MI Landlord March/April 2015

MICHIGAN

LANDLORD MARCH/APRIL 2015

www.rpoaonline.org

INSPECTING RENTAL

COMBAT HABITABILITY CLAIMS UNITS TO

ALSO FEATURING: Landlord/Tenant Subrogation Rights Wrongful Eviction Something to Think About— Mortgage Carry

A PUBLICATION OF THE RENTAL PROPERTY OWNERS ASSOCIATION

WHERE LANDLORDS GO FOR HELP

IN THIS EDITION

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17

12

FEATURES 4

FROM THE DIRECTOR

5

NEW MEMBERS

10 MEMBER-TO-MEMBER DISCOUNT PROGRAM 20

UPCOMING SEMINARS & EVENTS

27

CREDIT REPORTING PROCEDURES

29 AD-O-GRAMS

ARTICLES

VOLUME 51, NUMBER 2

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HOUSE PASSES MORTGAGE FORGIVENESS DEBT RELIEF ACT

www.rpoaonline.org

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DID YOU KNOW YOU’RE A PRO?

for real estate investment and rental property ownership

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LANDLORD/TENANT SUBROGATION RIGHTS MAY VARY BY JURISDICTION, LEASE TERMS, AND INSURANCE POLICIES

and management ideas and news. Our articles,

MICHIGAN LANDLORD editorial goal is to provide a forum

columns, and other features should not be construed as investment advice, nor does their appearance imply an

8 EVICTION

endorsement by the Rental Property Owners Association

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INSPECTING RENTAL UNITS TO COMBAT HABITABILITY COMPLAINTS

of any specific real estate investment or management

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SOMETHING TO THINK ABOUT— MORTGAGE CARRY

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RPOA MEMBER LEFT SHAKING HIS HEAD

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VERBAL ORDERS IN GR?

of Kent County or the Real Estate Investors of Michigan strategy. An investor’s and manager’s best course of action must be based on individual circumstances.

March/April 2015 MICHIGAN LANDLORD 3

RENTAL PROPERTY OWNERS ASSOCIATION

From the desk of the Director CLAY POWELL

We hope you enjoyed our January/February first Annual Resource Guide issue of the Michigan Landlord magazine. If you have feedback, feel free to send me a note at clayp@rpoaonline.org.

As for this issue, we are trying hard to offer something for landlords and real estate investors. We hope we’re hitting the mark. Check out the article on NOI and real estate values on page 6 and the article on how to prepare for a future attack on your “warrant of habitability” on page 12.

We pride ourselves on offering content that is helpful, educational, informative and up-to-date. Enjoy this issue of the Michigan Landlord!

DID YOU KNOW YOU’RE A PRO? Just in case you didn’t know it already, you’re a Pro—a Home Depot Pro Rewards customer that is. If you’ve signed up for the RPOA Home Depot rebate, you’re also part of The Home Depot Pro Rewards program. Pro rewards offer huge discounts to customers on all varieties of tools, supplies and more. Once you sign up, you’ll receive emails with up-to-date discounts and coupons for Pro Rewards customers only. The better part: Not only do you get these discounts, you’ll receive 2% back on all your purchases made in a six-month period (purchase exceeding $1,249.00). Not signed up for the program yet? Call the RPOA office and we can get you signed up and earning the exclusive RPOA Home Depot rebate you deserve.

HOUSE PASSES MORTGAGE FORGIVENESS DEBT RELIEF ACT In the first week of December 2014, the U.S. House of Representatives approved a package of tax extension measures that included the Mortgage Forgiveness Debt Relief Act, a measure that prevents the IRS from taxing distressed homeowners on “phantom income” forgiven when utilizing a short sale.

The bill is retroactive through all of 2014 and saves distressed homeowners from paying taxes on $8.1 billion in forgiven debt. The U.S. Senate is expected to take swift action on the measure and President Obama is expected to sign the measure upon passage in the Senate.

Short sale tax extension protects distressed homeowners from $8.1 billion in “phantom income” taxation and removes a roadblock for investors using short sale strategies. Congressional action sets stage for passage of permanent break in 2015 to expand utilization of short sales.

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WHERE LANDLORDS GO FOR HELP

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RENTAL PROPERTY OWNERS ASSOCIATION

LANDLORD/TENANT SUBROGATION RIGHTS MAY VARY BY JURISDICTION, LEASE TERMS, AND INSURANCE POLICIES “Subrogation” is the right of the insurer to essentially stand in the shoes of the insured in order to pursue recovery of damages from any third parties who are legally responsible for the insured’s loss. In the landlord-tenant relationship, depending on the jurisdiction of the loss and the languages of the lease and the insurance policy, the landlord’s insurer may have the right to bring a subrogation action against a negligent tenant and its insurer, and, similarly, the tenant’s insurer may have a subrogation right against the landlord and its insurer.

JURISDICTION. Whether the landlord’s insurer can properly bring a subrogation action against a tenant varies depending on the jurisdiction of the loss. Generally, there are three different approaches that courts across the country use when resolving the question of whether the landlord’s property insurer can file a subrogation action against a negligent tenant:

1 The majority of courts/states follow the “Sutton Rule.”

Under the Sutton Rule, courts hold that, absent a clearly expressed agreement to the contrary, the tenant is presumed to be a coinsured on the landlord’s property insurance policy (effectively paying its portion of the insurance premium through its rent payments), and therefore the landlord’s insurance carrier has no right of subrogation against the negligent tenant.

2 In other courts/states, the tenant is not presumed to be

an implied coinsured on the landlord’s insurance policy, and instead the issue of subrogation rights is assessed on a case-by-case basis, governed by the intent and reasonable expectations of the parties as to who should bear the risk of loss or damage to the leased premises.

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3 The minority of courts/states takes a pro-subrogation

approach, holding that, absent a clear contractual expression to the contrary, the landlord’s insurance carrier will be permitted to sue a tenant in subrogation.

LEASE TERMS. As noted above, in all jurisdictions, the approach to subrogation is dependent on whether there is a clearly expressed agreement (such as in the lease) as to subrogation. If the lease clearly provides that the tenant is not to be a coinsured on the landlord’s property insurance policy, then the “Sutton Rule” is inapplicable, and the landlord’s insurance carrier may have a right of subrogation against a negligent tenant. If the lease clearly provides that landlord’s insurer does not have subrogation rights against the tenant (i.e., known as a “waiver of subrogation”), then the landlord’s insurer will not have a right of subrogation against a negligent tenant.

