I have a tenant who rented from me about a year ago. This guy has been a model tenant, always pays rent on time, no reported problems, low maintenance.
When I rented to him he made statements to me like, "I need to get back on my feet… I’ve been living in long term hotels… ", etc. I got the feeling that this guy had been through some very hard times in the past.
As usual, we ran criminal history - nothing showed. We ran credit - it was pretty much empty - no negatives. We ran eviction history - nothing. So it looked really good. As a precaution we collected last month’s rent up front as we normal do.
It looks like, and I can’t be absolutely sure of this, that somehow this guy ‘reinvented himself’ with a new social security no. I checked his drivers license, etc. when he applied for the rental so there is nothing here that would suggest any fraud, but is it possible for someone to just get a new social security no like that?
I’ve never heard of something like that before but then again my father and another man were issued the same social and they didn’t realized that until the early 80’s -scary isn’t it?
It may be weird, nostalgic or whatever, there are people around with little history.
My dad is one. He never got a drivers license, and only got a DMV ID a few years back because of the need for ID’s. He got one credit card prior to that, because he needed that for ID prior. He does NOT use the credit card at anytime to charge anything. He did buy a property assuming a mortgage. But I know some elderly neighbors of his living like him, renting all their lives without a car (in NYC). What type of any history would they have??
Then, I hired a mechanic that slept in cars between jobs. He dosen’t rent a place then skip out on the rent, nor use credit cards where he skips out on.
Bob Dole, who ran for president and his wife is now a senator was investigated by the IRS. He does not use credit cards, but walks into his bank to cash a $5,000 checks to have walking around money. He won’t show too much of a credit card history either.
We’re so use to the other 90% of the population that lives on credit cards, then use it as a lifeline when something comes up, then not pay. and consider that the norm.
This guy, my dad, Bob Dole, is more the norm 30 years ago.
BUT we did uncover an applicant, using a “credit repair service” to clean up their credit history to the extent no “negatives showed”. It was only by the way they answered the phone that we figured something wasn’t right. We pressed and pressed, and they finally said a “credit repair” service got creditors to recast the debt, bring them currrent, and somehow got rid of the bad history too!! How they did it, we couldn’t figure out, but they were buried under debt till the repair service fixed it, and you can’t tell from the credit report they were any probllems at all.
Based on my feelings about this tenant you got, he’ either
A criminal from somewhere starting over with a false identity.
Someone living within his means not using credit.
I don’t think he used a repair servive doing a cleanup.
I think you are right. I would expect some remnants of the past to appear on his credit report if that was the case. If it was based on someone living within his means, I’d still have expected to see inquiries show up. But nothing. I’m suspicious of the false identity part. But if he fooled me, he also fooled the DMV. We did a background check and called his employer, etc. and it came up fine.
I guess I don’t really care because he’s been my best tenant to date. But when someone pays their rent routinely ahead of time, I get suspicious that they are trying to hide something. But then its not affecting me, so I guess I really shouldn’t care…
Just poking my nose around and saw this article; being that I used to work as a credit counselor, I can tell you it is possible for a credit repair agency to get that done. In fact, the people themselves can do it easily:
By sending a letter to each Credit Reporting agency to clarify each debt listed. The agency then contacts each creditor to request proof of the debt, and if there is no response withing 30 days it gets removed. It can be relisted, if the creditor wakes up and does so. But if they don’t, it could be months or years(though unlikely, most collection agencys will sell the debt and a new agency will relist it on a credit report). Of course this is not the norm, but still very possible.
If the debt is resold, it is very possible for the debtor to make an arrangment…although bringing it current is impossible by the time it gets to this stage. More likely, the original creditor was wiped off with the above referenced inquiry to the C/R; combine that with an agency possibly reporting the debt to a different C/R and that would have the effect of it ‘disappearing’.
Inquiries only happen if some one actively applies credit. This is known as a “Hard Pull”. A soft pull anyone can do, and that would not show on the credit report, as every consumer has the right to check their credit report. (I stopped doing this work as of Oct 31, 2006, so if anyone has objections to 3, let me know and I’ll address them accordingly)
This is why its so important to have all 3 credit reports checked, whether you are a buyer, seller or debtor.
