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An Idea That Apparently Is Too Hard To Grasp For Some Patnetters


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2022 Apr 29, 4:10pm   1,914 views  81 comments

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TOk, tell me how this doesn't work.

Note: That means you have to actually fucking read through this and familiarize yourself with the details. Don't post critiques that only prove that you didn't do so. I will rip you a new asshole if you do.

But otherwise...rip away:

Can't wait until someone figures out a way to get people to rent their ADUs out to a firm that then sublets it to 50+ remote workers. That way, they can all say they work in Palo Alto, etc, pay CA income taxes...the works. They have official residence status and get paid Cali wages. But the ADU won't be physically used except on a first-come-first-served basis for when any of those subletters have to actually show up for one of the times they have to be in town. And it is not like the neighbors will notice this and complain to authorities, like they occasionally do when they notice apartments have 8 people living in them. There will only be one or maybe two people staying at the ADU at any given time, as is legal to do.

I would pay $300/month for that. Esp if I moved to a no-income tax state.

$300/month for 50 subletters = $15,000/month for the ADU. I am surprised homeowners haven't set up an LLC to do just that with their ADUs.

Again, before some of you pick holes in nothing because you didn't pay attention to the above details (which are everything):

ADU owner 'rents out' his unit to an LLC/Corp entity. Esp an out-of-state one, preferably. That firm then sublets the flying fuck out of it to 50+ remote workers. Think of this as sort of like a remote worker AirBnB. It's like a timeshare, where if the subletters want to actually use it, then they have to reserve it and pay a cleaning fee, etc to use it for a short period of time. All reserved up so other subletters can't use it when they want to? Easy, they go to Motel 6 while in town. Early bird gets the fucking worm, assholes!

This way the unit is legally rented out to one tenant as far as what the homeowner is on the hook to report or care about, technically. Even if the homeowner owns the tenant legal entity.

I suppose that the State would figure out that 50+ people 'live' there because of what they report on their tax forms and driver licenses, etc. But apartments with 10+ people also show up in those records (migrants...both legal and illegal) and they don't give a fuck about that.

Any other holes in this?

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29   GNL   2022 Apr 30, 9:54am  

How big is the market? I suspect it is more than just California this would work in. Probably many many large cities. Come on guys, let's get something going.
30   WookieMan   2022 Apr 30, 10:43am  

HunterTits says
Ppl work from the out of state secondary homes all the time, ppl. So Podonkia will collect my property taxes on it and just call it a day.

Homeowners tax exemption is something to factor in. Not a huge break anyway, but you'd have to pay higher property taxes in Podonkia if I'm following correctly. So primary is in high pay CA, but you don't actually live there and can utilize the space when required for the occasional quarterly meeting to stay at or whatever and earn more money because of COL. Spouse can work in income tax free Podonkia AND your house is substantially cheaper than CA. So the $300/mo on the ADU is not a big deal.

Not a dig, but I'm reading what you're saying, but it's not 100% clear to be honest.

If I'm understanding correctly this is what I think you're talking about:

Work in silly valley, but are allowed to work remotely, but pay is based on where you live.
If they know you live in Milton, FL where you can get a $200-250k house, they pay you less working remotely?
You get the job and say you live at 123 Maple Ave in San Francisco at the ADU.
You get your 6 figure job in CA and have a cheap house/COL somewhere else.
If married spouse can work in FL and have no income tax, while you still technically live in CA and pay their taxes.

If I'm following it's somewhat similar to trucking companies getting Maine license plates for their trailers. They don't live or reside there, pay the registration fees to Maine and any other applicable taxes, but it's substantially cheaper than say getting registration in IL or CA if you're the trucking company.

Basically I fly out to CA, get a job with Apple. I rent the ADU and list that as my W-4 address, but I'm really living in FL and Apple allows me to work remote. I pay CA income taxes on my income, my spouse pays no FL income taxes if they work in FL. You then get a cheaper house than you could get in CA but Apple thinks you live in CA for the $300/mo.

On the business side you're renting out a single ADU to multiple people in CA and raking in some income as no one generally will use it and you likely won't get caught as long as you document the rents and pay appropriate fees/taxes. It makes sense if I'm following correctly. You generally have to just provide gross income on rentals, you don't have to report the leases or number of "tenants" so to speak.

