Real Estate Investor · Lakeville, MN · Member since 2008 · 153 posts · 17 votes
I just closed on a short-saled triplex, that is full of tenants. Sounds good at first. However, at the closing, the previous owner said that there is one tenant that only paid half the rent for January and has not paid the February rent. Another tenant is section 8 but is not paying her portion of the section 8. Then there is a tenant down in a makeshift illegal basement unit (4th unit) that is paying on time, but I cannot continue letting him live down there if I am going to get a rental license from the city.
I am meeting with the non-section 8 tenant who is not paying their rent, and the illegal basement dweller today, and was looking for tips on how to gently explain they need to go - and soon. They did not put down security deposits (why do you think I got such a great deal on the short sale:)) and I want to convince them it is in their best interest to just leave. I will tell them they don't owe me a thing if they can be out very soon, but would be interested in any other tips and techniques that have worked for people in the past?
I also meet with the Section 8 person this weekend. Should I tell her I will be calling the Section 8 office? I've never rented to section 8 and don't intend to once this tenant is out. Thanks.
Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
14y
I'd begin the eviction process ASAP on the 2 who are in default on the agreements. At the same time, talk to them about what you are doing and how they can cure (if possible). I'd be cordial, but firm. You and they will abide by the terms of the agreement or they are out.
On the non-permitted unit, can you move that tenant to a unit that will be freed up by one of the two in default? Are you going to get the basement unit legalized, or did you really buy a duplex?
Real Estate Investor · Lakeville, MN · Member since 2008 · 153 posts · 17 votes
14y
Jon - Thanks for responding so quickly. Sounds like good advice on the non-paying tenants. Can I tell the Section 8 tenant that she could lose her voucher if I call the Section 8 office? I'd rather not go through the whole eviction procedure but if that is what it takes...
As for the non-permitted unit, I can ask the guy. He is paying rent now. I would however, like to fix up the other units before I move anyone in. As for the triplex/duplex question, right now there are 4 units being rented it, so it would go from a quad to a try. I will remove a wall and the illegal unit will become a finished basement for one of the other units.
Rental Property Investor · North Huntingdon, PA · Member since 2011 · 64 posts · 20 votes
14y
Congrats on the investment Hal. I find that it's much easier dealing with tenants if you act like you are simply a partner who owns the house. Tell the tenants that you are acting on behalf of your partner who is very strict in matters such as late payments. By doing this hopefully they will be more upfront with you. Give them notice that they are in default (if required by your state), and begin the eviction process if they don't pay. Perhaps they were having their way with the previous landlord and hopefully your actions will set them straight. Best of luck.
Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
14y
I don't do Section 8, so I'll let someone else weigh in on that.
I don't blame you for not wanting to go through whole eviction process, nobody does. Most likely you won't have to. I explain to my tenants what I am doing, and that I have to do it because it's what our agreement and the law dictates. I tell them that if they don't leave, they will most likely end up with an eviction and a judgment on their record that will make it very hard to rent in the future. And that landlords see evictions as worse than foreclosures. And if they don't leave, a constable or deputy will show up and you will leave at that time. And your possessions will be placed at the street. No threats, it's just how the process works. They almost always are gone before that, and most of the time, even before the court date.
It's not a bad thing for you to go through the entire process one time, so you understand it.
This is the hard part of land lording, but deal with it head on and without drama, and everyone will be better off.
Real Estate Investor · Lakeville, MN · Member since 2008 · 153 posts · 17 votes
14y
Thanks to everyone for getting back to me. Don - I can't make it a fourth without rezoning it - a lengthy and expensive process in MN. Cash for keys may be the way to go. We'll see how it goes.
What about calling the Section 8 office and telling them she is not paying her portion of the rent?
Full-Time Investor · Charlotte, NC · Member since 2009 · 2k+ posts · 1k+ votes
14y
that is some leverage you may have over them..most lower income tenants don't care if they're evicted...however, if you report her to the sec 8 authority that you're evicting her for not paying her portion, they may take her voucher away..that could scare her into straightening up and/or getting out of there asap
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
14y
Some areas do not allow you to file for eviction without first having a valid rental license (and it becomes a real chicken and egg problem, because to get a valid license, you have to get everything else in compliance - like the occupants in the non-permitted area would have to go first). Check whether that is a requirement for your location. If it is, a cash for keys arrangement seems to be in order.
As for the Section 8 tenant, non-payment of their portion of rent is grounds for eviction. Most landlords I speak with regarding Section 8 only take those tenants where the tenant-paid portion is so small that the landlord is willing to forego collecting it; their expectation is that it will be unpaid at some point, so if it is a negligible amount they just don't worry.