As was seen in the case highlighted in this bulletin, the language of the lease may be crucial in determining the extent of subrogation rights. The lease language may specify CONTINUED ON PAGE 7

WHERE LANDLORDS GO FOR HELP

CONTINUED FROM PAGE 6 that the tenant carry insurance, what is insured (e.g., the tenant’s portion of the premises or the entire premises), and whether the required insurance is intended to cover for all losses or just losses caused by the tenant.

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INSURANCE POLICY. Again, as we saw in the related case in this bulletin, even if the lease does not require the tenant to obtain insurance against losses to the premises, the terms of the insurance policy may dictate whether or not the landlord is an intended beneficiary of the tenant’s insurance policy. If the landlord is an intended beneficiary under the policy, then the landlord’s insurer may have subrogation rights against the tenant.

--------Source: Matthiesen, Wickert & Lehrer, S.C., “Landlord/Tenant Subrogation in All 50 States” (providing a comprehensive review of courts’ approaches to subrogation in each of the 50 states); http://www.mwl-law.com wp‑content/uploads/2013/03/landlord tenant‑subrogation‑in‑all‑50‑states.pdf Source: 44 Am. Jur. 2d Insurance § 1783, “Subrogation Under Particular Types of Polices or Under Particular Circumstances; Claims against landlord or tenant; effect of lease provision”

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March/April 2015 MICHIGAN LANDLORD 7

EVICTION

After Foreclosure, Tenants Are Evicted From Residence Without Notice Tenants sue new owner, Freddie Mac, alleging violations of the federal Protection Tenants at Foreclosure Act and wrongful eviction Citation: Mik v. Federal Home Loan Mortg. Corp., 2014 WL 486214 (6th Cir. 2014) The Sixth Circuit has jurisdiction over Kentucky, Michigan, Ohio, and Tennessee.

This case addresses the issue of whether the federal Protecting Tenants at Foreclosure Act (“PTFA”) provides tenants with a federal cause of action for unlawful eviction after foreclosure. It also addresses the issue of whether the PTFA preempts state laws that provide less protection to tenants, as well as whether tenants can use violations of the PTFA to establish the elements of a state law cause of action.

THE BACKGROUND/FACTS Paul F. Mik, Jr. and Lee Ann Mik (the “Miks”) owned and operated PALS Enterprises, LLC (“PALS”). Since October 2010, PALS leased a residence, with an option to purchase, from Wanda Meyer (“Meyer”). The Miks lived in the residence leased by PALS. Meyer eventually defaulted on her mortgage and the residence was sold at foreclosure on April 20, 2011. The successful bidder assigned the residence to the Federal Home Loan Mortgage Corporation (“Freddie Mac”).

Freddie Mac obtained a writ of possession for the property, which stated that Meyer was to be evicted from the premises. The writ did not mention the Miks. On July 28, 2011, a sheriff’s deputy delivered a copy of the writ of possession to the residence. The Miks then contacted the law firm that represented Freddie Mac, informing Freddie Mac that the Miks had a lease and that they had not been served with any court documents prior to receiving the writ. Nevertheless, on August 8, 2011, sheriff deputies removed the Miks’ property from the residence and placed it in the yard. More than $38,000 of the Miks’ property was damaged or destroyed by rain.

The Miks later sued Freddie Mac in federal district court.

(Pursuant to federal statutory law, all civil actions against Freddie Mac must be brought in federal district court.

(12 U.S.C.A. § 1452(f).)) The Miks’ complaint alleged that Freddie Mac had “disregarded” section 702 of the federal Protecting Tenants at Foreclosure Act of 2009 (the “PTFA”).

Among other things, the PTFA protects tenants who reside in properties that are subject to foreclosure by imposing certain obligations on successors in interest to foreclosed properties. The PTFA requires successors in interest to provide bona fide tenants with 90 days’ notice to vacate and to allow bona fide tenants to occupy the premises until the end of their lease term unless certain conditions are met. (Protecting Tenants at Foreclosure Act of 2009, Pub.L. No. 111‑22, § 702, 123 Stat. 1632, 1661 (codified at 12 U.S.C.A. § 5220 note (Supp.V.20l2)).)

The Miks alleged that Freddie Mac failed to allow the Miks to occupy the premises until the end of their lease term and failed provide them with 90 days’ notice to vacate, as required by the PTFA. The Miks also alleged the following: that they were wrongfully evicted; that Freddie Mac failed to follow due process prior to evicting them; and that Freddie Mac’s actions inflicted upon them “severe emotional distress.”

Freddie Mac filed a motion asking the court to dismiss the Miks’ complaint. Freddie Mac argued that while the PTFA could be raised as a defense in a foreclosure action, the PTFA did not create a private right of action, and thus the Miks could not bring an offensive action based on violations of the PTFA. In any case, Freddie Mac argued, the foreclosure sale had terminated the Miks’ lease and Freddie Mac had properly evicted the Miks pursuant to a writ of possession, as permitted by Kentucky law.

The district court agreed with Freddie Mac. It held that the PTFA does not provide a basis for recovering damages in federal court. The court further concluded that the Miks CONTINUED ON PAGE 11

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March/April 2015 MICHIGAN LANDLORD 9

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EVICTION

CONTINUED FROM PAGE 8

had stated causes of actions under the PTFA only and not under any state law. The court dismissed the complaint.

The Miks appealed.

DECISION: Judgment of district court

affirmed in part, reversed in part, and remanded.

The United States Court of Appeals, Sixth Circuit, agreed that the PTFA does not provide a private right of action.

However, the court also held that the PTFA’s requirements preempted state laws that provide less protection to tenants, and that while tenants could not bring a federal cause of action for violations of the PTFA, they could use such violations to establish the elements of a state law cause of action. The court further held that the Miks had stated a claim for wrongful eviction but had failed to state claims for denial of due process and outrageous infliction of emotional distress.

In so holding, the court explained that “[t]he fact that a federal statute has been violated and some person harmed does not automatically give rise to a private cause of action in favor of that person.” The court found nothing in the language of § 702 of the PTFA that expressly or impliedly created a right of action for violations of the PTFA. Accordingly, the court concluded that the PTFA does not provide an express or implied private right of action.

Still, the court noted that the Miks had also stated claims for wrongful eviction, denial of due process, and infliction of severe emotional distress. As to those claims, the court agreed that Freddie Mac complied with Kentucky law by obtaining a writ of possession in order to remove the Miks from the property. Nevertheless, the court also concluded that the PTFA preempts state law that is less protective of tenants, such as the provisions of Kentucky law at issue here.

Most notably, the court also held that, in addition to being used as a defense to an unlawful detainer action, violations of the PTFA can be used “offensively” to establish a state law case. The court observed that “[t]he absence of a private right of action from a federal statute provides no reason to dismiss a claim under a state law just because it refers to or incorporates some element of the federal law. .

