Friday, August 20, 2010

Interview with Landlord Brian Kallioinen from The Sentinel

This ridiculous, rambling piece of junk came to me via email. Evidently someone typed the whole fracking thing up since folks over at the Sentinel rag haven't yet heard of da internetz. Prepare to bleed from your eyeballs.




Landlord Brian Kallioinen on Struggling with Tenants, Inspections, and Financing


Q:  I saw that you've had a foreclosure.

A:  "Yes...My biggest problem was the turnover and the people being not able to pay.  And with my buildings being so marginally - if you don't get the full rents completely every month, you're running behind.  So that by the time - after about a three-year period with all the turnover and all the wrecking and all the trashing by these tenants, I could not make my ends meet -  period. (so why didn't you QUIT?)  A lot of that started because I had to pull mortgages out of these buildings in order to develop what I was doing. (which was FAILING?)  So my mortgages were not untenable, but they were not strong enough to handle the turnover problems that I had.

"...And I do very wonderful work.  My buildings are in great shape. (Bwahahaha!!!!!) The problem was that you could not find quality renters. (You?!? You who??? Oh... YOUUUUU - douchebag)  The renters are either unable to pay, because of poverty, or there's other problems with just the milieu of North Minneapolis.  And to find quality people was almost impossible with the pressures of needing to have your places rented.  So, not that your standards were being dipped, (rigggght...) but I had a building empty for a year, at one time.  You cannot sustain that.  You can if you've got what I was trying to do, but when I sustained losses and losses and losses, at a certain point you have to say, 'This is not working.'  So I had to let five buildings go. (thank god for those five buildings - did you put in your application at Cub Foods yet? I bet you'd be great at stocking shelves)  That sounds tragic, but the reality was that's where I ended up.

"A lot of it started because I was associated with a non-profit and we developed my two four-plexes.  And we started out on the wrong foot because the buildings were too expensive from the beginning and I had to pull out money in order to develop these two buildings.  In the end, those buildings I got - one was a non-sub-prime loan, the first one - and that one I still remain with.  And the second one was a sub-prime loan.  It started out at 10% because I had no other way to pay off GMHC's (Greater Metropolitan Housing Corporation - a large non-profit developer) 3% development loan.  So there was a demand of payment and the only loan I could pick-up was the sub-prime.

"That sub-prime started at 10 1/2%, went to 11 3/4%, and at 11 3/4% the building was completely out of whack - there was no way I could sustain it even though I put in a year of very hard labor on the building.  So that was the beginning of my collapse."

Q:  Finding tenants was critical.

A:  "I had a property management person who basically had such stringent requirements that I couldn't fill up my apartments.  Her mindset was Edina. (like, dude, she wouldn't rent to the wife-beating, dope-smoking, diaper-throwin-in-the-yard-type losers I prefer, yo!)

"...The Police, actually, after the third knifing and blood on the street and shootings and the whole stupid mess - which they were blaming on my property, (!!) which I probably was, (!!) because I had two Chicago tenants in my buildings at that time, (I AM FROM CHICAGO you jerk) it took me a long process to get them out of there - the Police required that I do something.  And what I was doing wasn't correct.  And so I had to - they recommended Leola Seals, which is a very hard-nosed property manager, and so that's when I got her and she really cleaned things up. (yeah we can see how cleaned-up things are now, Brian)

"You know, I think one of the rules of all North Minneapolis should be you do not hang on the front porch.  (You know, I think one of the rules of North Minneapolis should be no idiots allowed to own property.) Period.  Even though I've got beautiful front porches - that was the draw of these beautifuli buildings - you cannot let people on the front porch.  Because it's - they're not well-behaved.  No matter what starts happening - a blunt starts coming out and before you know it, there's a party and the party then leads to all night long and before you know it, you've got mayhem.  It's just part of the neighborhood issues, you know, which just goes back to society and culture. (And people like you.)  And that's where I get back to where I don't want to be in this neighborhood because this culture - I don't understand.  And I do need to get away from it. (GET. OUT.) Because I'm still a bit burned out from it.

"...So my problems were a bit self-created because I purchased the buildings and took loans out on my buildings to develop these two four-plexes.  And then the two four-plexes was like a domino set in the last three years, with the inability to find quality renters, the turnover rates that I had, the evictions, and the fact that a lot of the tenants we were accepting were from Chicago with clean slates as far as we knew - as far as the background checks.  But the Chicago mentality basically turned my corner into a nightmare. (What mentality is THAT you freaking racist idiot??)  And so you'd go through three or four different tenants over a two-year period, that basically took something and turned it into something you couldn't understand anymore."