There’s always the possility of “identity theft” and cleaned-up credit reports.
We do a brief phone interview, where we mark down the responses, plus another during the showing. We caught a few liars this way.
It was a lie as simple as telling us over the phone, that she has a one and only daugther, who’s a doctor, to come visit her, and telling me at the showing the same thing except it’s “a son”. At that time, we did not pull eviction reports, but did so in her case, and found one on file. She checked off “no evcitions” on the application. Why she has to lie on a little thing like this, we can’t figure out.
We go through the applications with the tenants,paying particular attention to "where they were the last 5 to 6 years. Often, liars with bad credit put down one address for the entire time.
We caught this couple lying since they have a lot more locations on the “credit report” compared to the ONE on the application. We called up and asked about the different addresses. That’s when they blurted out “they were supposed to have clean everything up”.
We asked “what wasn’t supposed to be there”, and they were dumb enough to tell us. Just looking at reports, that showed no negatives probably won’t tell use much.
It’s the consistency between the phone interviews, appplications, and credit reports, that a clear picture emerges. It’s not just ONE thing.
Well the one thing you can count on is that ALL tenants lie on Rental Applications. If you start with that pretense, then it makes the process of reviewing rental applications a lot easier.
As I deal with higher end areas, the percentage of liars appear lower.
One trick I used is to ask tenants to fill out the application in my presence, telling them that I give preference to those doing it this way, and the place may be gone tommorrow.
By doing this, there’a a question on the application asking for “your savings account number”. It’ irrelevant since banks won’t release info on it anyway, but a good percentage of tenants concientiously fill everyting out, including answering this question. They either ask if they can go home, get the numebr, come back with the info, or there is a phone number they can call back later that evening.
The account number is not important, and most floks don’t carry passbooks around, but it’s the way they handle that question that’s key.
Based on my experience, tenants who go this extra step rarely lied, or gave me problems afterwards, and suprisingly, a good indicator of “past experience”, as well as “future performance”.
People just filling out their name and current address, leave everything else off, just signs it, are usually liars or at best, but also make negligient tenants.
I have to manage many, many properties and at the end of the day I answer to one person for all of this (other than the bank) - the judge in the courthouse. By law, I am not allowed to discriminate within the boundary of the law. When it comes to financial discrimination, I can spend all the time in the world reviewing credit, criminal history, eviction history, etc. but while I’m doing that, I’m not collecting rents. So there is a fine line between being a ‘fistidious landlord’ (sp?) and being anal retentive in my market.
Despite the level of detail on a form, my experience is that I don’ t have one rental application that doesn’t contain a lie on it. The challenge to me is whether its worth investing time to find them or not. I look simply at the profit I make from renting, and collect my downside risk (last month’s rent) up front. To date, I am not out of pocket $0.01 in vacancy costs this year, and with my late payment income I’m in front. And I have 100% occupancy right now. Of course that won’t last, but I’ll enjoy it while it does.
Will my tenants stay in my places for 3 years? No. They won’t. Its unrealistic to expect that. I have had some that did, but its rare. But if I have the last month’s rent collected, my only exposure is property damage. And since I’m renting units and not houses, there isn’t that much for them to damage that can’t be inexpensively fixed. So if I’m collecting good profits in late payments, and I have good occupancy rates, I say bring the risk on. Within reason.
As long as I make a solid profit with my tenants, have systems in place to make it stress free, and have a good maintenance crew that can take care of issues as they arise, I’m making money. And that’s what being in business is about. If the properties rise in value - great. But I’m in this for the month to month cashflow.
Its a quick, lean and mean marketplace. I market aggresively and I have one thing up my sleeve…
In the state of Arizona, if one item on a rental application can be shown to be a lie, its a material breach of a rental lease and you can turf them out of your place quicker than if they don’t pay rent. So if I catch them out in a lie, I just document it and keep it to myself. Then if they become a burden, I pull the ‘lie card’ out of the deck, go to the court house, pay $36 to file a case and they are gone.