To find otherwise would require adopting the novel presumption that where Congress provides no remedy under federal law, state law may not afford one in its stead.” The court noted that “[un cases where successors in interest do not initiate judicial proceedings, tenants have no opportunity to raise the PTFA as a defense. Thus, they must be permitted to use available state law causes of action, such as wrongful eviction, to enforce the PTFA’s protections,” or otherwise “[t]he PTFA would be rendered virtually meaningless if the foreclosure sale purchaser could ignore its protections with impunity, bypass judicial process and evict any tenant without notice or court process.”

The court then addressed the Miks’ state law claims of wrongful eviction, denial of due process, and infliction of severe emotional distress. The court held that the Miks had stated a claim for wrongful eviction but had failed to sufficiently state claims for denial of due process and outrageous infliction of emotional distress. As to the wrongful eviction claim, the court found that the facts alleged by the Miks (e.g., that under the PTFA they had a right to remain in the home after the foreclosure sale; that Freddie Mac did not allow them to stay for the duration of their lease; and that Freddie Mac evicted them without providing 90 days’ notice) were plausible and supported a claim for the tort of wrongful eviction. The court reversed the district court’s dismissal of the Miks’ compliant with respect to the claim for wrongful eviction.

See also: Pembroke Road Warehouses, LLC v. Eagle Way AG, LLC, 2005 WL 2045815 (Ky. Ct. App. 2005).

See also: Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547 (7th Cir. 2012) (explaining why a violation of federal law can support a state law claim, even when there is no private right of action under a federal statute).

See also: Webb v. Green Tree Servicing, LLC, 2011 WL 6141464 (D. Md. 2011) (providing the one other court decision, which has considered whether violations of the PTFA can be used “offensively” to establish a state law cause of action).

Reprinted from Landlord Tenant Law Bulletin, April 2014 issue.

March/April 2015 MICHIGAN LANDLORD 11

RENTAL PROPERTY OWNERS ASSOCIATION

Inspecting Rental Units to

COMBAT HABITABILITY CLAIMS

By Eviction Attorney, Michael A. Brennan

12

WHERE LANDLORDS GO FOR HELP

Any landlord who has done an eviction knows that tenants always claim the landlord breached the “warranty of habitability” as a defense to an eviction. In order to be successful, a tenant must prove four elements; 1) A substantial defect existed in the rental unit; 2) the landlord had either actual or constructive knowledge of the condition; 3) the landlord failed to remedy the condition; and, 4) the tenant neither substantially contributed to, nor substantially prevented the landlord from fixing, the condition.

Sounds fairly simple, right? So why do so many judges and juries find that landlords have violated the warranty of habitability, even where the landlord had no knowledge about a condition requiring attention or repairs? It leaves many landlords asking, “How can the judge/jury say I breached the warranty of habitability by failing to fix something that I knew nothing about?”

That question arises usually from a misunderstanding about the level of knowledge required by a landlord before the landlord has a duty to fix a problem. Many landlords reasonably, but mistakenly, misunderstand the meaning of “actual or constructive knowledge”. While actual knowledge is fairly simply to figure out, what constitutes “constructive” knowledge may surprise you. Judges are trained, and juries are instructed that “constructive knowledge” of a problem exists where a reasonable inspection would have revealed the problem.

So how does a landlord deal with this situation properly and proactively? Asked another way; how does a landlord ascertain the condition of the unit in order to make the repairs he or she will be deemed to know about? By using the right forms, policies, and procedures that enable landlords to get into their rental units for regular inspections.

But there is one small problem; the law does not recognize a “right” of the landlord to enter a tenant’s rental unit simply to conduct a general inspection. So what do you do?

UNDERSTANDING YOUR OBLIGATIONS AND RIGHTS TO ACCESS THE UNIT FOR AN INSPECTION The first step is to understand your obligations and rights in connection with the inspection of your rental units, and the next step is to implement a plan that allows you access to the unit on a regular basis without violating the law or the tenants’ rights to privacy.

LANDLORD’S “OBLIGATION” TO INSPECT A landlord’s duty to provide tenants with a “habitable” rental unit begins before the inception of the tenancy. Specifically, the landlord is obligated to inspect the unit and put it in a condition “fit for residential occupancy” prior to delivering it to the tenant, as well as at the time of renewal. For example, a one year fixed term lease requires the landlord to inspect the property both at the inception of the tenancy as well as a year later when renewing the lease. Additionally, landlords have a duty to inspect the unit for dangerous conditions at the renewal of the lease term, in order to “repair all subsequent dilapidations thereof which render it un-tenantable.” However, the law recognizes that these duties must be balanced with a tenant’s right to privacy and quiet enjoyment. In other words, the landlord has a duty to

inspect the unit at various intervals, but the tenant’s right to live in peace and quiet cannot be infringed upon or abused by excessive inspections.

DOCUMENTATION Let’s start with documentation. Review your lease to make sure it contains provisions that: 1) require the tenant to provide access to the landlord or its agents; and, 2) prohibit the tenant from changing the locks without the landlord’s prior written consent, (which should be conditioned upon the tenant providing a set of working keys). Both provisions should include language making the tenant’s violation of either provision a material breach of the agreement. (Believe it or not, there are judges who refuse to evict tenants for a failure to allow access or provide keys to the landlord unless it is clearly stated in the lease that they are required to do so.) If your lease does not already contain one or both provisions, simply draft and serve a 30 day notice of change in terms of tenancy adding those provisions (provided a month to month tenancy exists. If not, simply add them at renewal time).

Now that the documentation allows you to evict a tenant for refusing to allow you access and/or changing the locks without giving you a key, let’s address policies and procedures for getting into the unit.

POLICIES & PROCEDURES The next step in gaining access to the unit is to establish a policy of accessing the unit on regular intervals for legitimate purposes, (e.g., testing and maintaining the smoke and/or CONTINUED ON PAGE 16 March/April 2015 MICHIGAN LANDLORD 13

RENTAL PROPERTY OWNERS ASSOCIATION

CONTINUED FROM PAGE 13 carbon monoxide detectors). This can be done on a nonintrusive schedule, such as quarterly, or every six months.

By staggering the inspections (e.g., a yearly safety inspection in January, then one for testing and maintenance of the smoke and carbon monoxide detectors four to six months later) landlords should be able to reasonably inspect the unit three to four times a year. As part of your policies, it should be required that where tenants are present for the inspection, landlords will have the tenant sign a pre-printed inspection form in which the tenant acknowledges that there either are, or are not, conditions requiring attention. Those signed forms should be placed in the tenant’s permanent files as evidence of the habitable condition of their unit in the event of a trial.

