Here’s what happened in my most recent transaction. I purchased a home from a sweet elderly lady that was behind on taxes. I paid cash for the home, and she was to be out the following Monday. I went to the house that Monday morning and she wasn’t even close to being out. [b][/b]Not even close!
I decided to give her until that Wednesday while my crew started in the garage and shop areas. Wednesday came and nothing. I told her that rent would be applied starting that day. I then found out that rent was $12.50 PER DAY. That’s crap.
Went back Thursday and same thing, then told her that I would be back Friday at 12 to change the locks. My lawyer advised against that because of “adverse possession” or something like that. I took a step back and realized that I really wouldn’t lose that much to chill for the weekend, let her know that I would be back Monday and she had the weekend. Well, guess what?
We all know what happened next. I went back and she hadn’t done SQUAT. I contacted my lawyer and started the eviction process. Talk about really not having my ducks in a row.
The next time I purchase a home from somebody that still lives in it I will have it in the contract that if they are not out by specified date of possession I will charge them $500 a day. I will ensure I get my $500 a day because I will also make sure that any money due to the seller is held in escrow until I sign off that they are out. If the seller doesn’t want to sign this contract than they can keep the house. I will never be burned like this again.
I hope some of the newbies out there remember this story and [b][/b][i][/i]COVER YOUR BASES!!! Take the time to read the contract and don’t trust anybody to cover your back, because IT IS YOUR BACK!
Jared :banghead:
Believe me - I FEEL FOR YOU! This is a frequent event for all the landlords out there. The lessons that I have learned are to:
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Make the rent due on the 1st and late after the 4th (with a hefty late fee).
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Post the 3 day notice (to evict) on the morning of the 5th.
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Take the eviction all the way to conclusion EVEN IF THEY MOVE OUT - so it’s on their record.
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TAKE NO EXCUSES - assume that they are lying and you’ll be correct 99.9% of the time!
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Don’t let someone else’s problem become your problem.
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NEVER ACCEPT PARTIAL RENT!!! (It will screw up the eviction)
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Let other investors know about the deadbeats.
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Be sure to keep section 8 advised - so that the dirtbags will lose their section 8!
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Never rent to someone who has been previously evicted. The best learning experience for them is to live IN THE GUTTER WHERE THEY BELONG!
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Screen your tenants!
REMEMBER THE #1 RULE OF BEING A LANDLORD: "NO GOOD DEED GOES UNPUNISHED!
Good Luck,
Mike
Jared,
When is she/you going to court to get her out and how long will it take? Here in Maryland I think tenants have 3 times to actually pay up when rent is due - like that day, in court if they want to - and on the 4th time then you can truly evict.
So that’s like 4 months!! I hope this doesn’t happen to you!
Immy
Hey Christina…
The eviction will take 4-6 weeks if it goes all the way through. Here is the thing… she is not a tenant. I bought the property from her so there is no landlord/tenant relationship. I talked to my attorney and he assures me that there is no other (legal) way to do this besides eviction.
Thing is, when I told her that I was starting the eviction process she said that she will be out by this weekend. Of course she has lied before, but there is still the possibility of her being out. Her intention is to move on and that is clear, but she is just slower than I work. I seriously doubt the eviction goes all the way through, but I had to do something to let her know I am serious.
Hey Mike… thanks for your comments. Your attitude towards tenants was disturbing to me. I’m not saying right or wrong, just disturbing. I understand business is business, and I have no problem taking action against anybody professionaly, but aren’t they still people? I really don’t believe anybody deserves to “live in the gutter”. I wonder where else this shows up for you? Just a thought.
Only one website and SO MANY EGOS. Thank you for your input though.
BlueStar,
I guess that’s a difference between you and me. I do not believe that people deserve or are entitled to anything just by being born. As you probably know, there is an increasing chasm in this country between the rich and poor. I believe that is precisely because so many people feel that they are entitled to society taking care of them, even if they are just too lazy to work. I think that this is nonsense! With the exception of the truly sick, disabled, or mentally ill, I think that people should be totally and completely responsible for their own actions. If people are too lazy to work, or want to spend all their money on drugs, then I believe that they should have that right. However, I should NOT have to pay for their actions and if they don’t have a place to live or food to eat - then they’ve made their choice!!!