Audit issue I see is if the gross ADU rental is insane. If there's a red flag on your taxes, an ADU getting $15k/mo is just that, a red flag. IRS can/will do a quick GIS map search of the property and know that income is way more than should be coming in. The renters paying $300/mo would have to not write of the cost as you kind of mention. IRS will flag that shit in a second if 50 people write off a lease at the same address and it's discovered it's an ADU.

It make sense for as long as it's allow and you're prepared for legal fees. Just because something is legal, doesn't mean a local muni or state will not try and take you to court over it. It does sound like a good idea or a win/win for homeowners with an ADU and the remote work employee. Hell even the employer as they'll have a happier employee likely having an employee living in a lower COLA, but they would necessarily know it's basically a BS address.
31   WookieMan   2022 Apr 30, 10:49am  

TL:DR - It's a good idea for property owners with an ADU. I'd be careful with "over renting" so to speak would be the only suggestion. Or buy the house in an LLC as you say, rent the main space and then an ADU. This is actually a great idea if I'm getting the idea correctly.
32   Ceffer   2022 Apr 30, 10:57am  

I don't think I would want the 'proxy liability' if these timeshare renters don't pay their taxes, commit crimes, use the place as a cover for illegal activities etc. especially if you are giving them an address (yours) to exploit as flybys? It sounds like you are renting out your address more than renting out a space to a variety of John Does, with the space itself as a pretense for temporary rental. What process would you have to implement to vet these guys? It would cost more than $300 a month to require them to carry their own insurance, which would be defined as what exactly?

Sometimes if officialdom comes sniffing around to skip trace a timeshare guy using the address, they might just think the owner is the next best thing to arrest or extort. Insurance would be a nightmare. The 'clients' are all scattered to the wind, but you are standing there with the official bullseye on your back for every obscure regulation and requirement that a predatory bureaucrat could drum up. I can't see keeping something like this 'under the radar'.

When I had business at a specific leased address, the first thing I noticed was that I was a sitting duck target of every regulator, tax shill and fee bandit who was aware of my address, which I had to promote to promote the business. I remember getting all of those dunning and tax letters for employees who only were there a short time. Having a bunch of people funneling through an address with you holding the bag for the address itself does not sound like something that would last long without negative consequences.
33   Patrick   2022 Apr 30, 10:59am  

There are generally rules against renting to groups where the number of people is greater than (the number of bedrooms + 1).

Could be a problem.
34   Ceffer   2022 Apr 30, 11:21am  

"ADU owner 'rents out' his unit to an LLC/Corp entity." Whose name is on the ownership for the main property, which I assume also holds equity in the property (or not)?

How legally impenetrable is this corporate 'shell', or will there be different layers of corporate shell to create a legal fortress from assault that would exhaust seekers of liabllity, tax liens, contractor liens etc.?

I think this is something you would exploit for a calculated time before the temperature started going up, and then abandon, or shift to another address to rinse/repeat trying to stay ahead of any generated wolf packs, kind of like a boiler room operation.
35   mell   2022 Apr 30, 11:49am  

HunterTits says

Patrick says
There are generally rules against renting to groups where the number of people is greater than (the number of bedrooms + 1).

Could be a problem.


Where is that happening when the landlord is only renting out to a single tenant, the LLC or whatever? :)


The total number of people living in a dwelling are the deciding factor ultimately, no? No matter how you structure the entities in between. Also maybe neighbors will tell on overcrowding? The govt will keep looking the other way for migrants but as soon as fucking white males are profiting from it they will shut it down. Interesting experiment, but I'm sure in most of the bay area it's already violating some short term rental law. I can see it working in big cities with looser laws
36   Ceffer   2022 Apr 30, 11:50am  

Seems there is a fraud argument in there somewhere. These 'workers' really don't reside there as an official address any more than they reside at a hotel they took a hooker to for an hour or a post office box, but are representing it as the address they use during employment for residency and tax purposes. If fraud unwinds the corporate shell, then liability goes right back to property owner?

Avoiding the liability magnet appears onerous and unworkable in the long run, unless there is a babushka doll series of corporate entities that are too expensive to pursue. Who would want to get bogged down in any kind of lawsuit or government agency attention/ suits for $200k a year, and threaten whatever equity might be held in the property proper? The payout would have to be higher, and the risk lower to consider it. It sounds like it is scaling up liabilities against a frail ADU LLC pretense, without an adequate payout. I don't see the long term net vs. risk, effort and potential trouble. It also sounds like a cover operation for foreign labor which could have other legal ramifications.

