Need some help here with tenants. Serious problem. Please!

Need some help here with tenants. Serious problem. Please!

Torrington, CT · Member since 2013 · 26 posts · 4 votes

Hi all, having a serious situation here at a 3 family property I own.

It's a 3 family property. A few months back, the 3rd floor tenant stopped paying rent. Evicted him. Cost a couple grand to do, but got rid of him.

He caused thousands of dollars damage to the property, which insurance would not cover, as it was negligence.

I paid to repair the place.

Right after that, the 1st floor tenants told us they don't think it's fair that the 3rd floor "got away" without paying rent, so they're not paying either. They said "evict us if you can still afford it".

So we threw them out too.

Now, our 2nd floor tenant, which has been ducking us on the rent, told us that we need to pay her 3200 in cash or she won't pay rent anymore either.

She is saying that we owe her the money because the hallway lights are on her electric bill and it's "illegal" to be set up that way.

The 3200 is for her electric bill.

Thing is, it is NOT a common area. 1st floor has their own private entrance, with their own lights, on their own bill.

The hallway in question is specifically for the 2nd and 3rd floors. There are 2 lights on her electric that go to the 2nd floor, 3rd floor has their own lighting, on their own bill.

EVERYTHING is separate!

She also claims that since she constantly trips one particular 15 amp breaker that there's "faulty electrical". Things is, she has the stove, fridge, washer and dryer, televisions, cable boxes, and fish tanks all in the same damn room. She's overloading the circuit!

She said if we don't pay her immediately, she's going to make claims against us to the state and have our heads.

We don't feel we have done anything wrong.

This is NOT the first run-in we've had with her. Just the latest.

The eviction and repairs have completely drained us. All of our reserves, everything.

We're to the point where we'll lose everything, and she knows it.

What the hell do i do?

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Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
12y

Call her bluff , either way its going to cost money . If you file the eviction before she makes the complaints about whatever , it will look better than the opposite , if she makes complaints and then you file .

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  • Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
    12y

    Evict her plain and simple. I know this is going to sound a little rough, but if you don't have the reserves you need then you have to find them.

    How much does an eviction cost you? Let's say $1,500. Offer her $500 AFTER she moves out and leaves the place in broom clean condition. If she refuses evict her.

    Do you have any retirement accts you can borrow against? A personal loan from Prosper or lending club? Credit Card? Friend? Family?.... you get the point you've got to dig and find the money and get her out. Even if you don't have the money to pay for repairs to her place initially at least getting her out of the property solves your initial problem, after you get her out you can get new tenants in the other places and build reserves to fund repairs to her unit.

  • Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
    12y

    Call her bluff , either way its going to cost money . If you file the eviction before she makes the complaints about whatever , it will look better than the opposite , if she makes complaints and then you file .

  • Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
    12y

    @Matthew Paul makes a very good point about you filing first otherwise it may look like retribution. You may want to file on Mon and have an electrician come "inspect" the circuit and write on the receipt that it is overloaded due to her having too many items.

    I know this isn't what you want to hear but unfortunately it is going to cost money, and if you don't get her out it WILL cost more money it just might be delayed until next month....

  • Commercial Real Estate Broker · Scottsdale, AZ · Member since 2013 · 31 posts · 14 votes
    12y

    I agree with Matt. Convict her for not payment. I would also mail her letter stating who has responsibility for the hall way lights and code limits for the number amps allowed in an outlet.

    Sounds like you need to just restart with better tenants.

  • Investor · Fort Lauderdale, FL · Member since 2012 · 1k+ posts · 465 votes
    12y
    Originally posted by @Tom V.:

    She also claims that since she constantly trips one particular 15 amp breaker that there's "faulty electrical". Things is, she has the stove, fridge, washer and dryer, televisions, cable boxes, and fish tanks all in the same damn room. She's overloading the circuit!

    Sorry this is happening to you.

    So you are being blackmailed.

    Regarding your comment on the electrical overloading...There should be multiple circuits serving these appliances. Dryer is usually dedicated circuit and 240V, a stove/range is also dedicated circuit. Fridge may be, may be not. I seriously doubt they are all on the same circuit, being in the same "room" does not mean there is only one circuit serving them devices. Check the wiring (gauge) and breakers and what devices are truly connected and work out the what's causing the tripping.

  • Buy and Hold Investor · Nashville, TN · Member since 2013 · 264 posts · 102 votes
    12y

    Sorry you're dealing with all this, man.

  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    12y

    Tom did the 3rd floor tenant answer to the court on eviction? If not then a judge can usually only grant eviction and not a judgment for back rent and damages against the tenant. For that you have to go to small claims court and get a judgment against them. Collecting is a totally different animal and odds are very low.

    How much do you owe on this property??` If you have a loan can you try and get the interest rate reduced or if you have paid on time sometimes the lender will put a payment on the back end to help you out. What are the rents per unit and what did you pay for the property when buying it? Does the landlord pay water?

    Do you care about your credit? You might could short sale it if you overpaid for it. There is not going to be a 100% clean solution to this problem. There should be ways to minimize the damage.