But what about the period of time in between the inspections, during which the tenant will claim that a condition constituting a breach of warranty of habitability arose? How does a landlord insulate themselves from that?

As the saying goes, there are a million ways to skin a cat.

For example, I saw a client’s custom printed receipts on which he had two boxes at the bottom. Next to one box was printed “my residence requires maintenance or service” with a couple of lines next to it for a description. The second box simply stated “my residence does not require maintenance or service at this time”. His thought process goes like this: by having the tenant sign the receipt each month when they pay their rent, they are affirmatively indicating the unit is in good repair. Coupled with a solid preventive maintenance schedule and several redundant means in which the tenant can notify the landlord of problems, the tenant will be hard pressed to convince someone, whether judge or jury, that in the small period of time between the inspections every three to four months, a habitability problem popped up warranting withholding or reduced rent.

In conclusion, most tenants raise the landlord’s “breach of warranty of habitability” as a defense to an eviction action. It can provide them with an edge over landlords when negotiating settlements. The landlord’s knowledge of the problem (whether actual or constructive) is an essential element of the defense, and the court routinely finds that landlords have the necessary knowledge where a reasonable inspection would have revealed the condition.

To protect themselves from this situation, landlords have to get into their units for inspections on a regular basis, notwithstanding the fact that the law limits their ability to do so. In order to inspect their units on a regular basis, while respecting the tenants’ right to quiet enjoyment and 14

privacy, landlords need to adopt proactive systems which include proper documentation, policies, and procedures that: 1) allow a landlord to legally enter the unit for regular inspections, and 2) allow the landlord to terminate the agreement for a tenant’s failure to grant access.

By combining the landlord’s legally required inspections (at inception or renewal) with the legally recognized situations in which a landlord may enter the unit (e.g., testing and maintaining the smoke detectors), landlords should be able to access the unit on a regular basis to inspect it for conditions requiring attention. In conjunction with creative approaches like having tenants sign off on the habitable condition of the unit each time the landlord inspects, and signing their rent receipts indicating no problems exist in the unit, landlords can effectively diminish the possibility of a judge or jury deeming them to have the knowledge necessary to support the tenant’s claim of habitability.

The foregoing information is presented and intended to address the topic(s) covered above in a general nature, and not as specific legal advice. Specific situations and their facts should be presented to your attorney for review.

Reprinted from the AOA News and Buyers Guide, October 2014 issue.

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SAVING YOU TIME & MONEY

Do you know where your money is going, or how to stop the leaks? We let you focus on running your business, and we handle the numbers . . . saving you time and money.

culver | group CPAs & Business Advisors

616.456.6464 . culvercpagroup.com . 1419 Coit . Grand Rapids

March/April 2015 MICHIGAN LANDLORD 15

RENTAL PROPERTY OWNERS ASSOCIATION

Indoor Climate Solutions making your home paradise

616-891-HEAT(4328)

M-F 8am-4pm, Sat. by appointment Mention this ad for a 5% Discount on any parts

• • • • • •

16

$40.00 heating inspection sticker per appliance Upfront pricing Service All Major Brands Quality Installation at an Affordable Rate Licensed & Insured Furnaces, Boilers, A/C, Water Heaters, In floor Radiant, Full line IAQ products

WHERE LANDLORDS GO FOR HELP

Something to Think About—

Mortgage Carry

By Klarise Yahya, Commercial Loan Broker

If you want more basic beginner guidelines on successful investing, see my book “Stairway to Wealth” available at LuLu.com.

The first part of this article will define the terms. The second part will review the use of capitalization rates, a critical element of mortgage carry calculations. The third section will address the mortgage constant and discuss how it impacts cash flows. The fourth portion will illustrate positive mortgage carry.

This can be a double-edged sword, however, and the final section will illustrate negative mortgage carry.

PART 1: GLOSSARY

PART 2: REVIEW OF CAPITALIZATION RATES

Cap Rate: A measurement of expected yield during the first year of ownership. If a yield over the entire period of ownership is desired, the Internal Rate of Return (IRR) or Financial Management Rate of Return (FMRR)—not covered here—is probably more useful.

Cap Rate Formulae—Capitalization Rate: Net Operating Income divided by Price equals Cap Rate (in decimals).

Ex: $10,000 NOI divided by $100,000 Price equals 0.10 Capitalization Rate (10%).

Price: Net Operating Income divided by Cap Rate equals Price. Ex: $10,000 NOI divided by 0.10 Cap Rate equals $100,000.

Net Operating Income: Price times Cap Rate equals NOI. Ex: $100,000 Price times 0.10 Cap Rate equals $10,000.

Carry: The Carry Trade borrows at one rate to reinvest at another (higher) rate. This is not uncommon amongst foreign exchange traders, but is also occasionally available in mortgages. It is another utensil in the toolbox.

Mortgage Constant: Annual debt service (includes principle and interest) divided by amount borrowed.

NOI: Net Operating Income. This is the money remaining at the end of the year after paying all the expenses of ownership except the mortgage. Debt service (principle and interest) comes out of the NOI, leaving Before Tax Cash Flow.

What to look for: Stream of income investments (as opposed to speculative investments, as in “Yeah, but maybe we can sell it for more in a couple years”) can be compared by weighing their first year’s risk adjusted net returns. From a purely income perspective, an absentee owned car wash at a (hypothetical) 17% cap rate is better than an apartment building at 7% cap. Risk adjusted, big caps are better than small ones.

How does it vary? At any given NOI, as cap rates go down values go up. A $10,000 NOI capitalized at 8% yields a value of $125,000. At a 5% cap rate, that same NOI would be worth $200,000. Alternatively, at any given NOI as cap rates go up (say from 5% to 8%) values go down. Think of a teeter-totter with cap rates on one end and value on the other. When cap rates go up, values go down.

Complication 1: The underlying premise is that NOI acts as the fulcrum upon which the teeter-totter pivots. Over time, thankfully, the net operating income of apartment buildings tends to rise. If cap rates remain the same while the NOI rises, values go up. You’re capitalizing a greater stream of income at the same cap rate. Ex: A building’s NOI is $83,000 and is purchased at a 7% cap rate. Purchase price was $1,186,000 (rounded). Time passes and net operating income rises to $100,000. Cap rates remain CONTINUED ON PAGE 18

March/April 2015 MICHIGAN LANDLORD 17

CONTINUED FROM PAGE 17 unchanged. The value of the building at the higher NOI is ($100,000 divided by 0.07 = $1,429,000 (rounded). Takeaway: If cap rates remain the same, the building’s value rises or falls depending on the changes in net income.