In Santa Cruz, some Mexicans run an illegal alien 'hotel' across the street that has been there ever since we have had our place. There are cars and trucks all over the place, and two Mexican women who go on 'outcalls' of some kind in a Nissan Rogue. They keep a tight lid on the place, no noise though once in a while a drunk might come out and stumble around. I think the trucks are leased to the migrant illegals who use them to do labor, and it is basically a worker's hostel. I have never seen them get in trouble over it, but who knows, I imagine they do all cash business and employment outcall to keep them 'under the radar'. Once you start getting into SS numbers, tax ID's, 1099's, etc. the can of worms can grow.
37   Tenpoundbass   2022 Apr 30, 12:03pm  

so you want to rent your backyard shed to meth heads, and you want to know if that would be cool?
Then you go on to say those meth heads could sublet to all of their street buddies.
How could you possibly lose?
38   Al_Sharpton_for_President   2022 Apr 30, 12:20pm  

HunterTits says
An Idea That Apparently Is Too Hard To Grasp For Some Patnetters

39   GNL   2022 Apr 30, 12:49pm  

Ceffer says
for $200k a year, and threaten whatever equity might be held in the property proper? The payout would have to be higher,

30 ADUs at $5,000/month. 50 people/ADU paying $300/month. The math is $150,000/month for ADU rent with $450,000/month coming in to the LLC/Subletter. LLC income per month = $300,000.
40   Rin   2022 Apr 30, 1:45pm  

HunterTits says
Rin says
Here's the thing here, you'll need two VPNs. The first is the one which boots up with your desktop and the 2nd, for the work itself (usually given by your firm's IT dept) on the same hardware. Sometimes, these things can conflict in terms of security settings between the differing software tools.

A better way is to get a Virtual Hosting Server where in effect, your workstation is on a server farm somewhere in California and then, using your home PC, you log onto your virtualized workstation & then, you separate your work & home computing environments completely. By doing all, all your IT updates and packages get delivered to a remote desktop far away from home and then, your IT dept knows nothing about you.


Ok. Perhaps I am missing something here, but why would I need that?

I go to a park. Use my cellphone Hotspot to work remotely. Does that mean my legal residence ...


If your firm's IT & HR depts don't run reports on login data then yeah, it doesn't matter.

On the other shoe, there are companies which do log info on their telecommuters like IP, logon duration, & even activity and run audits.

Now, since many companies have their telecommuters download their own VPN client w/ specific security settings for the firm, applying one's own over that, may be difficult.

So if you're in a park in Lafayette Indiana or an hour away at home, in let's say Indianapolis, & tell your Santa Clara CA firm that you're in California, eventually IT/HR will flag that at least 80+% of your logins were coming from Indiana and not Silicon Valley.

If you buy a 7x24x365 hosting service in LA, however, your private server running Windows 10 will always be in SoCal so you can remote desktop with your own laptop's internet connection plus VPN whether it be in Lafayette, Indianapolis, Honolulu, Toronto, Little Rock, and the HR folks will always believe you're in SoCal. The firm's VPN will stay on that hosting server to form that tunnel to the corporate LAN.
41   Ceffer   2022 Apr 30, 1:52pm  

WineHorror1 says
30 ADUs at $5,000/month. 50 people/ADU paying $300/month. The math is $150,000/month for ADU rent with $450,000/month coming in to the LLC/Subletter. LLC income per month = $300,000.

Are you talking about 30 ADU on a single property, or 30 ADUs on 30 separate properties?
42   GNL   2022 Apr 30, 2:02pm  

Ceffer says

WineHorror1 says
30 ADUs at $5,000/month. 50 people/ADU paying $300/month. The math is $150,000/month for ADU rent with $450,000/month coming in to the LLC/Subletter. LLC income per month = $300,000.

Are you talking about 30 ADU on a single property, or 30 ADUs on 30 separate properties?

30 ADUs across the country.
43   Tenpoundbass   2022 Apr 30, 4:00pm  

In Florida you can't just tell anyone that is getting their mail at your address to leave. And if you press the issue, the cops will show up and tell you it is You that have to find somewhere else to sleep tonight.