    On the existing tenant evicting her now would be best. Remember you CAN'T rationalize with tenants. I have been through your type of stuff but I had a 20 unit apartment building.

    No legal advice.

  • Torrington, CT · Member since 2013 · 26 posts · 4 votes
    12y

    You're right, I didn't think about the dedicated circuits. And it is all up to code, electrical was done 2 years ago, and signed off on. Fire Marshall re-inspected 3 months ago, again signed off on.

    Nice guy, and told us everything he looked at.

    I had a new 3rd floor tenant move in November 1st, and just signed a lease for the 1st floor and they will move in Feb 1st.

    I have no funds left, on top of all this wife lost her job a few months ago, and we're trying to recover still. It all just came crashing down at once.

    I already cashed in retirement just to keep afloat. I don't even have this months mortgage payments. With her rent, I would've swung it. But without it, I don't.

    I decided I WILL be filing papers first thing Monday. REGARDLESS of what happens in this situation. She could write me a check tonight, I don't care. I can't deal with her crap anymore.

    I started out with PLENTY of reserves. Sad to see my life savings go in just 6 months. Dammit.

    By the way, she's claiming that since those 2 lightbulbs she shouldn't be paying for, we have to pay 100% of her electric bill for the entire time she's lived there. No way. And again,t hey are HERS! NOT common area!


  • Portland, OR · Member since 2013 · 48 posts · 14 votes
    12y

    WOW.... This is definitely a horror story. I really feel for you. I am new to being a rental property owner so hearing these kind of stories is very scary.

    I may have gotten a little bit lucky with my investment since it is in Texas. From what I hear it is pretty easy to evict in TX, and not very expensive. Hope this is true...

    I wonder if you would have better luck with your new tenants if they were section 8? If you can get section 8 tenants in there the state will being paying you most if not all of the rents collected. This will make it so tenants can't stop paying rent. Also I heard that if they trash the place they will lose their section 8 voucher for the next place they want to live.

    Even though I have very little experience, I would not "pay off" a tenant. Maybe $500 or less, but $3,500.00, NO WAY! I would rather pay that amount to a lawyer or court to have them evicted.... Then if they trashed the place I would take them to court for the damages, even if I didn't I didn't think I would ever see the money from them...

  • Torrington, CT · Member since 2013 · 26 posts · 4 votes
    12y
    Originally posted by @Joel Owens:
    Tom did the 3rd floor tenant answer to the court on eviction? If not then a judge can usually only grant eviction and not a judgment for back rent and damages against the tenant. For that you have to go to small claims court and get a judgment against them. Collecting is a totally different animal and odds are very low.

    How much do you owe on this property??` If you have a loan can you try and get the interest rate reduced or if you have paid on time sometimes the lender will put a payment on the back end to help you out. What are the rents per unit and what did you pay for the property when buying it? Does the landlord pay water?

    Do you care about your credit? You might could short sale it if you overpaid for it. There is not going to be a 100% clean solution to this problem. There should be ways to minimize the damage.

    On the existing tenant evicting her now would be best. Remember you CAN'T rationalize with tenants. I have been through your type of stuff but I had a 20 unit apartment building.

    No legal advice.

    Yes they did. We went to court, and the eviction was granted. The 1st floor did NOT, and left on their own accord rather than face the court.

    I owe roughly 112k, property value is roughly 180k and I also own the attached lot with value of roughly 20-25k.

    They are in an LLC, and far as I know I cannot equity loan on a property held in an LLC.

    If I could, life would b much easier.

    Small clams cases pending on both 3rd and 1st floor tenants for back rent, and 3rd floor damages.

    I pay water bill in total every 3 months.

    Mortgage is 1200 monthly not including insurance or water, and rentals are 875, 950, and 600. HOWEVER 1st at 875 is not until Feb 1st. (I did take 2 months deposit, but obviously cannot spend their security deposit. First month was paid, and is going towards my mortgage this month)

  • Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
    12y

    Sorry about your financials , When things get tough , you have to get tough , do what ever it takes , short term loan from a friend , pawn a car , sell jewelry , give blood . Pulling a rabbit out of the hat isnt easy , but it CAN be done .

  • Dallas, TX · Member since 2013 · 4k+ posts · 744 votes
    12y
    Seth,

    Eviction in Texas is really fast.

    Joe Gore
  • Dallas, TX · Member since 2013 · 4k+ posts · 744 votes
    12y
    Tom,

    Once you get the eviction turn it over to a collection agency, so they can collect and put it on their credit report.


    Joe Gore

  • Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
    12y

    Oh, man, I'm sorry for you to have to go through this.

    Maybe it would be worthwhile for you to try to sell the vacant lot? Does it have road frontage and fit the zoning requirements?

    If so, check out whatever new contstruction is or has been going on and what builders paid for it. Write down those builder names, get their fax# and create a flyer that you send to all of them at the same time. ask for less than Full market value in exchange for quick cash closing.

    Also, I agree to immediately file for eviction. If she complains first, the eviction will look like harassment and might not be accepted.

  • Dawn AnastasiPro Member
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    12y

    Don't let people blackmail you plain and simple. I understand you don't have the money. Have you looked into other sources of borrowed funds?