Complication 2: Cap rates are joined at the hip to ever-changing interest rates. As interest rates change, cap rates can be expected to follow. Low interest rates usually mean low cap rates. If net income remains the same, but cap rates rise, the value of the property will decline. In periods when the cap rate drops but net income remains the same, the property value will increase. You’re capitalizing a fixed stream of income at a greater (or lesser) cap rate.

Ex: $100,000 NOI capitalized at 9% (0.09) gives a value of $1,111,000 (rounded). At 7% (0.07) the value was $1,429,000. Takeaway: If the NOI remains the same, value rises or falls based on changes in cap rates.

PART 3: MORTGAGE CONSTANT: ANOTHER TOOL

Theory: The Net Operating Income provides the return of and on the mortgage principal and on the down payment.

This may want a little explanation. If “A” is the down payment and “B” is the loan, then “A” plus “B” becomes the purchase price.

The “B” people (“B” for bank) want to get a return on their money while the loan is outstanding (return on) and they hope to get their principle back over time (return of).

The “A” person, the buyer who makes the down payment, wants to get a return on his money during his period of ownership. But there is no return of his down payment through cash flow. The owner is supposed to maintain an equity investment for as long as he owns the property.

So, the NOI needs to cover return of the loan principle and return on both the remaining loan balance and the (hopefully) ever-increasing equity portion. We shall soon see that the return on doesn’t have to be the same for the bank as for the borrower.

Example 1: (30 year mortgage)

Purchase price: $1,000,000

Down Payment: $300,000

Mortgage Amount: $700,000

Cap Rate 7%: $70,000 (NOI)

[$1,000,000 times 0.07]

Mortgage Pmt: $42,000 (annual P&I)

Mtg Constant: 6%

[$42,000 divided by $700,000]

Cash Flow: $28,000 (annual)

[$70,000 minus $42,000]

18

Yield on Dwn Pmt: 9% (rounded)

[$28,000 divided by $300,000]

Just to emphasize, due to Mortgage Carry, this is a 9% (rounded) cash yield on the down payment. Today’s interest rate for the 10 year Treasury Note is 2.40%. That’s a big difference, huh?

PART 4: POSITIVE MORTGAGE CARRY

Question: How can a building sell at a 7% cap rate yet generate 9% cash-on-cash yield to the borrower? Only through favorable borrowing.

Explanation: Since the 7% cap rate (what the buyer gets) is more than the 6% mortgage constant (what the buyer pays: principal and interest repayment for the borrower’s loan), the buyer is earning 1% on amount borrowed. Life is good. Pass the cookies.

Example:

NOI $70,000

Less Mtg Pmt $42,000 (annual P&I)

Cash Flow $28,000 (annual)

That $28,000 cash flow consists of the 7% cap rate on the $300,000 down payment ($21,000) plus a 1% overage on the $700,000 purchase loan ($7,000).

PART 5: NEGATIVE MORTGAGE CARRY Example 2: (15 year mortgage)

Purchase Price : $1,000,000

Down Payment: $300,000

Mortgage Amount: $700,000

Cap Rate 7%: $70,000 (NOI)

[$1,000,000 times 0.07]

Mortgage Pmt: $64,000 (annual P&I)

Mtg Constant: 9%

[$64,000 divided by $700,000]

Cash Flow: $6,000 (annual)

[$70,000 minus $64,000]

Yield on Dwn Pmt: 2% (rounded)

[$28,000 divided by $300,000]

Takeaway: Mortgage Carry can be positive (borrower’s yield on the down payment exceeds the cap rate) or negative (borrower’s yield on her down payment is less than the cap rate).

This article is for informational purposes only and is not intended as professional advice. For specific circumstances, please contact an appropriately licensed professional.

Klarise Yahya is a Commercial Mortgage Broker.

WHERE LANDLORDS GO FOR HELP

(616) 532-3626 or (888) 821-8846 Gerritsappliances.com

Providing the Highest Levels of Professionalism, Performance and Results.

PROPERTY/ASSET MANAGEMENT

• Residential • Multi-Family • Small Commercial/Office • Condominium Association • Homeowner Association • Portfolio Discount

SPECIALIZING IN UNDER-PERFORMING REAL ESTATE

• Serious/Thorough Approach to Property Performance • Creative Solutions to Owner Goals

NO OBLIGATION PROPERTY EVALUATIONS

• Marketing thru Exclusive Video Presentation/ Tracking Technology

• Asset Preservation

• Performance Based Fee Structure

• Value Enhancement

• Limited Portfolio Policy

• Buy/Fix/Hold Strategies thru Self-Directed IRA’s

KIM HAIN, CPM

33 years property/asset manager experience cell/text: 616.862.1736 office: 616.257.7800 email: kimhain3@yahoo.com

connect

*

Managing For Success

PROPERTY MANAGEMENT David H. Bigelow RPOA Member

Bus: 616-453-5368 Cell: 616-822-4710

Grand Rapids Carpet & Furniture Cleaners since 1944 We use

RPOA members receive a 25% Discount

March/April 2015 MICHIGAN LANDLORD 19

Upcoming Seminars and Events HELPING REAL ESTATE INVESTORS BECOME MORE SUCCESSFUL

EPA Renovation, Repair & Painting Refresher Course

RENOVATION, REPAIR & PAINTING

DON’T MISS YOUR DEADLINE!

Mar. 26, 2015 • 8:00 a.m. to 5:00 p.m. Limit: 8 attendees.

If you have a current RRP Certification,

Mar. 5, 2015 • 8:00 a.m. to 12:00 p.m. Limit: 10 attendees.

Mar. 17, 2015 • 8:00 a.m. to 12:00 p.m. Limit: 10 attendees.

Mar. 31, 2015 • 8:00 a.m. to 12:00 p.m. Limit: 10 attendees.

look at your expiration date. If you took the RRP class 5 years ago, you are due for a recertification. Don’t let your current certificate expire or you’ll have to retake the initial full-day course!.

RPOA offers the Refresher class at a reasonable cost. Sign up before your expiration date to maintain your eligibility for this class. Those who wait until after the expiration date will be required to take the 8 hour class instead of the 4 hour class. You can register online at the RPOA website, www. rpoaonline.org. Check out the details on the calendar.

Sign up now to maintain your eligibility and you will be good for another 5 years.

This Course teaches rental property owners, contractors and other paid professionals how to work safely in housing with lead-based paint and comply with EPA’s Renovation, Repair, and Painting (RRP) Rule, and HUD’s Lead Safe Housing Rule.

