I a slumlord?"

Without further ado, You Might Be Are A Slumlord if You:

1. Own rental properties that are worth less than a quarter of your home's value

2. Carry grizzly bear spray into the ghetto with you instead of the more traditional pepper variety (pepper spray's for pu$$ies! Just ask Teddy Ruxpin here ----->)

3. Own a trailer park but don't live there yourself, eschewing it for the more aristocratic double-wide down the dirt road

4. Refer to your tenants as "The Natives"

5. Have to roll up your windows while driving by your rental properties

6. As you walk up to your rental property to pay a contractor for long overdue repairs, you decide instead to spend the money on a h00ker working the same block

7. Your friends, family, and coworkers answer for you when someone asks what you do, with a euphemistic "He's in real estate. But back to what you were saying about that interesting bionucleic acid..."

8. Keep an eviction notice on your Windows desktop for easy access

9. Maintain a stash of hand sanitizer in the car, to stay ahead of that new strain of AIDS that you catch from looking at people who net less than $100K/year

10. Avoid wearing the colors red or blue when visiting your rental properties, and not because they don't compliment your eyes.

Face it: you're a slumlord. It's ok, I'm one too, and when it comes to being a slumlord, whatever doesn't kill you makes you richer!

<------------The Slum Limo!

I came across a gentleman the other day who had quite an interesting rental investment strategy: buying rental properties in dying cities, for a few grand, putting in another couple grand to put them in decent rental shape, and then renting for a few hundred dollars per month. He reportedly had about $6,000 tied up in each property, and rented them for roughly $350-400 apiece.

The game, you see, is Jenga: how high can you build the tower before it collapses?

His market was none other than Flint, Michigan (dear old Michael Moore would be proud), poster child of dying American cities (and probably followed by its big brother, Detroit). If you had any lingering doubts that the tower would, at some point, collapse, I hope this revelation has dispatched them - Flint is going down like a prom queen.

But consider for a moment the return he's achieving - invest $6,000, get $400/month. Assuming $100 of that is going to other costs each month (taxes, maintenance, etc), in less than 2 years he's paid off his investments and is sitting pretty with free and clear rental properties, netting him $300/month. At the end of Year 3, he's earned $4,800; 4 months later he's earned a 100% return on his investment (ONE HUNDRED PERCENT ROI!!!!).

The question, though, is does he have 40 months of tenancy before the tower collapses and he can no longer keep a tenant in the property because the town has finally completed its death convulsions?

Call me crazy, but I like it. It's like Real Estate Russion Roulette (apologies for mixing metaphors [yes I'm aware the last was a simile... never mind]).

So what do you do with these houses? 1. Buy a block. 2. Sign long term leases with stable families and elderly couples. 3. Cross your fingers, toes, and genitals that your tenants last at least 2 years!

We all know that the lower-end the property, the lower-end the rental application and credit reports you get as a slum landlord, which makes for some entertaining stories when you ask tenants prying questions about "little dings" in their credit reports.

Some questions I've had to ask are:

"What's the story behind that federal income tax judgment? No, not that one, the other one."

"Why were you evicted from the last two houses you lived in? And while we're at it, where were you living in that three year gap in your address history?"

"I saw you maxed out your credit card last year, and STILL didn't pay your rent or car bills. Are there any bills you did pay... ah! The in-store credit card from Wal-Mart..."

But enough about what I said. Let's talk about what THEY said. It's much more amusing.

Case Study 1: The Garden of Weeden

Jerome: "Man, that IRS lien is bull$hit, they all up in my business just because I didn't pay a couple years' taxes-"

Me: "Your tax lien is for $672. You're telling me you didn't pay taxes for several years, and all you owe is $672?"

Jerome: "That's what I'm TALKIN about, man-"

Me: "But you're driving a Cadillac, you must be making mo- never mind, we're done."

Case Study 2: The Repo Man Cometh

Me: "So, I see some collections and reposessions on your credit report. What's the story behind those?"

Emma Jean: "Well, you know how it goes, Mr. Shark Dude, they sell you the car for no money down, but then they want a bunch of money every month, and those bills add up..."

Me: "Yes, I can see how the bills for 2 cars, a 56 inch plasma TV, and... I assume that's a tractor, from John Deere, would add up, which is why most people don't buy them all on credit at the same time. What's this other repo account, from Crutchfield?"

Emma Jean: "A car stereo."

Me: "A car stereo?! You had a CAR STEREO repo'd?!"

Emma Jean: "Hello? Are you there?"

Case Study 3: Coming in on The Landing Strip

Crystal: "Mr. Shark Dude, I know my credit isn't amazing, but I make a LOT of money each month."

Me: "Doing what, exactly?"

Crystal: "I work over at The Landing Strip."

Me: "What is that, a regional airport or something?"

Crystal: "It's a, um, gentleman's club."

Me: "Here's the rental application approval, here's the key for your new rental property, and here's the key to my place just in case, you know, you get scared sleeping alone or something."

Just remember, just because someone hands you a rental application and has bad credit, it's not a total wash. At least you can have a laugh at their expense before sending them on their way!

:~p

Post Script - Who all seen da leprechaun say "YEA-AH!!!"

Maybe next week we'll have a special video entry, for the uninitiated.

If anyone has seen the movie Idiocracy, you know how far Mike Judge has fallen since Office Space, but the opening sequence still bears reiterating in our current context.