Obviously, we aren’t going to agree on this issue. If you ever have a bunch of tenants, you might very well change your mind! In fact, you might start to change your mind if that squatter of yours stays for another month or two. I know it’s been an eye-opener for me!
Mike
Mike…
I understand what you are saying. I believe we all are responsible for where we are in life. People make choices and then have to live with them. I just don’t judge. I have been in the property management business for 5 years and have seen it all so I get where you are coming from. I don’t wish anybody any harm which is what I was getting from you.
No problem, no anger, and definitely not trying to get into a pissing contest!!! Thanks for taking the time and sharing your thoughts with me and others on this board. I respect your opinion and we don’t need to agree about anything because it doesn’t even matter. Have a good day.
Jared 
Hey, Mike,
That did sound a little harsh coming from you. You are so compassionate and helpful to us REI’s. It was quite a change in tone.
What I at least did get from your post is this is a business, not a personal realtionship and that lady in Jared’s house is ‘stealing from the company’ so deal with her accordingly.
I tend to lean towards the comapassionate side. I have not been burned by any tenant yet. From what I have learned here on the boards it is doubtful I will escape a bad tenant in the future.
Jeff
Jeff,
I’m afraid that there isn’t a compassionate bone left in my body (at least toward the tenants). In just the past few months, since I’ve had the low income apartments, I’ve been lied to so many times that what little trust I had in tenants (and potential tenants) is gone. I am still learning the low-income rental business which is completely different than the SFH rental business. The tenants and applicants are completely different (and not for the better). I’ve been networking with more experienced investors at our local REIA and have gained the knowledge that I need. I’m still having trouble with scumbags lying and trying to cheat me on such a regular basis. I will get the hang of it, but I’m not there yet! As you might have guessed, I still get a little annoyed with the nonsense. I think that it will just take a little time to get desensitized.
The key is to have a VERY tight lease and follow it to the letter.
Mike
There is an article on the web about detecting deceit in facial expressions and verbal and non verbal behavior.
It’s not a guarantee that it will help anything but if you are watchful it can trun you into a human lie detector. REALLY! Police use the techniques as well as other enforcement type people. Now I use it and the lies become obvious.
I would like to see your tight lease. I am still experimenting with leases and am not happy at all with what I have been using. Some are too, too complex, some are too vague.
I have had a tenant for 6 months. Month 1 & 2. OK, then she started paying later and later.
Month 3, paycheck got lost in mail.
Month 4, paycheck got stolen.
Month 5, gave her sister rent money to get to me. Sister spent money.
So, month 5 I told her there were some really nice apartments down the street that were a little less money. If she was in over her head in my unit, I would drive her down there to see them and even give her a good landlord reference and help her move.
Month 6 - Rent in hand October 1st.
Jeff
Jeff,
I would be VERY careful about accepting late rent or partial rent. When you do so, you are creating a precedent which WILL be used in court against you (ask me how I know ???). I also would not accept ANY excuses. I don’t care whether their money was stolen (one of my favorite lies), their car broke down (another favorite), or their dog ate the rent! If they don’t pay IN FULL by 5pm on the 4th, I post the 3 day notice on their door. If they’re not out and haven’t paid the rent in full including late fees, three days later we file the eviction and follow it through to conclusion even if they move out! I want it on their record so that the next landlord will see it.
Speaking of which, I would not pawn off one of my bad tenants on another investor by giving the tenant a good reference. You don’t want the other landlords to treat you like that - do you?
I’ve heard so many of these lies that I am a human lie detector even on the phone and without the police training. My favorite phone lie from tenant applicants is about pets:
Applicant: “Do you accept pets?”
Me: “What kind of pet do you have?”
Applicant: “A pretty small dog”
Me: “What kind of dog”
Applicant: “It’s a mix - not a pure breed”
(I already know they’re lying - IT’S A PIT BULL!)
Me: “A mix of what”
Applicant: “It’s kind of a medium size brown dow with a square head”
Me: “Do you mean Pit Bull?”
Applicant: "Well, it’s not pure bred, it’s a mix, it’s not a vicious dog:
Me: “Does it look like a Pit Bull? I’ll have to look at the dog before you move in and you’ll lose your non-refundable application fee if it’s a Pit Bull”
Applicant: “Why won’t anybody take my Pit Bull?”