Richard TenHoor, Certified Lead Safe Work Practices Trainer, Landlord and RPOA Member, will teach lead-safe work practices in a comprehensive session. Not knowing how to work in a leadsafe manner can expose your rental business to liability. The EPA now requires all landlords to use lead-safe work practices and be certified under the new RRP rules.

8 Hour Initial Classes Members: $130 / Non-Members: $150 4 Hour Refresher Classes Members: $110 / Non-Members: $125

Mar. 27, 2015 • 10:00 a.m. to 12:00 p.m.

NEW MEMBER ORIENTATION Taught by Clay Powell. Class held in RPOA Training Room.

The class will cover:

• National & local discounts and rebates available to members.

• Training on the use of the RPOA Website, including sign up, free form access, knowledge base and online videos.

• How to sign up for and use the free Tenant History Website for tenant screening.

• How to use Rentlinx.com and the free MIRentalGuide.com to list your rentals.

• An update on current RPOA governmental affairs activities.

• And more!

CLASS LIMITED TO FIRST 6 PAID REGISTRANTS

All events are held at the RPOA office unless otherwise noted.

Cost: $25 Gold members, $35 Silver members and non-members unless otherwise noted.

20

! s u n i Jo

REAL ESTATE INVESTORS (REI) FRIDAY MORNING BREAKFAST ROUNDTABLE Held every Friday, 8–9 a.m.

Cheshire Grill / 2162 Plainfield NE, Grand Rapids, MI

West Michigan REI Club Meetup 2nd Monday of the Month at 6 p.m.

Buffalo Wild Wings Grill and Bar 2720 44th St. SW, Wyoming, MI

REGISTER BY CALLING 800.701.7762 OR EMAIL CONTACTRPOA@RPOAONLINE.ORG Apr. 21, 2015 • 10:00 a.m. to 12:00 p.m.

May 5, 2015 • 10:00 a.m. to 12:00 p.m.

EVICTIONS MADE SIMPLE - CE, PHP

LANDLORD-TENANT LAW: AVOIDING FINES & PENALTIES

Con-Ed Approved Class for Realtors. Earn 2 hours legal!

Presented by David Hill, Attorney at Law Ready to pull your hair out with a difficult or non-paying tenant?

Clay will show you how to quickly (and legally) evict troublesome tenants.

Con-Ed Approved Class for Realtors. Earn 2 Hours!

Presented by David Hill, Attorney at Law There’s more to managing rental property than meets the eye.

David Hill, Attorney at Law, will present Michigan landlord-tenant laws in an easy-to-understand session.

Apr. 30, 2015 • 6:00 p.m. to 8:00 p.m.

UNDERSTANDING LEASES & CONTRACT LAW Con-Ed Approved Class for Realtors. Earn 2 Hours!

Presented by Clay Powell, Licensed Real Estate Salesperson & RPOA Director Thinking of writing your own lease? Confused about the terminology used on a lease? Clay will provide a foundation of the requirements for leases in the State of Michigan. Participants learn about what can and can’t be in a lease, how tenants can walk away from a lease, and more.

May 19, 2015 • 10:00 a.m. to 12:00 p.m.

MARKETING & SCREENING FOR PAYING TENANTS - CE, PHP Con-Ed Approved Class for Realtors. Earn 2 hours!

Presented by Clay Powell, Licensed Real Estate Salesperson & RPOA Director Clay presents a thorough look into getting your apartments rented by using different marketing strategies. This course covers the essentials needed to find and attract the best possible tenants.

The participants will learn a wide variety of marketing strategies and methods for screening tenants to obtain the greatest profit.

May 28, 2015 • 6:00 p.m. to 8:00 p.m.

PROTECTING YOUR ASSETS - CE, PHP Con-Ed Approved Class for Realtors. Earn 2 hours!

Presented by David Hill, Attorney at Law As a landlord, do you know if you’re protected from vandalism, damage from burst pipes, or injuries resulting from environmental sources such as mold? Will your personal assets be protected from claims and creditors in a financial crisis? If you would like to know the answers to these questions, or have other questions about your legal rights and responsibilities as a landlord, this course is for you!

Join David as he explains how to best protect your valuable assets from claims, lawsuits, and other un-doings.

CE = CERTIFIED COURSE FOR REAL ESTATE CONTINUING EDUCATION PHP = PROFESSIONAL HOUSING PROVIDER CREDIT

Noel Selewski Agency, Inc.

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Call today for your free quote, weather you have one property or one hundred, we can help.

855-50-INSURE (855-50-467873) E-mail: nselewski@yahoo.com www.noelselewskiagency.com

Important information for: Farm Bureau – Great Lakes Mutual Insurance customers As of 10/01/2014 Farm Bureau Insurance will no longer be associated with Great Lakes Mutual Insurance. This change in carrier may result in a premium change. If you are currently insured with Great Lakes Mutual and you would like to keep your policy where it is, you will need to switch to a licensed agent. Our agency has been writing with Great Lakes Mutual for the past 6 years and we have an outstanding record with the carrier and our customers.

Please contact our office today if you would like to keep your policy with Great Lakes Mutual Insurance. We can write in any area of Michigan, West, East, North, South.

Noel Selewski Agency Inc. Ph: 855-50-INSURE (855-50-467873) E-mail: nselewski@yahoo.com www.noelselewskiagency.com

WHERE LANDLORDS GO FOR HELP

TIME RUNNING OUT FOR UP TO FREE DOLLARS TO REHAB YOUR RENTALS

$10K

Don’t wait: The City of Grand Rapids’ Get the Lead Out Grant program is approaching its final days. All projects need to be in the hopper as soon as possible to be completed before the money runs out.

The City has significantly cut the landlord co-pay for work under the rehab program to $600 per unit. The program—which provides up to $8,000 per unit for things such as window replacement, siding and structural repairs—is nearing completion and applications and projects must be in the hopper in order to be funded. Any rental property owner interested in receiving funding for their rehab projects or work to remove lead hazards are encouraged to contact the City’s program manager, Doug Stek, as soon as possible at 616-456-3672.

Some of the parameters include: • Grants up to $10,000 per unit. $4,000 for each additional unit in the building, up to four units. (Cost exceeding the maximum amounts must be covered by the owner to address all identified hazards.)

• Rental properties must be marketed to income qualified tenants for at least three years.

• Preference is given to families with young children.

• Rent limits apply for three years.

• Landlords or their maintenance staff must attend Renovate, Repair & Painting (RRP) training provided by the RPOA. (Check out the RPOA event schedule for the up and coming RRP training courses at www.rpoaonline.org. The RPOA RRP course is the one of the least expensive in the State of Michigan.)

