How Does Your Group Home Deal With Code Compliance?
WOW! What a topic.
You thought being in the Real Estate game was PASSIVE INCOME?
Look, there is no such thing as passive income. Ask Johnny Depp. He has made over $650,000,000 during his career (Think Tyson or Holyfield) and 50% of his “Passive Income” was fleeced by his portfolio managers!
In our business we have what I call “Leveraged Income”….You may have a property manager, but no matter how “Passive” you think it is, eventually you need to work in some capacity in order to make money. Whether that means overseeing the financials, talking or going out to lunch with your house managers or whatever – YOU HAVE TO WORK!
PERIODICALLY, YOU JUST HAVE TO GET INVOLVED
Once you begin running real estate – whether group homes, multi family or just a few rental houses, you are unfortunately going to come across the biggest pain in the asses in our industry:
They will come into your properties for a variety of reasons – most often because a tenant is not paying rent and wants to complain to the local government.
HERE IS HOW TO BEST HANDLE AND WORK WITH CODE COMPLIANCE
1. Be pro-active. If you have a tenant that is not paying rent and you suspect they will call code officials, get going on making a call to them directly. Be honest and explain the situation. Then arrange to have the code officer come out to inspect the unit. This is what we refer to as a “preemptive strike”. The code officials will respect you for calling them first. The real beauty of this strategy is that you are running the event rather than them. Proactive VS. reactive
2. The minute you call the code dept. send your maintenance team over to the unit and begin cleaning it up! Get it looking as spotless as possible. You want them in and out FAST
3. Direct your other maintenance staff or house managers to “put on a party” and remove everyone from the property. This is easier said than done, however if you can get everyone out of the property by enticing them with Doughnuts, Coca-Cola and Cookies it will make your life easier. After all, human beings talk – and that is the last thing you want your clients doing in front of the code officials. Make no mistake – everyone wants something for nothing – and Code Compliance gives them that hope!
4. Document everything with Code Compliance. Be firm but polite. Some code officials are sneaky and will attempt to give you a verbal “to-do” or a verbal “sign-off” and then change the list up on you. Video record them, voice record them or make them sign off on a sheet of paper! Your business depends on it.
5. Follow up with them in writing. Include a recap of your meeting accompanied by photos, voice recordings and any and all signed documentation.
6. LAST and WORSE CASE SCENARIO. If code compliance continues being evasive or attempting to play games, reach out to the mayor or city manager and explain your situation.
You need to be polite and do not want to get on the wrong side of these “officials” however you also need to let them know that you will not be walked on. I have been in this business for 20 years and shed further light on how to deal with the ins and outs of all the issues that come up (for you, your GM or just your house managers) in my GOLD COURSE. The cost? It is $149 and will pay for itself in NO-TIME FLAT. It is literally less than 50% of the avg. client’s deposit.
FAMILY FORTUNES. 1 GROUP HOMES = $1 MILLION21 February, 2018
How Much Can I Make With Group Homes? Hint: Try $70 Million20 February, 2018
The New Tax Code and The Impact On Your Group Home17 February, 2018