Me: “Thanks for Calling”
Have a good day!
Mike
Connecticut has grace of 10 days before any legal action can be taken against a tenant for non-payment of rent.
So 5 days after that is when I would post the notice to quit but I haven’t had to yet … ever…for anyone.
Of course every renter in the state interprets that to mean “It’s legal to pay the rent 10 days late”. I have to re-eduacate them on that. Now I do it right at lease signing.
My tenant is a sweetheart with an immaculate home. She is a hard working single mom who works two jobs and can’t look me in the eye and say she paid for the big screen TV rental before she paid me.
My offer to bring her to the other apartment was just a tactic. I still got security deposit and extra months rent on her. The message was get your family or someone else to be your creditors, I am getting tired of it.
I guess I need to get burned to get my education in this department.
Jeff
Property management
I understand you point, but if you feel that way will not be better for you to work with another kind of tenants?.. Perhaps leave the headaches to managing company. I don’t take sides here is just giving my opinion.
It is hard for me since I been DOWN very DOWN before… yes because my choices in life but never the less is hard when you down to get help. Have you ever put all your time effort and money in one idea that when wrong very wrong and find your self in the street? Can you picture your self in that situation? I sure can. That’s why I am not to the level of tenants yet but I will let my managers deal with that situation when it present it self.
Propertymanager…I like your attitude!
New Beginning,
No, I can’t picture myself in that situation. I don’t do drugs; I am not a drunk; I am not a criminal; and most importantly - I am not lazy. The problems that I see with bad tenants are almost completely caused by one of these four things.
Bad things do happen to good people. I have given many people a “second chance” by renting them an apartment WHEN I think that there is evidence that they are making a REAL effort to improve their lives (and when they have a BIG deposit). I have a couple of convicted felons in my low income apartments that are recently out of prison. They both have gotten GOOD jobs and are on probation (which gives me leverage). However, if they don’t pay the rent on time, I’ll not only evict them promptly but call their probation officer and help them find more suitable housing!
I am in the rental BUSINESS! I am not a non-profit charity. The entire purpose of my BUSINESS is to generate a profit. There isn’t even a single sentence in my business plan about providing free housing to the lazy.
I’m not sure what your point is about hiring a property manager to manage the property. It doesn’t matter who manages it - if the manager takes excuses, then the owner loses money! I enjoy managing the property, it is definitely a challenge.
This is a business, but I do take it personally when someone attempts to steal from me by not paying rent. I do everything I can to be sure that they pay a price. I evict promptly; carry the eviction all the way through; garnish their wages; tell other landlords; call them at work; try to get their section 8 terminated, etc. In my opinion, having some scumbag tenant steal from me isn’t much different than a man with a gun robbing me on the street. It’s still stealing!
If you can’t promptly evict people who don’t pay, you won’t make it in the rental business.
Mike
I agree with PM, tenants don’t turn bad in your unit. They were bad all along. What happens is landlords get greedy and can’t pass up a guy standing in front of them with a $1000 check. They let him in and that is the last money they see from him, or he tears up the place.
When I was a young renter, I used that strategy on a landlord I had once. I started to write the deposit and first month’s rent check at the table across from the prespective landlord and just stopped writting, I stood up and said I just can’t do it. I can’t take this property without having my cat, or paying an extra deposit for one. He looked at me and my check and said ok just sign the pet agreement and no deposit is required.
That was a lazy landlord. I didn’t tear up the place and left it in better shape than when I moved in, but I could have just as easily been a bad tenant and trashed the place.
I have been up, I have been down. I remember at one point I was two months behind on my rent and it was because of my poor financial decisions at that time. Of course I was younger and my priorities were screwed up, but it had nothing to do with drugs, alcohol, or anything like that. I was able to work off my debt and that was the last time I ever got behind.
We had a resident in one of our rental homes that lived there for 15 years, was late only a few times, and then all of a sudden decided to stop paying rent. Didn’t take long to evict him, but then he tried to sue us for some crap about the steps being broken and he hurt his back (didn’t follow through). So this resident was great for so long, and then turned to crap.
WHY CANT WE ALL JUST GET ALONG??? Just kidding. Have a great day!!!