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
14y
I have section 8 tenants. Unfortunately I think you will find that section 8 cares more about their tenants than the landlords.
I have gone the route before of section 8 violations and the case workers do nothing.You simply have to evict the section 8 tenants.Mine not in compliance went voluntarily.
It was a case of one great tenant next door had a small child care facility of watching 4 to 5 kids.The section 8 next door that were inherited tenants I received upon inspection had a pit bull and a rottweiler.
They were told that was a violation of their lease.We evicted and they said they had gotten rid of the animal only to find they were hiding it and was back again.The parents dropping off the kids were scared of the pit bull for the day care next door.
This tenant also had a portion of utilities they were responsible for after the voucher paid.They went round and round not understanding why they paid the difference etc.
I can tell you when you look at section 8 it is great as long as you pay attention to the voucher.If you want to rent for 800 and the voucher is for 500 then don't do it.They simply will not make up the difference.If it's only 50 bucks they have to come up with then they can usually pull it off.
Section 8 inspectors are real picky on all the things they want fixed before you pass inspection.If a tenant wears down a property heavily each year and you have to put a ton of money in to pass inspection each time that is a consideration.Don't be quick to evict the other regular tenant.
You have to treat them like a person with a mortgage falling on hard times. Is this a person with a temporary bump in the road or a habitual offender??
I tell tenants that pay partials I work with them as long as the late fee is paid and they are caught up in week 2 to 3.It's better for me than going a few months without rent and reconditioning the place.
To be clear I DO NOT tell them it is okay to pay late each month NOR do I let the balance keep growing past what is owed for that current month. I work with them occasionally on a limited basis.If the tenant is just late but they are a good tenant in all other respects that is different from a tenant that is not paying and has other things going on with them as well.
In that case you inherited an improperly screened tenant and must make them cone into compliance or leave.When buying properties like this do not count on the rental income right away as you have to go through a purging process with the bad tenants.
Real Estate Investor · Lakeville, MN · Member since 2008 · 153 posts · 17 votes
14y
OK - I talked to the tenants and told them that they needed to get the rent in by Thursday or eviction will start. Now I realized I don't have the full name of one of the tenants and my prepaid Legal service will not help me without their full name. There is no lease in place with these tenants right now. When i call this tenant now they won't answer the phone. Anyone have any ideas on how I could find out their name? I tried calling the previous landlord and can't get a hold of him either. Thanks.
Real Estate Investor · NY · Member since 2008 · 313 posts · 87 votes
14y
I dont think you need the name. My attorney evicted a inherited non payed and the notice said "John Doe and all occupants" or something to that matter.
Investor · CA · Member since 2010 · 150 posts · 40 votes
14y
I went through this with my first property purchase. The tenant wasn't Section 8, but was partially subsidized. After their portion came to 75% of net rents they stopped paying. Collection of rents from the subsidy continued, but worked closely with their social worker to file the complaints, which lead to a court eviction. I was very happy at doing this early in my real estate experience, because it got the "biggest fear" in the newbies minds, behind me.
Hal,
Don't just talk to them. Read your local laws with eviction, and don't start the process without a written notice several days in advance (this is typically the very start, and it must be in writing). I'd recommend putting it ON the front door, and take a picture OF the note WHILE on the front door as evidence / proof.
Real Estate Investor · Philadelphia, PA · Member since 2011 · 16 posts · 0 votes
14y
I had a section 8 tenant and she only had to pay about 10% of the $1,000 a month rent payment and over 60% of the time she never did or I had to chase her for the money, so I would prefer not to have a section 8 tenant again.
The only reason I took her is because my rental management company tried to find a suitable tenant for 3 months and this was all they could find. I figured some rent was better than none.
One seasoned investor told me how to get rid of unwanted tenants and he called it "U-Haul Money".
If you really want them out, offer to give them money to rent a U-haul for a one way move if they move out in say 72 hours or less.
He told me that was better than to have them staying there a few months trashing the place and not paying you anything.
Real Estate Investor · Lakeville, MN · Member since 2008 · 153 posts · 17 votes
14y
Thanks for all your help everyone. It seems to have worked. I offered one guy who was not paying rent $500 if he could be out by this Friday, and gave him $100 of it up front to show I was serious. He accepted. The guy in the illegal unit thinks he can be out by end of February, and my section 8 tenant just paid her portion of the rent. I told her I will also need a security deposit and she is contacting several agencies to get assistance to pay it. I told her no deposit, no rental and she understands.
I even have an old (good) tenant call me up and ask if I had anything open! Things are working out and I appreciate the help.