Q:  Speaking of tenants, I've heard talk from other landlords of there being almost like hit-squads of tenants that are going around pushing properties over the edge - I've got some names.  So I'm wondering if you recognize any of these as tenants that were problems:  Teresa Werren?  Tommy & Yolanda Davis?  Stephan Sellers & Joyous Glenn?

A:  "Stephen Sellers - my God!  There was a nightmare."

Q:  Tell me the story.

A:  "They basically had the story of moving in from Maryland - nice couple, nice kids, it seemed.  Attractive people."

Q:  When was this, roughly?

A:  "This was last November.  And he gave us a very soft sell.  He got the Emergency Assistance - because that's one of the weak links in Minnesota, is the Emergency Assistance Program.  I t hink they p ut up billboards in all the states besides Minnesota that say come to Minnesota - you get your first month's rent and deposit - free!  So that's where he started in my world. (You know you like that shit - it's the only way you can fill your filthy rat-holes - with people who have no options.)

"Of course, after the first month and deposits there were no payments.  I was trying to [work] with him - and this is what happens with all tenants.  You try to work with them for the first month, after they start having trouble.  And they play with you by giving you a third - you know, maybe a half - of the rent.  The next month, they're going to catch up a little bit more, they get a little bit more beyond - maybe it's down to 40%, then it's 30%.  So before you know it, you've got four to five months used up before you go to the eviction.  There's eviction costs then, because there's kids - so in the end, you've got a minimum of three months involved.  A lot of times you've got five or six months involved before it's just - you can't handle it anymore."

Q:  They portrayed they had jobs, I assume.

A:  "No.  She had a census job for a few weeks, but then she had medical problems and she had to leave the job.  And I had actually hired him - he was this heating contractor, and apparently - he seemed like he was going to be able to get a job in a moment's notice, but of course that didn't pan out for him and so it just started slowly turning into a train wreck.  And that was on of the big triggers where I had to let the building go with him, too.

"When you have the mortgages on the buildings and you already are having trouble making your mortgage payments on top of everything else and you've got the property in North Minneapolis which ends up grinding you into dust because you can't make your payments - after a certain point, after many years of dealing with it, you get to the point where it's not worth it anymore." (So get out of the business you hack.)

Q:  So that particular tenant was kind of the tipping point?

A:  "Yes...It pushed me over the edge.  This was, like, last April when we finally - it was June - when we finally had enough of them, and at that point the building was already way behind on payments.  And it was like, I can't do this anymore.  And I cannot make those payments.

"And the problem was, when you have a larger home, you've got a quantum problem because htne you've got a family with more kids, with more poverty, more problems.  (So why did you buy it?) And so - Like, I had a building right - 2431 4th St. No. - it caused some problems because it was a five bedroom home.  And that five bedrooms means that you've got too many kids, too many people, too many problems, too many drugs, nobody making money, just one thing after another.  And it was just one nightmare - for a period of eight years - just a nightmare for  me.  Actually nine years.  Just one problem property after another. (That's because you are a slumlord.)

"And the problem was that all my other buildings were floating my bad buildings and you'd end up with nothing at the end of the year.  You're not able to make anything work - because nothing works.  Nothing works in North Minneapolis." (No, nothing works when you are a moron.)

"It's so frustrating I couldn't believe it.  And at this point, I'm just waiting for another year to go by because I hope to be in a different spot, physically, because I really don't know if I can stay here.  Because I don't respect this neighborhood." (It doesn't respect you either. GETTHEFUCKOUT!)

Q:  Tommy Davis, Yolanda Davis.  I had seen them listed as living at 315 25th Ave. No. - is that your property?

A:  "Oh, yeah.  That was them.  They were pretty - Yolanda.  Tommy.  Yes, they were - my God!  I've had a string of people at this level."

Q:  Did they also affect the outcome of the building?

A:  "Yes!  Because they're just - they're constantly behind in rent, you know they bring the cockroaches in, they're very filthy people, and I see that just over and over and over.  The filth and just the whole level of functioning is upside down.  The poor communities are upside down.  There are some serious problems.  And I - being an ex-teacher and a philosopher and a flaming Democrat, know t hat there are a lot of reasons for this.  But there's such deep dysfunction in that community, it's just hard to  understand after a certain point.  And after being exposed to it now for 15 years, you want to run from it, you just want to get away from it, because you just see too much of it. (RUN! RUN FORREST, RUNNNNNNNNN!)