This is the shittiest idea out of the history of hairbrained schemes. Could you imagine the amount of over comers that would take you up on your $300 a month address in San Francisco offer? You'll have 30 people camping out in your yard protected by the Police as protected species, they'll turn it into a CHAZ zone. Taking a shit on the hood of your car, and pissing on your begonias and liriope.

The City Social workers will love it, because now the bums they help will have an address to have checks mailed to, and addresses to put on forms for other Social Service dollars. The social workers are social service brokers working for their cut.
44   Ceffer   2022 Apr 30, 5:04pm  

I've tried as hard as I can and I just can't grasp this idea.
45   justme   2022 Apr 30, 5:06pm  

My god , the original post was spectacularly badly written. It didn't explain how the customers/renters would benefit from the scheme.

Finally, the point came out: Swindle your employer by pretending to live in Palo Alto, and getting paid Palo Alto salary, while living out of state. That should have been the first sentence.
46   GNL   2022 Apr 30, 5:16pm  

Tenpoundbass says
In Florida you can't just tell anyone that is getting their mail at your address to leave. And if you press the issue, the cops will show up and tell you it is You that have to find somewhere else to sleep tonight.

This is why communication is so important. Not sure why you and the poster had to mix it up like you did. Anyway, maybe this is the straw that breaks the idea's back? UNLESS you can legally determine who gets to be one of the "renters". You'd have to have some legal way of enforcing no living on the premises.
47   AmericanKulak   2022 Apr 30, 6:10pm  

Tenpoundbass says
The City Social workers will love it, because now the bums they help will have an address to have checks mailed to, and addresses to put on forms for other Social Service dollars. The social workers are social service brokers working for their cut.




Licensed Socialist Workers.
48   Misc   2022 May 1, 4:43am  

The only difficulty I see is if the employer found out about the scam.

The person initiating this would need to tell their employer they were living in the high-cost city in California to get the higher pay.

As the property owner would be in on the scam, they could be liable for fraud, conspiracy to commit fraud, and since most paychecks are electronic, conspiracy to commit wire fraud. Since the number of charges brought against the property owner would depend on the number of renters, it could be a lengthy prison sentence as well as restitution to the aggrieved employers.

I would not recommend this.
49   Tenpoundbass   2022 May 1, 5:38am  

WineHorror1 says
Not sure why you and the poster had to mix it up like you did.


I didn't mix it up Oscar the Grouch did. All I did was gave honest input, and tried to decipher his poorly written proposal that didn't include any use care, or who the customer owner would be. He never said to what end his scheme would benefit. But he did preface that he would razz anyone that made comments that didn't meet his expectations. I think that's what he was looking for in the first place.
He's sorta like those idiots that like to argue over Maple vs Rosewood guitar fretboards.
50   Tenpoundbass   2022 May 1, 5:44am  

HunterTits says
Tenpoundbass says

so you want to rent your backyard shed to meth heads, and you want to know if that would be cool?
Then you go on to say those meth heads could sublet to all of their street buddies.
How could you possibly lose?


So now you are going from a shed wired up for 'remote access' wtf that means to this shit. Nice.


One of us, understands the clientele in San Francisco that this would attract more than the other one does.
Anyone that needs to rent my mailbox to defraud employers in San Francisco, would end up a drug addled street shitter within a year. Those idiots weren't born on the streets you know?
51   Tenpoundbass   2022 May 1, 5:46am  

I actually understand what you're trying to do better than you do. You just don't want to hear why it would fail. Why didn't you just write your post and implore everyone to kiss your ass... "Clap Please!" sorta of your Jeb Bush moment, isn't it?
52   Tenpoundbass   2022 May 1, 5:49am  

HunterTits says
No. Because nobody will actually be living there, except maybe one sublet tenant at a time. Just like with AirBnB'd units.



Nope no problem here, got 30 people on a lease, and I'm just going to leave it up to them to decide which one at a time wants to live in my back yard garden shed.
What happens when one of them gets fired from their job, but then they remember they are on your backyard lease, and your town has an eviction moratorium in effect at the time?
Things could get quite shitty, LITERALLY!
53   clambo   2022 May 1, 6:44am  

Off the subject, an anecdote herewith:
My friend in Santa Cruz bought one of those tool sheds and put it on a wooden platform in his back yard.
He ran an extension cord to it, and a surfer dude rented it from him and he lived in it.
A girl wanted to rent his garage which was full of gasoline fumes from his lawnmower and weed whacker.
54   WookieMan   2022 May 1, 7:32am  

HunterTits says
Why? Why would the IRS give a flying shit? Local zoning and residency limits enforcement is not their beef. They only care that they get what is taxable from all that and that it isn't money laundering.