Nice and simple. I love renting in AZ for that reason. In the meantime, I get an extra $150 a month for late payers on top of the rental profit. That’s a nice little vacation for my family pre-paid by my tenants at the end of the year.
I don’t rent (I rehab) but I think “V” makes very good business sense. There are only a few “Perfect Tenants” to choose from - if you hold out for only those few you’ll suffer in the long run with a high vacancy rate. I really like the “lie card” angle to get em out quicker if things do go bad.
As far as the remade identity thing goes, I’ve heard anyone can go to the IRS and get a new Taxpayer ID number under their own name and start a whole new credit history based on it (you can only do it once though). There are internet credit repair companies that offer to do this for you for big bucks. The problem is like “V” said though - “it looks like this guy reinvented himself.” There is only limited history available (of course, if they’re really clever, they can also buy aged credit accounts now days too). Since a person can only do the new Tax ID thing once in their life, I would think that the guy won’t risk the second chance he’s gotten by not paying his bills on time (which seems to be the case). Some people are truely brain dead though.
BINGO! That looks exactly what has probably happened here. No wonder this guy is so picky about paying his rent on time, etc. He’s been way down and out in the past, and he’s pulled his only ‘get out of jail free’ card, and this is his last hope to rebuild his credit and life again.
Knowing this, I’m in great shape. If only more deadbeat tenants would try this and then pay us landlords the respect we deserve!
Instead of driving myself crazy searching for the perfect tenant, it became a game for me picking “decent” people with the right reason and capacity to stay with me for the duration of a few years.
Each time I select one, I see if I gotten better than the time before, pretty much like the way Tiger Woods plays golf, i.e. how I can improve from the last game.
Years ago, I would’ve gone with an MBA from Columbia, only to find him laid off, moping at home, giving me excuses why he can’t find the next investment banking job to pay his rent.
I decided blue collar guys are a bit more stable, and when push comes to shove, they go to wait tables, take on odd jobs to pay the rent, and put food on the table.
Then I find the right person with good reasons to stay, persevere, but is he OK to get along with, or is he a complainer or whiner??
Yes, I do get credit reports, eviction reports, etc., but I still, at the end of the day, I look at a person, get a gut feel, and that’s one of the hardest things to learn and explain.
And that means if I rent to some guy getting a second chance to prove himself, so be it, that’s a perfect reason for him to pay on time and stay a while.
Yep, you are right. You get better at this with time. I guess a lot of it has to be gut feel.
And now I have discovered today that I am now having to mop up the mess of the previous landlord who rented a 4 plex we just bought to a bunch of tenants that didn’t conform to our requirements. We just heard today from our plumber who was onsite that one of them has decided to move out and do a runner on us over the weekend. I have to file an ‘abandonment case’ in court to get legal access to the property now. All the idiot had to do was contact us and let us know he was leaving, but no… even after a long phone conversation I had with him a week ago, where he agreed to let us know anything regarding his tenancy, he’s just up’d and left. I don’t really understand the mentality here. I’m going to get an extra month’s rent out of him with the help of my collection agents. He could have avoided all of this by just saying, “Hey I’m leaving. keep my security deposit as rent and I’ll let you have access to the place to rent it to someone else”.
But no, another loser slows me down by 13 days while I file paperwork. Oh well… its not like I don’t do that each month on someone. His credit is going to look like sheeet after I finish with this one. And we’ll get at least another $1000 from this guy. The courthouse is definitely the friend of a smart landlord here in AZ. Plus I’ll rent this at another $50 a month more to the next guy.
All we did today was pick up the rent checks, and do our monthly inspections of the ones close to us, and run by the bank. Sounds like you had a much busier day.
Yes, it goes to show that when you purchase a new property and inherit the leases on it, you get a lot of crap to clean up. This is a clear case where the previous owner threw anyone they could find on the street into the property to show that it was rented. Of course I expected to have to evict most just to get them to conform to our requirements, but this one is going by himself so its a bit easier.
At least I can get tenants in there now that conform to our screening process, and shouldn’t be a burden to manage.