"...It's just a constant, constant nightmare, for just the poeple in North Minneapolis who are, again, indigent people, poor people.  You know, I understand the African American experience. (Oh HELL NO - he did NOT JUST SAY THAT.) You know, I'm very conscious of the social problems.  But it creates exactly what we've got, though what we've done at our society.  You take any experiment on another planet, it's going to cut out the same exact thing with what we have."

Q:  Economically.

A:  "Economics.  It grinds people into dust and that dust will turn these--especially the African American male--into an animal.  Because they have no choice, they have no hope."

Q:  What do you see going on in the area in terms of changes?  Who's moving into the area?

A:  "Again, my fears--and I'm seeing it--is that the investors are coming like vultures.  And they're taking over, so we're going to have the same problem again.  And that's why, you know, you're talking about the City buying properties--I'm happy as hell for the City to buy properties because I hope that the rehab will work out well and I hope that they can make it a requirement as a home owner.  Home ownership is so vital for these communities and it's--they're wonderful communities. (Wait - what?) I'm working on a building right now just four buildings south of here.  Wonderful, beautiful woodwork, beautiful building, and I hope to find a family.  And there's a requirement it will be a family, it will not be an investor."

Q:  You'll sell it--or you'll rent it?

A:  "It has to be sold because I've got invested in this--this is another one of the quagmires I got myself into--with GMHC money, they allowed us to buy this building a year-and-a-half ago.  For $24,000--which is a steal."

Q:  They buy it and then--

A:  "GMHC bought it through the non-profit that I was working with originally, even four years ago.  They know the work I do."

Q:  Who was it?

A:  Third Way Network.  And so, we purchased the building with the work of Paul Halvorson.  [Third Way Network] saying that we can rebuild this building.  GMHC was going to allow us to use 3% money to develop this building.  Well, then GMHC pulled the plug on funding, for whatever reason. (cuz you're a bigass liability?) So I ended-up with a code compliance home with nine months to complete--six months they give you and then they give you a three month extension--in the middle of fall last year where I had no more funding.  Of course, come this summer, with my own money that I'd been able to accrue through working through part of the winter, I started working on it again but, of course all the permits had expired because of the code compliance.

"Well, this has been a thre month period and I almost feel like I'm the poster child for what goes wrong with the City's policies and how they drag this on.  It's been three months now that I cannot pull permits to finish this building.  So I'm finished up--"

Q:  Why can't you pull them?

A:  "The code compliance permits expired in April because they gave us six months from April of last year--six months on that--and they gave another three month extension without really knowing--all you know is the clock is ticking.  Now you get back on track, you start working on the building again, and you find out that you can't pull permits again because everything has expired.  You start from Step A--you've got that $10,000 bond or $6,300 vacant building registration fee, and you've got a $2,000 code compliance bond again, and you've also got another code compliance inspection, which is going to cost you another $230.  So all-of-a-sudden it's like the slate was completely wiped clean come the end of--"

Q:  So how are you dealing with that?

A:  "You don't!  I ended up--I'm still working on the building, the building is completed, it's actually listed on the MLS right now.  But I can't finish my permits.  I've got my plumbing--it's basically the walls are ready, I pulled fixtures away, I'll be able to get my plumbing finished.  That's the best I can do.  I've got to finish the building because we've got GMHC, we've got Tom Deegan [City Inspections], and we've got Diane Hofstede [Council Member] and we've got my Third Way Network--they're all trying to work this thing through.

"But I believe that the situation is that they can't change their rules, because the rules have been written.  I was caught in the middle.  Because GMHC pulled the funding last fall, I had no choices, I had no wherewithal to work on this building, so the clock is ticking, the clock ticks.  And the bomb went off."

Q:  What do they expect will happen?

A:  "No one knows.  There's no one in control, and that's one of the weak links--that they should have--if you buy a home here in North Minneapolis without code compliance issues, you've got no problems.  You can sail through, you can do whatever you want to, take as long as you want.  But if you buy a code compliant home, you've got the--well, I call it the rod up your ass from the City, right now, and it's never going to go away.  (rules are rules, man, you expect special treatment?) And they will not help you, they will not figure anything out.  The clock is ticking.  And even when I look at this timeline--this eight months would have taken me eight months, by myself on this building, period, just to get this job done.  But I had that lag time between last fall and this spring when I started up again on it.  So it's very stringent code requirements and there's no--it's an ugly monster without a head."