REQUIRED REPAIRS All identified hazards must be corrected under the grant program. Typical hazards addressed include chipping and peeling paint, window failure, structural failure, porch failure and other items in disrepair that might exacerbate conditions that contribute to paint and structural failure. New vinyl siding and windows are often the most viable solutions to these problems where permitted by Historic Preservation.

FOR MORE INFORMATION The RPOA has retained Richard TenHoor to answer lead and grant related questions on Tuesdays, Wednesday, and Thursdays except during training times which are planned currently once per month. Call 616-454-3385 to talk to Richard.

TO MAKE A GRANT APPLICATION To apply for assistance through the City’s grant program, download an application here or call the Housing Rehabilitation Office at (616) 456-3030 to have one mailed to you.

March/April 2015 MICHIGAN LANDLORD 23

RENTAL PROPERTY OWNERS ASSOCIATION

RPOA MEMBER IS LEFT SHAKING HIS HEAD One member is left shaking his head in dismay and confusion.

“I don’t get why anyone would say they can’t afford to be a member of the RPOA. The truth is: I can’t afford not to be! Even though I only own a few rentals, my annual membership pays for itself through RPOA member discounts.

“As an example, from my experience, an RPOA member with just one property could easily expect to save something like this in one year—and below is just a small sample of all the savings that could be had: Total Annual Savings/Rebates

SAMPLE EXPENSES $2,500 for move-in preparation and new appliances for one unit—The Home Depot Rebate 2% Rebate [See (1) below.]

$

25.02

96 gallon waste container—Republic Waste (Instead of Grand Rapids) [See (2) below.]

$

131.40

5 gallons of paint—Sherwin Williams (Instead of Behr) [See (3) below.]

$

50.00

$245 for Miscellaneous Items & Tools—Rylee’s Ace Hardware [See (4) below.]

$

24.50

$50 for equipment rental—Sun Rentals

$

7.50

Single Drive Snowplowing—Jack’s Lawn Service & Snowplowing [See (5) below.]

$

45.00

Total Savings:

$

283.42

RPOA Gold Membership:

$

249.00

Net savings to the RPOA member:

$

34.42

Notes: (1) 2% rebate on total purchases made in 6 months exceeding $1,249. (2) GR Trash, 45 tips/yr., $6 per tip, total $270.

Republic Waste, 12 months at $11.55/mo, total $138.60 (both 96 gal carts). (3) Buy 5 gal Behr paint at $32/gal = $160. Buy equiv.

Sherwin Williams paint at $22/gal = $110. Savings of $50. (4) 10% discount from Rylee’s Ace Hardware for RPOA members who use cash. (5) 20% discount for RPOA members, $225–20% = $180.00.

The truth is: I can’t afford not to be [an RPOA member].

“On top of all this,” the member says, “are the free forms online and the Michigan Landlord magazine. The RPOA is one of the few organizations I’ve belonged to that is worth its price. Imagine how much you’ll save if you own more than one rental?”

VERBAL ORDERS IN GRAND RAPIDS? SOME LANDLORDS ARE REPORTING THAT some Grand Rapids rental inspectors have told them that the City is no longer giving “verbal” orders for minor things that can be fixed quickly. This appears to be an inspector specific issue and not the policy of the City of Grand Rapids. Other inspectors are still giving verbal orders.

The RPOA did learn in the Fall of 2014 that some landlords were abusing the request for verbal orders and were simply using it as a way to delay the work that needed to be done. Ultimately, this doesn’t make sense as the cost for a written Notice of Violation would still

24

have to be borne by the property owners if they miss the verbal order timeframe and still have to make the repairs. If landlords were using this as a delay tactic it is unfortunate as this jeopardizes a benefit that the RPOA negotiated with the City to avoid expensive Notices for minor violations that could—in some cases—be corrected before an inspector leaves the premises.

If you’re experiencing a refusal to obtain verbal orders and haven’t abused the privilege, contact the RPOA Director at clayp@rpoaonline.org.

WHERE LANDLORDS GO FOR HELP

March/April 2015 MICHIGAN LANDLORD 25

RENTAL PROPERTY OWNERS ASSOCIATION

R.K. MECHANICAL Heating • Cooling • Gas Fireplaces Sales, Service, Installation Roy Kline Phone: (616) 677-3975 Cell: (616) 292-0462

0-1580 Fox Ct. Grand Rapids, MI 49534

Licensed Insured

BREAKFAST NETWORKING

Join Us! Real Estate Investors (REI) Breakfast Networking When Every Friday (except holidays) 8 a.m. – 9 a.m.

Where Cheshire Grill 2162 Plainfield NE, Grand Rapids, MI

Every Friday morning, dozens of real estate investors, landlords and vendors participate in the RPOA’s free breakfast networking event. Share deals with other investors; learn what’s happening now in the local real estate market; share your haves and wants; learn from other investors; hear short informational presentations on relevant topics.

26

The event is free except for the cost of breakfast. No registration necessary!

WHERE LANDLORDS GO FOR HELP

procedures & prices RPOA & REI DECISION REPORT REQUEST PLEASE FOLLOW THE PROCEDURES BELOW WHEN REQUESTING DECISION REPORTS FROM THE RPOA: ❑❑ When possible, please use the RPOA Decision Report Request Form and fax it to the RPOA office at 616-454-6163 OR send us an e-mail with the same information to: contactrpoa@rpoaonline.org. (DO NOT fax applications to us.) ❑❑ You must have the following minimum information to run a report: • First and last name of prospective tenant(s).

• Current address of the prospective tenant, including street with number, city, state and zip code.

• Social Security Number.

• Date of Birth • Your RPOA member #, name of membership, and an indication on how you would like the completed reports handled, i.e. faxed back to you (if so, provide the fax number), or you will call the office for the report, or you will pick up the report in person. ❑❑ WAIT AT LEAST THREE (3) HOURS before contacting the RPOA office for your reports. Though we can sometimes get reports done quicker, there are many things out of our control that can interfere with this process, including but not limited to credit reporting agency computer problems.

• Contact us for your decision report results promptly. For reasons of confidentiality we shred all reports after 3 days.

OTHER GUIDELINES FOR DECISION REPORTS: • You cannot run a decision report on yourself.

• You can only run a decision report on another family member if you are doing a business transaction with that person that is related to real estate or rental property.

• You cannot run a decision report for another business person, real estate agent or landlord. Your credit reporting privileges through RPOA extend only to your personal business.

• You can only run a decision report for a legitimate business transaction where credit is required. These transactions include owner financed real estate, leasing, collections and land contracts.

• You must follow all the rules and regulations of the Federal Fair Credit Reporting Act. A copy of this Act is available at the RPOA. • You must give a person denied housing or financing because of information contained in a credit report a notice to that effect.

