There Are Two Types of Income Investors…

TONIGHT!!  TUESDAY, JUNE 25TH at the Rickett’s Center !! 

7Pm  640 Beech St. See Digital Notebook for details: 

Core Community Clean-up Planning Meeting Set for Tuesday

** Allen Davidheiser said he will make every effort to be there and I encourage and welcome other income property owners to join in.  

Last Summer I had an unexpected opportunity to talk with Attorney Michael Sarbanes of Baltimore, Md.  Mr. Sarbanes’ work has focused on strengthening communities on behalf of children and families as an attorney with the Community Law Center, among many notable contributions.

It was during our conversation that Michael shared the term:   “Extractive Investors.”  He went on to explain that an Extractive Investor, (aka slumlord), is someone who buys rental income property on the cheap, acquires tenants and does the least amount of maintenance or NO maintenance on their property.  They collect the rent and seldom, if ever, check in with the renters or nearby neighbors.  This cycle repeats until the property is abandoned or sent to Sheriff’s auction for back taxes and municipal liens, by which time it is usually uninhabitable and deemed to be blighted. Having extracted all of the financial benefits, the investor walks away leaving destruction for the community to grapple with.

Smoking from a pipe on the steps of a Section 8 rental. Reported to MCVH = they took NO action.

These are also the properties where you will find criminal activities as some renters choose to rent from Extractive Investors with full knowledge that their actions will go undetected by the owner.

The second type of rental income investor is smart and knowledgeable about protecting their investments and accruing value in their properties.  These investors understand how to manage their properties to maximize the experience for their tenants, the neighborhood and the community.  They maintain their properties, choose responsible tenants and make an effort to let the neighbors know that they will quickly address any problems that arise by giving their contact information to them.  These are also the investors that will support community efforts to improve neighborhoods and the quality of life for everyone. Eventually, many of them will sell their properties and realize a return on investment.

When all systems are in place and functional, there are checks and balances.  Rental ordinances require inspections and registration, police, codes and municipal employees are tasked with oversight of the safety, health and orderliness of individual properties and their inhabitants, landlords and neighbors step up to work with the municipality.

Yesterday, a homeowner put photo’s on Facebook of a rental property nearby where the tenants suddenly moved out and hastily deposited their trash on the ground – bags ripped open by critters over night.

The following morning, this is the view that awaited the neighbors, around 1101 South St. in the 6th Ward.

With the homeowners consent I posted the photo’s on my own timeline with details of who owns the property and how to contact the owner.  She also contacted the codes department.

This mess has been cleaned up!!  Mascaro’s took most of it and a good neighbor helped with the remainder.

Later in the morning, there was a knock at my front door.  A young man and woman asked me to step outside, he introduced himself as Allen Davidheiser, connected to the rental property featured on FB. Someone tipped him off about the photo’s and my comments.

As a courtesy, before talking with his attorney, he wanted me to know that I incorrectly listed him as owner of the property, that it is actually in a Trust.  After he left, I went back to check the info on the MontCo Property Records site, and sure enough – it is in a trust.  In 2005 the property was transfered, for $1 from Elwood F Davidheiser to Allen D. Davidheiser, Trust.   As it turns out, I was mistaken.  Allen D. Davidheiser owns the trust that owns the house, however that looks on paper, he’s responsible for managing the property.

As a heated conversation between myself, Allen and the young woman began to calm down, Allen told me that he would like to see property values go up in Pottstown.  A desire that I share and, I don’t know any homeowners here that wouldn’t like to see their home values increase. But, like other income investors I’ve spoken with recently, he feels that his back is up against the wall.

Other concerned investors have also, recently, put forth the effort to talk to me when their properties become a focus on FB or the Cockroach.  We’ve discovered that we have more in common than might meet the eye!  Other investors just have their attorneys send me threatening, ineffective letters, proving which side of the coin they are on.  I am learning a lot from conversations with good investors….

High taxes and an abundant pool of low-income voucher tenants, (many of whom exhibit no regard for their homes, neighborhoods or communities), leaves little room for investors to make better choices in tenants, coupled with low standards of inspections by MontCo Voucher Housing, voucher holders whose anti-social or criminal behaviors, even when reported, do not put them at risk of losing their vouchers, (they move and start all over again at another rental property), and, a crippled, limp-along-codes enforcement department…

Puts homeowners, good tenants and good landlords in precarious situations. What happen at 1101 South St., is that the tenant suddenly up and moved without letting Allen know his plans.

I would NOT want to make the choice to own rental property here under these circumstances.  However, for an investor who endeavors to be a good landlord, their plight has many similarities to our own plights as homeowners, and we can best serve our individual goals and collective goals with understanding and a big effort to work together.

That doesn’t mean that there are no investors that deserve to be featured on this blog, I will continue to make others aware of their actions.  But, from now on, all of us – homeowners – need to boldly make the effort to speak with nearby rental property owners who, in turn, need to meet the neighbors and make their contact information and their good will known to them.

The good landlords will be concerned and responsive.  The Extractors will “out” themselves, enabling us to clarify who’s who on our blocks and to more directly deal with the problems they contribute.

Allen Davidheiser agreed, we shook hands and we’re ready to roll forward.  We have everything to lose if we don’t see the light and get to work, together.

Allen said he would be willing to rally other good investors as myself, and others, have been rallying homeowners to meet up and set a course correction.

I anticipate that Extractive Investors will decline the opportunity to work with us because their own property values, cooperation and the welfare of the community isn’t their first concern.

I appreciate the opportunity to learn and understand, from the landlord’s perspective, the challenges they face and I believe they are open to hearing the challenges faced by homeowners, but we don’t need to dwell there… I believe we can begin to break the cycle of neglect, abusive renters, crime and blight.  It’s going to require dedication and hard work but with trust and respect everything is possible.

The grounds at Bright Hope are fresh, clean and well-landscaped with flowers – a park like setting and tidy housing units.

I learned recently that the tenants who live at Bright Hope, Montgomery County owned and managed, are required to attend class on how to keep their units, and the area around them clean, safe and healthy. Evidently, adult renters can be taught responsibility, but…

ON THE FLIP SIDE….

This is a MontCo owned property in the 500 block of King St.

This is what we see in our neighborhood, leading to the conclusion that MontCo can do better, it’s evidenced, where’s the effort to do better for this struggling little community?  It’s time for them to step up and work with all of Pottstown too.