Q:  Because you can't finish it and you can't make money.

A:  "Right.  They can't see the forest for the trees.  And they're basically--if I wasn't such a strong individual in terms of just trying to chip away at this project with the money that I can find, I would be ruined.  Period." (awww - need a hug?)

Q:  Is this a common thing?

A:  "I have no idea, but I've heard a lot of grumblings.  All I know is that anybody knows if it's a code compliance home, run, as fast as you can, away from it.  Because you're going to--in particular, there's the little code word for the plumbing.  You get an old house that's got 80-year-old plumbing in it, and of course you use a visual inspection on it and see everything seems intact.  But there's the plumbing--code compliance will say, 'Insure the integrity of the plumbing.'  Well if you've got old, cast iron plumbing, there's no way in God's earth that you're going to make that hold in a manometer test at the end [of the inspection process].  You're not going to hold.  Because it's got little cracks and they're old lead.

"So the reality is that once they say that on a code compliance house, that means all your plumbing will basically have to be thrown out in the dumpster.  Period.  Every last piece of cast iron and you've got to start new.  So that's a $6,000-8,000 problem that they put on your head right now.  Whereas, if it wasn't a code compliance house, that would not be an issue.  It's just, you know, if you do new plumbing, then test the new plumbing.  But it's not--and visually inspect all joints on the other plumbing.  But because they say it has to hold a manometer test, which is your final test, you're never going to hold it, so any plumber that goes in there knows that all the plumbing's got to go.  And a lot of houses maybe the plumbing does have to go, but on my particular house there was no problem with the plumbing whatsoever but I had to reach that level of perfection on that plumbing.  And I don't think that was really very appropriate." (yawn)

Q:  Is the City trying to--

A:  "I think the City is a monster without a head.  It's just a monster without a head."

Q:  You don't think there's an intention--

A:  "No, I think it's just all like any government--everybody complains about government because there's no real--once the law is written, the law is on paragraph 3, sentence 4--there it is.  You want to change it, go somewhere else." (GO!)

Q:  Be careful--you're sounding a little Conservative!

A:  "Well, I am--you're right on.  But I think that's the problem--there's no real gray areas, no real look at the forest for the trees--what's going on here?  You know, what is going on in the buildings that don't get code compliance?  There's nothing happening there--you can work all you want as long as you don't get caught.  But in a code compliant home, the City has you by the proverbial short hairs and they will not let go.  And then you've got the time bomb ticking, too, on top of that.  I think it's--you know, their anger for contractors is misplaced."

Follow-up

Q:  What's happened with the building where the permits had expired but you were trying to get it done?

A:  "I had a buyer--I finally got it done.  I really had to slog along.  Boy, it was like--feet of clay for--just get out there and get on it.  Just push on this building.  But it turned out beautiful--wonderful, fascinating building.  Somebody wanted to buy it in December, but he couldn't get financing, which is another debacle of the banking series.  You know, she's--she had good credit, good job, blah, blah, blah--but the bank said no.

"So that fell through, but we found within--after the code compliance got cleared, because there was another glitch with the code compliance.  One little--it was a $35 problem.  Because it was a code compliance problem with the City, they finally approved me by GMHC applying the $10,000 bond again, by just word of mouth through Paul Halvorson, they were able to get that glitch out of the way.  But it took me three months to get that whole thing back on track.  So I could not complete it nor could I put it on the MLS because of all the little glitches.  And it all happened because the plumbing inspector said, 'Well, you've got to pay your two fixture fees,' you know, which were just two little $35 fees---$70.  But, of course you couldn't pay the fee because you didn't have any code compliance!"

Q:  A Catch-22.

A:  "A catch-22--you couldn't pay the fees."

Q:  What were those fees for?

A:  "I think it was the water heater installation and the dryer vent--just a dryer vent.  So three months later we finally get the clearance, which took us until--it was only four or five weeks ago when we put it on the MLS.  And it sold within 48 hours.  And it was a better price because actually, I was going to sell it for $79,900 to the person in December, but because we waited and the market got a little better, the person came in and it was listed at $94,900 but she offers $105,000 with three points, which means it worked out to $101,000, which is better.  So through time, it turned out better for the price.  But the reality is I ended up making about $4 an hour on the whole project because of all the expenses and all the delays and all the costs and you just--and that's the business that we're in sometimes.