Examples of notices that you can use and what needs to be included in the notice can be found in the RPOA office; or log on to the RPOA website (www.rpoaonline.org) and go to Tenant Screening.

REPORT PRICES (AS OF JANUARY 15, 2014) Single: $14.95 Double: $24.95 Criminal Report: $7.00 each

March/April 2015 MICHIGAN LANDLORD 27

RENTAL PROPERTY OWNERS ASSOCIATION

RPOA AD OCT-NOV_Layout 1 9/12/14 4:54 PM Page 1

Is it time to check your

Smoke Detectors?

Smoke alarm safety is very important.

Having enough smoke alarms and keeping them in working condition are important fire safety steps you can take to save lives in your home and in the homes of your renters.

BUY MORE AND SAVE!

SKU 50001194

Buy 20 - SAVE 10% Buy 100 - SAVE 15% Buy 200 - SAVE 20%

SKU 5069026

Grand Rapids City Approved Detectors

Rylee’s

Grand Rapids - 1234 Michigan St. NE 616.451.0724

Install a smoke detector in every bedroom of your home and in the hall that leads to one or two bedrooms, and make sure there is at least one on each floor of your home, even in your basement.

Test your smoke detector each month and replace it if it doesn't work or if it is already 8 to 10 years old.

Replace your smoke detector batteries at least once a year and especially when you hear the warning signal that the battery is low.

Hardware

1205 Fulton St. West 616.233.4711

Walker - 4300 Remembrance Rd. 616.453.7741

OPEN TO SERVE YOU: MONDAY - SATURDAY 8AM - 8PM, SUNDAY 10AM - 5PM

28

WHERE LANDLORDS GO FOR HELP

Full service plumbing and drain cleaning

BEST

Plumbing and Drain Cleaning

616.212.7907

Ad-o-Grams APPLIANCE SALE Refrigerators, ranges, washers & dryers. Nice selection, all guaranteed, and delivery service.

Modern Appliance, 809 College NE, 616-4567039.

24 hour service available Licensed and insured Free estimates

CARPET CLEANING RPOA members receive 25% discount. Premium carpet care at affordable prices. Call RPOA member Dave Bigelow at 616-822-4710 or Grand Rapids Carpet and Furniture Cleaners at 616-453-5368.

EVICTION CLEAN-UP AND DUMPSTER RENTALS Never have stolen tags again! Clean-ups starting at $35. Or rent one of our 10-, 15-, or 20-yard dumpsters for your remodel or clean-ups. Starting at $175 including dump fees! Call Executive containers at 616-862-5246.

SOS HOME REHAB LLC Repair/remodeling for management companies/ homeowners. Inspections to evictions to move-in ready apartments. Certified in HVAC, lead and mold.

Call Shane Sarver, 616-446-4899; email: ssarver@ soshomerehab.com. Licensed, insured, efficient.

Advertise in Michigan Landlord!

Contact RPOA Ad Salesperson, Kathy Bartnick, at 616-318-3503 to reserve your ad space today!

March/April 2015 MICHIGAN LANDLORD 29

RENTAL PROPERTY OWNERS ASSOCIATION

BOARD OF DIRECTORS President: Bert Heyboer (616) 719-0819 E-mail: bertheyboer@gmail.com President Elect: Tom Koetsier (616) 550-4447 E-mail: tkoetsier@grar.com Secretary: Mark Troy (616) 452-4200 Email: mtroy@compass101.com

1459 Michigan St. NE / Grand Rapids, MI 49503 Phone:

(616) 454-3385 / Fax: (616) 454-6163

E-mail:

contactrpoa@rpoaonline.org

Web Sites:

http://www.rpoaonline.org

www.MIrentalguide.com

www.tenanthistorywebsite.org

Office Hours:

Mon 8:30 AM-5:30 PM

Tue–Thu 9:00 AM-5:30 PM

Fri 9:00 AM-5:00 PM

The Rental Property Owners Association is a nonprofit business association whose mission is to support and facilitate its members’ success in real estate investment and management.

Treasurer: Mark Andresky (616) 855-1979 E-mail: mark@performanceba.com

OTHER BOARD MEMBERS: Kathy Dennison Adrianse (616) 257-9577 E-mail: kdennison@grar.com Steve DeKoster (616) 560-3459

E-mail: sdeko@aol.com

Allison Koetsier (616) 633-9445

E-mail: akoetsier@compass101.com

Keith Littlepage (616) 669-8809

E-mail: successinvests@att.net

James Loftus (616) 889-0488

E-mail: loftja@gmail.com

Phil Mol (616) 458-8200

E-mail: philmol@grar.com

David Phillips (616) 745-6683

E-mail: davidrphillips@charter.net

Kim Post (616) 891-0500

E-mail: kim@postandassociates.com

John Potter (616) 318-1549

E-mail: jpotter@grar.com

Russ VandenToorn (616) 965-2300

E-mail: russ@rentupm.com

Brian Zeemering (616) 608-0940

Email: bzeemering@gmail.com

Past President: Ann Siebelink-Finkler (616) 328-5475 E-mail: annfinkler@gmail.com

RPOA STAFF: (616) 454-3385 Clay Powell, Director Ava Grover E-mail: avag@rpoaonline.org Kathy Rozenek E-mail: kathyr1@rpoaonline.org Heather Vandenbos E-mail: heatherv@rpoaonline.org

RPOA DIRECTOR & MAGAZINE EDITOR: Clay Powell (616) 454-3385

E-mail: clayp@rpoaonline.org

AD SALES: Kathy Bartnick (616) 318-3503

RPOA ATTORNEY: David Hill (616) 254-8417 30

E-mail: kvallie@aol.com

Haven’t signed up yet?

The Home Depot 2% RPOA Rebate Program Sign Up for The Home Depot Rebate Now! The RPOA membership in the National Real Estate Investors Association makes RPOA members eligible to receive this extremely valuable rebate.

Sign up for The Home Depot rebate program through the RPOA and receive 2% back on all your purchases*— no matter how small or big. This rebate is on top of any other discount or sale price, including contractor rates!

Call the RPOA today and start saving!

616-454-3385 * For semi-annual purchases over $1,249. Rebate checks are sent out semi-annually, usually in March and August.

MICHIGAN

LANDLORD THE PUBLICATION OF THE RENTAL PROPERTY OWNERS ASSOCIATION 1459 MICHIGAN STREET NE, GRAND RAPIDS, MI 49503 PHONE: 616.454.3385 FAX: 616.454.6163 CHANGE SERVICE REQUESTED

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Grand Rapids, MI 49503

Permit No. 553