I like the idea, like I said. And I get it's a local zoning issue and you'd be paying the taxes, so why would the IRS care. But I think you kind of just brought up the issue though. Money laundering.

I know people do the same with office spaces and I know that's not what you're referring to. Renting out rooms with a desk to hundreds of people potentially and schedule your time to get the room(s). It's the residency that you're looking to fix. If the LLC is tied to a property, which for liability it should be, at least from my understanding. Doesn't it kind of look like money laundering on paper when filing taxes? Money laundering is beyond me, I know what it is and never really looked into because I don't need to.

If a "rental" so to speak is generating 5x's or more than neighboring landlords filing taxes, I'd have to image the IRS has some algorithm and might report it as weird activity to some three letter law enforcement agency. And I get you'd be doing this all above board and paying all taxes, but I'd account for attorney fees at some point because it does seem like a good way to launder money and it's possible you might need to defend yourself at some point.

The other avenue to market to would be cops and firefighters that have to live in the city they were hired in. Chicago for example, cops, FF and teachers all have to live in Chicago city limits. Don't know if it's the same out in CA for certain cities. I know two Chicago cops that would do the ADU thing and actually move to a more expensive suburban area with a real house and yard and keep their CPD job for the money. You'd have to be careful not to have too many government employees "living" in an ADU or they might sue you. So maybe not worth, though it was their decision to lie.

Also, wouldn't drivers license be an issue? I know most DMV employees are dolts, but wouldn't at some point they notice 50 people living at the same property with the same apartment/unit number? Some cops are vigilantes as well. If you park a CA plate for a year or 2 in say Idaho, they may fuck with you. I'm paranoid about liability and getting in trouble to be honest, so I overthink shit like this.

Again, love the idea, just thinking of holes to poke in it in a positive way. Liability wise for the owner it seems low to none besides local officials finding out, but it just looks like an Airbnb which would be used rarely. The liability is all on the person "living" in the ADU it seems.

Shit, school districts... that's another avenue. That one is more risky for the parent though. There was a parent in my high school that lived out of district and got caught sending his kids. He paid $8k in property taxes with pennies... lol. The penalties here in IL are insane if caught living out of district. Our district pulled a huge move and labeled my nephew as homeless.... lol. It's not based on property value here. It would have been something like $15k/yr to get him into our average district as a non-resident. Not joking. IL sucks though. For now.....

Sorry for the novels, just thinking (hopefully) and typing. Hopefully not too many errors.
55   GNL   2022 May 1, 7:44am  

You need a tax attorney to flush out any concerns your clients would have. I'm not so sure fraud could stick if you aren't the one lying or breaking any laws.
56   just_passing_through   2022 May 1, 7:49am  

HunterTits says
TOk, tell me how this doesn't work.


I just think that going forward any investment in CA real estate is a bad idea. Not that other places aren't going to embrace the suck, but CA has a way of leading the pack. Tampa just voted unanimously for rent control.

I think staying out of city limits might be a good strategy (in red states) but would periodically require selling and purchasing further out.
57   GNL   2022 May 1, 8:38am  

I can see rent control becoming a real thing all over if the only alternative is massive homelessness.
58   RWSGFY   2022 May 1, 8:53am  

HunterTits says

RWSGFY says

Aren't there laws regulating how many people can legally live in a unit of a certain size?

Sure, slumlords violate them all the time, but if we are talking "strictly above the board" model this would be one of the obstacles.


How so? Not enforced proactively. Only if neighbors complain/report. Which they won't because at most would be one person/couple showing up at a time, much like if it were AirBnB'd.

Even the authorities in SF don't care when units are converted to de facto dorms.

And in this case, all that exists on paper at the landlord end is the lease between him and the out of state LLC/Corp that is subletting out.


"Strictly above board" and "not enforced proactively" are two different things.
59   just_passing_through   2022 May 1, 9:26am  

WineHorror1 says
I can see rent control becoming a real thing all over if the only alternative is massive homelessness.