"...So there's nothing you can do.  And so we just had to stop--that was all of last winter--of 2008-09.  And then I was finally able last summer, about June, to start cranking on this building again."

Q:  So you were finally able to--

A:  "Make it work, but it was all done through my own cash."  (oh gee- that's rough - you had to use YOUR OWN MONEY ON YOUR OWN PROPERTY, OMG). 


Q:  But they just about got it back from you--with your improvements--which would have been a windfall for them--

A:  "Another tragedy, just because of--well, it--"

Q:  It would have been good forthem to get a building back--with improvements.

A:  "I imagine--right.  But there was was I'm sure I could have put a lien of some sort on it--and maybe made more money, if--who knows what it was all about.  But threre could have been a process I could have dealt with."

Q:  Are you still planning long-term, or maybe even short-term, to basically pull out of this area, the Northside? (please God say yes)

A:  "Right now we're in a real transition point.  If we can get homeowners in the neighborhood, people with values, who won't do the gunshots and won't do the trash, and just basically turn it around with home owners, then I think we've got a good, fighting chance and I may hang around.  there's nobody in the neighborhood right now--it's all empty.  It's still empty.  You know, slowly the investors are turning things around, but I'm afraid of what the investors might end up with here because of the same problems I have--you cannot get quality tenants.  Well, why can't you get quality tenants? (because you're an idiot - ever heard of craigslist and cleaning your places up?) That's a very good question, but it's still the quagmire. 

"...This is very challenging.  Being a landlord in this neighborhood is just unbelievable.  My experiences are just--poster child for it, I guess." 



Ow my head hurts.

5 comments:

  1. So if Brian can't make money off of his rental properties why the hell is he giving Jeff Skrenes FREE RENT???????
    He could be collecting...what...maybe $650 a month for that dump. But instead he gives free rent and then bitches that he can't afford to maintain his properties because his renters don't pay!! WTF??
    If you give free rent you don't make money you dumbass. Even the drug induced guy sleeping under a bridge knows that.
    Which is exactly where Brian Kallioinen is going to be...soon.




    Brian Kallioinen

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  2. Brian K was bitching griping and fretting about all of this two years ago at the first Heart of the City cookout in Hawthorne. You're right, he's not only a douche, he's a moronic douche.

    JP Greenburg, who "writes" the Sentinel is one of the coo-cook-clock conspiracy malcontent schizophrenic-political-idealogy northside whackjobs. The crap he has been "writing" in his sentinel has always been so far out in left field it's not even in the game.

    And seriously, don't they know blogspot is free??? His shit ussda-be photocopied on xerox paper with a staple in the top left corner and hand delivered to those he thought were worthy. I can still remember him walking up my front sidewalk and sticking that crap in my mailbox. Good Grief.

    I do agree with and sympathize with some of what Brian K is bitching about. Emergency Assistance. Unbelievably fucked up renters who are really good at the sob story heart-string manipulation and then they inflict a tsunami level of wear and tear on the property. It really is unbelievable. And what is scary is there is a whole class of people who live like that. Six months here, 9 months there, three months at next place... just constantly moving into one new place, destroy it and wear out welcome and onto the next. The northside rental market is sooooo unhealthy, dysfunctional and completely fucked up.

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  3. I have it on good authority that Jeff is paying more than $650. Which is kind of sad considering how gross and scary BK's buildings are.

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  4. Any chance Jeff Skrenes will be covering the code violations of Brian Kallioinen owned properties in his blog?
    Looks like some of Brian Kallioinen's properties are just as bad as Pamiko, DannaD, and Khan.
    Apparently Brian gets a free pass since he gives Jeff FREE RENT.
    And why don't the housing inspectors crack down on Brian Kallioinen the way they do on Khan and Mohgul?
    One has to wonder if there is some special treatment given to a FREE RENT providing slumlord. Sounds like there's a conflict of interest here.

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  5. Hey AntiJohnny-JordanHawkman-JimWatkins(anon1118)

    ever hear of the phrase "don't shit where you eat"? C'mon, ya got to give Jeff a little credit for not being that dumb.

    ReplyDelete