Thomas and Rachel are 2 self-respecting, intelligent people. They have one kid, and raise that kid to be like themselves; a self-respecting, intelligent person. They work hard, pay their taxes, pay their mortgage or rental agreement, and don't expect the government to hand out money, jobs, etc to them.

Bobby Sue and Bobby Joe are two uneducated, ignorant, inbred, IQ-of-87-on-a-good-day pieces of garbage. They have 8 kids, all of whom grow up to be (you guessed it) JUST LIKE THEM. They DON'T work hard, they don't pay taxes, and they're excited that "Obama will pay their rental agreement for them."

Who inherits the America of tomorrow? Sure, there will still be geniuses and well-raised citizens, but their proportion of the population is shrinking. "But," you say, "with so many people in this country, we'll still have plenty of intelligent, hard-working, tax-paying people to hold up the high end of the tax bracket, we can continue to lean on them." That logic is flawed. Already, 10% of the population pays 68% of the taxes (and earns 44% of the income), and every year that unequal wealth/tax distribution grows (which, of course, pisses off liberals for obvious reasons, but fiscal conservatives and libertarians should be equally horrified, and here's why). I won't bother trying to convince the social conservatives; if you think intelligent design is legitimate science, I don't expect you to understand high-fallutin' concepts like, say, macroeconomics.

If a shrinking proportion of people are contributing to the system, and a larger number of people are demanding handouts, at a certain point (read: NOW) the financial equation will no longer balance. This phenomenon builds gradually over time, but accelerates and becomes a "crisis" when a catalytic event such as an economic collapse (September 2008) or an international pandemic that kills off half the world's population (September 2010?), leaving only a handful of genuine contributors to the system.

"We need to care for the weakest among us!" cry the bleeding hearts. "Ok," I say, "Who are the weakest among us? The mentally ill? Ok. Veterans who lost limbs and are unable to earn much? Ok. Tell you what, I'll even kick in the poorest 10% of the population, just to satisfy the bleeding hearts. Fair?"

Hmmm... that all sounded fine, except... what percentage of the population do we ACTUALLY carry?

Here are the numbers: the "weakest among us" is the BOTTOM 50% OF THE POPULATION, who only pay 3% of taxes, which doesn't even cover the social program payments that go directly back to them. That means that we are literally carrying half of our population's weight.

What do we do with all that dead weight? Euthanize them? Sterilize them? Make them serfs like the old Russian system?

Here's an idea: we could stop paying them to breed.

Idea 2: Abolish the IRS altogether, and raise sales tax to 30%. "Oh, but all those poor out-of-work lawyers, accountants, and IRS agents!" you cry out. "We can make them serfs too," I reply.

Perhaps Messiah Obama will find a solution to our problem of shrinking Providers and growing Demanders (a problem compounded by our aging and retiring society). I'm not holding my breath though, so it's a good thing I'm not making any money from a single rental agreement, so I can be taken care of by all you hard working Providers!

suckers.

Source of Data: IRS

I've frequented some pretty dingy movie theatres in my day: art-house theatres, indie hubs, converted barns, etc. And that's fine. You know why? Because movie theatres are one of the few establishments in the world where it doesn't matter how nice or shoddy the actual establishment is, what matters is the people who go there. This is why, incidentally, if you're thinking about buying an old theatre to start your commercial rental agreement empire (no Dive Bars for you, you say!), don't worry about the shape of the building, worry about the kind of people who go there.

As anyone who's ever been to a slum movie theatre knows, the human trash is far thicker than the candy-wrapper trash, and here are the list of femme-fatales and mustachioed-villains to look out for:

1. The Moron Who Thinks the Characters Can Hear Him

"Turn around! Turn around! He's behind you with a knife! Ohhhh, nooo!!!!" You know them just like I do, and their mothers shouldn't have drank so much MD 20/20 during pregnancy. Who said euthanasia was wrong, again?

2. The 17-Year-Old Mother Who Brings Her Brat

No, little Dontavius doesn't need to watch R-rated movies at 11:00 at night when he's four months old. What, you want him to grow up to be a screw-up just like you and your baby daddy? Give the kid a chance, at least. Oh yeah, and there's that little issue of the rest of the audience suddenly losing control and bashing the kid with a melty Twix bar because he won't shut the he11 up.

3. The Cell Phone Talker

You know, I put up with it for a little bit, when you were just texting. But instead of having the good grace to be embarrassed when your electronic tumor started going off, you actually picked up and answered. I know, I know, your friend just got out of jail after that armed robbery stint, and you want to catch up, but do us all a favor and go do it with a forty in a dark alley like a good little thug.

4. The Candy Thrower

You'd be surprised how often this is NOT someone under age seven, but rather a fully functional sixteen year old. They leave you with only two options: 1. Fire back, or 2. Climb over the seats towards them, stand in front of them, loudly assemble a particularly disgusting loogie, and let fly on their face. (Note about Option 2: check to see how big the Candy Thrower is before attempting)

5. Huge Head Guy/Girl

It could be a hat. It could be hair. It could be a fro hat (see a few entries back for details). But I feel that there should be some guy with a hedge-trimmer standing by to buzz down that monstrosity on the person-in-front-of-me's head.

So remember, if you're thinking about going into the movie theatre rental business, buy the crappiest building in the nicest neighborhood, and carefully screen your entrepreneurial tenants before signing a rental agreement. Sure, they may seem nice, but you already said you have a no-animals-in-the-building policy, and you don't want them violating the rental agreement by allowing the savages above into your building. I mean, what's the point of owning a movie theatre building if you can't enjoy the free movies as a perk?