Which will only serve to make the problems worse.
60   HeadSet   2022 May 1, 9:48am  

RWSGFY says

Aren't there laws regulating how many people can legally live in a unit of a certain size?

In Prince William County, VA (DC suburb) a judge struck down such a law when it was applied to 14 non-related folks renting a 3-bedroom townhouse. Law was racist against illegals, you know.
61   GNL   2022 May 1, 9:57am  

You all have no answers? If you think voters are going to stand for mass homelessness, you're smoking crack. If it gets worse, you should expect anything to happen.
62   Rin   2022 May 1, 10:06am  

Misc says

As the property owner would be in on the scam, they could be liable for fraud, conspiracy to commit fraud, and since most paychecks are electronic, conspiracy to commit wire fraud. Since the number of charges brought against the property owner would depend on the number of renters, it could be a lengthy prison sentence as well as restitution to the aggrieved employers.


So wouldn't all those mailstop businesses, like Mailboxes etc, the UPS store, etc, also be a part of scam where a person has a residence but it's really just a mail stop with a suite no?

I mean when I was a globe trekker, I used a mailstop just outside of Boston & I paid the owner, to get my mail forwarded to various hotels around the continent. Otherwise, I'd have an overflowing mailbox at home which would pretty much tip off any burglar, that the resident was 'on the road' and not at home.
63   RWSGFY   2022 May 1, 10:08am  

HeadSet says

RWSGFY says

Aren't there laws regulating how many people can legally live in a unit of a certain size?

In Prince William County, VA (DC suburb) a judge struck down such a law when it was applied to 14 non-related folks renting a 3-bedroom townhouse. Law was racist against illegals, you know.


So it might meet the same fate in CA.
64   just_passing_through   2022 May 1, 10:22am  

Rin says
I used a mailstop just outside of Boston & I paid the owner, to get my mail forwarded to various hotels around the continent.


I'm curious how that worked out with junk mail. Do you even get that crap at a mailstop and if so did they forward it?
65   GNL   2022 May 1, 11:05am  

HunterTits says

Misc says
The only difficulty I see is if the employer found out about the scam.


That's right. Nor would it be fraud. And even if so, the landlord would not be on the hook.

If a court found fraud, just who would be considered the perp?
66   just_passing_through   2022 May 1, 11:07am  

HunterTits says
So what?


Asphinctersayswhat?
67   Misc   2022 May 1, 1:22pm  

Rin says

Misc says

As the property owner would be in on the scam, they could be liable for fraud, conspiracy to commit fraud, and since most paychecks are electronic, conspiracy to commit wire fraud. Since the number of charges brought against the property owner would depend on the number of renters, it could be a lengthy prison sentence as well as restitution to the aggrieved employers.


So wouldn't all those mailstop businesses, like Mailboxes etc, the UPS store, etc, also be a part of scam where a person has a residence but it's really just a mail stop with a suite no?

I mean when I was a globe trekker, I used a mailstop just outside of Boston & I paid the owner, to get my mail forwarded to various hotels around the continent. Otherwise, I'd have an overflowing mailbox at home which would pretty much tip off any burglar, that the resident was 'on the road' and not at home.


You were not lying to someone for financial gain.

In the case presented the employee is making false and misleading statements to his employer for a financial gain --- hence fraud.

Since the landlord would be in on the scam (if not actively recruiting for it), there would be conspiracy to commit fraud.
68   Rin   2022 May 1, 1:45pm  

Misc says

You were not lying to someone for financial gain.


Here's the thing ... what prevents someone from starting his own mailstop business at home, an LLC with general liability insurance, but then add an AirBnB add-on as a benefit to being a customer? In other words, a B&B timesharer where one gets one's mail. Since the average person won't pay the extra price if he's just looking for a UPS mailstop, this may be a feasible way to attract the right customer.

Realize, not all businesses have to be in the town center next to the library or market deli.

Now, is it fraud that some Indiana person wants to spend a week in California & get his mail there? Hell, even I might go for it if seeing hoes were legal in California.

FJB says


I'm curious how that worked out with junk mail. Do you even get that crap at a mailstop and if so did they forward it?


He put everything in a pouch and sent it. I simply paid for the bag and postage as extras.

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