Does eviction hurt your chances of re-cooping back rent?
Hi Bigger Pockets Community,
I have a potential eviction and I have not had to deal with an eviction before. I’d love to hear you weight on the pros and cons given the circumstances.
Our tenant is still catching up on 2022 rent. The property is in Dana Point, CA (rent is $4,500) and our tenant is $30,500 behind on payments. The tenant started in 2019. He’s a speaker at conventions and while I want to believe him because he always says “he’s going to catch up,” I just get too many “dog ate my homework excuses.” In March of 2023, we had him put together a payment plan so he could catch up and he came up with the below plan.
“The following payment plan will bring us current by April 15, 2023. This is weighted for delays from my current projects (example-CES call today pushed to March 13). I will accelerate the payment schedule if the revenue comes in ahead of this schedule.
Balance $30,500 (7 payments @ $4,500 minus $1,000 Dec 19&22 overpayment)
Payment Schedule:
$15,000 March 17, 2023 (includes March rent $4,500)
$10,000 April 1, 2023 (includes April rent $4,500)
$10,000 April 15, 2023
This has been a very difficult few years but happy to see the light at the end of the tunnel.”
We are now past April 15th and he has not made one of the payments that he put on the schedule. He says he’s going to get a large lump sum soon, but there has been countless delays.
What option is best?
- A) He seems sincere (though his excuses have been many so it’s hard to trust him anymore) and hope he gets current soon. He says his number one priority is to pay the back rent. I'm not sure if I believe him because he's promised this before. Does this option have the best chance of re-cooping the $30,500)?
- B) At a RE investor event in 2019, a fellow investor told me if you ever need an eviction, you should contact this company: https://www.fastevictionservice.com. He says they are fast and not that expensive. I contacted them and they said, “we should give the tenant a 3 day notice to pay.” Do you agree with this choice? If I go this route, is the percentage chance of re-cooping the $30,500 get way lower? My thought is by evicting him, the tenant will leave, but the chances of re-cooping the $30,500 go way lower, but I’m open to what others have found.
Open to all suggestions. Thank you,
Jason