Jared
Family of four walks in to our office with no money, no credit, and no chance. Had a feeling about them and our manager slid them into an apartment that needed painted and cleaned with the agreement that they would do those things as part of their rent, and that he would have a job by the end of the month (2 weeks later I believe). Moved in, painted the place and haven’t missed a payment or been late at all.
Your business reputation is word of mouth. Good or bad, that is the biggest marketing tool out there. My business will have the reputation of going above and beyond as far as quality, and that we treat people with respect, even if we are evicting them. This is business yes, but even if you have “scumbags” hating you, those scumbags do associate with non scumbags, or good renters, and can have a huge affect that could come back and bite you in the arse.
[b][/b]
Blue You are so right. If you look at statistics there is no human taller than 6’5”. Although there are good people with bad backgrounds, and people that have good backgrounds that go bad and people taller than 6’5”, I am not going to design by business around an aberration. Just like I am not going to make the kitchen counters in my houses 50" tall for the peron that may be 7’ tall, I am not going to rent to a person that has been evicted. Remember as Forrest Gump said, stupid is as stupid does. I paraphrase it by saying bad renter is as bad renter does. Everybody is a good person, they just act badly and it becomes a pattern.
Here’s my favorite.
I was a new investor at the time. I cringe to think of it.
This couple with two dogs lived in their car for 8 months. They parked in a relative’s driveway and were able to use their bathroom facility. He was bipolar, she was disabled. Minimal state aid. Very small SSI check. Plus an eviction from their last apartment for non-payment. (Repair issues)
These people were so nice and so pathetically poor and so downtrodden and down on their luck. I actually thought if they moved in and never paid rent, I would somehow manage to keep my expenses paid… just to give them a break.
No one in the state would rent them an apartment.
When she gave me the application she knew she was not a good candidate. She documented their entire life down to credit cards statements, bank statements and even the dogs’ shots and licenses.
I checked them out nine ways to Sunday… even the eviction. I did a cash analysis to see if they could afford to eat after the rent and utilities were paid.
Well, I let them in and they have never, ever been late on the rent. Maintenance issues are minor and dog poop is cleaned up immediately after it hits the ground.
I don’t know if I would do that again, but I 'm better for the experience.
Jeff
Awww, some of you people have a soft spot! My husband and I had problems with chemical dependencies. We had a chapter 7 Bankrupcy on our record in 1991 when we applied for a very nice rental home in a great area we wanted to relocate in. The owner of the rental was a Century 21 Broker, and she instantly liked us. At the time of our application, we were managing a 4-plex in another area, a BAD area! We would be going form $400/mo rent to $1000/mo. Yikes! That was in 1991. She trusted us, she went with her gut, and we were good tenants. She even let us get a dog 3 months after we moved in. Two years later we bought a house, and now have gobs of equity. Fortunately, we had a landlord who went with her gut, and we got a shot to make a drastic change for the better in our lives! She was in the business of making money, yet I know she got satisfaction too, in seeing a family of 5 finally get a break and not rip her off, she told me when I gave her notice when we were buying our house. Tenants, for the most part, are going to have some problems of SOME kind, or they would be homeowners, right?! (BTW, my hubby and I have 22 years of recovery between us now) 
One of my tenants called at the end of last month. He said that his mother was having a bad time and needed some financial help. He said that he wanted to loan her the money and that she only needed it until the 15th. Would it be alright if he paid the rent on the 15th instead of the 4th? Of course, being the softie that I am - I said NO! To tell the truth, I wasn’t really that blunt. I told him that his lease said that the rent was due on the 1st, late after 5 pm on the 4th, and that we would start eviction on the 10th. It was fine if he wanted to pay on the 15th, but he would owe the rent plus the $50 late fee, plus the $125 eviction filing fee + attorney fees. He decided to pay on time. When I went to pick up the rent, he had a brand new hugh screen (bigger than big screen) TV and had just bought another car!!!
If you want to run your rental business based on emotion, charity, and sympathy for others - have at it! I don’t believe that you can survive in this business long term with a business model like that, but you’re free to try. Personally, I’m trying to screen out the people who have a history of being druggies, drunks, criminals, and everyone who has been previously evicted. I do not believe that everyone is good (sounds like politically correct nonsense to me). I’ve met too many that are bad to the bone!
Mike