  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    12y

    875,950,600 = 2,425 a month X 12 = 29,100 a year gross income

    Landlord pays water so take away 60%. 29,100 X .40 (60% costs) = 11,640 NOI

    11,640 NOI/ 180,000 value (your projections) = 6 CAP rate. Are properties trading at a 6 cap there?? If not your perceived equity value may be off. You could try and fire sale that lot next to you to a land banker buyer or a builder for 10 to 15k IF your 25k value is accurate.

    Immediate capex today would come off your valuation so if 6 cap is accurate and 180,000 but you needed 10,000 in repairs today for stabilization then 170,000 is the value.

    No legal advice

  • Multi-family Investor · Member since 2008 · 28 posts · 3 votes
    12y

    Why so much for an eviction? I find attorneys in New York who can have my tenant evicted in two weeks for $275. That includes filing fees, their court appearance, and all other attorney fees.

    I suggest you look into doing the eviction yourself or if you need an attorney, shop around for attorneys new to the market that are hungry for business or attorneys who mainly focus on evictions as their rates will be much lower.

    You can probably put it on a credit card or work a payment plan out with them to pay it off over time.

  • Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
    12y

    I assume your property is not in Torrington? I just did a quick search and the lowest sold lot there in the past year was 81K.

  • Torrington, CT · Member since 2013 · 26 posts · 4 votes
    12y

    It is in Torrington.

    The attached lot is zoned and approved as a building lot, however I currently have a paved 6-car driveway on it for off-street parking.

    I get rid of it, they park on the street. Which reduces the value of the rentals.

    Let me revise the 1st floor rent, it WAS 750 with the previous tenant. The new 875 number is the new tenant who moves in on Feb 1st.

    So at the previous rates it was 750, 950, 600

    Changes the numbers a bit. I have no idea what the CAP rate is for the area, a bit over my head.

    I do know our agent has said he could sell for 170-175 quickly. (meaning 2 months or so) Of course not being fully rented would reduce the value a bit. But again, being fully rented it has value to ME.

    Eviction cost is strictly due to the property being held in an LLC. CT states I MUST hire an attorney as I cannot represent a 3rd party. (the LLC)

    The total cost was high, but it got the job done quick.4-6 weeks total. And that was with the tenants fighting every step of the way.

    I have found after the fact cheaper attorney rates, would make total 900-1k. Including attorney fees and court costs. However, where do I get the thousand bucks?

    I am so drained, that one of the mortgages (my house or the rental property) are not being paid this month. I needed her to pay her rent to cover it all.

    And yes, I know I'm riding the line here so close tot he 15th with both of my december mortgages still due, but we got hit so hard by this we needed those couple of extra paychecks to catch up.

    This was supposed to be the month we catch up. January is a 3 paycheck month (paid every 2 weeks, the dates just fall that way) and we'd be saving again.

    After this, I don't know. And if I have to pay 1k for an eviction as well, then the other mortgage doesn't get paid either.

    I literally put all I had left into the 3rd floor to fix it. Thousands. tenant flooded the apartment TWICE (yes police were called both times) and when finally removed, left all of his belongings. Had to gut the floor down to beams and do it all from subfloor on up. Looks great now, but took everything I had left to do it.

    And now this.

    And now it's the holidays, and I have 2 kids, 7 and 9 year old girls, to get gifts for.

    My god, I don't know what I'm going to do.

    On a good note, just got approved for a one month deferment on my car. Possibly 2 months, they'll let me know wednesday. But 1 for sure. So that helps a bit.

    I might have my wife call her father. She hasn't talked to him in years, but desparate times....

  • Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
    12y

    Ok, it looks as if something has to give. You may not want it, but if you're at risk of losing everything, wouldn't it be better to maybe let go of the driveway and give the tenants each a $ 25/month reduction?

    When you offer the lot for sale, ask that you will be allowed to keep using it for parking for 3 months. A builder will take that long to get all the permits going.

    There are only 2 lots for sale in Torrington. The lower one is on Warfield st , 6000 sqf for $ 300,000 asking price. The other one is larger and + $ 800,000 . So, you may be underestimating the value

  • Investor · Fort Lauderdale, FL · Member since 2012 · 1k+ posts · 465 votes
    12y

    Hang in there.

    I am surprised home owners insurance won't cover the tenant's damages? They cover vandalism, and what your tenant did, was it deliberate out of spite? I would say that's vandalism and not negligence.

  • Derreck WellsPro Member
    Specialist · Pelham, NH · Member since 2013 · 544 posts · 269 votes
    12y
    Originally posted by @Jeremy L:
    Why so much for an eviction? I find attorneys in New York who can have my tenant evicted in two weeks for $275. That includes filing fees, their court appearance, and all other attorney fees.

    I suggest you look into doing the eviction yourself or if you need an attorney, shop around for attorneys new to the market that are hungry for business or attorneys who mainly focus on evictions as their rates will be much lower.

    You can probably put it on a credit card or work a payment plan out with them to pay it off over time.

    Different states are different in evictions. In NH it's quick, cheap, and simple. In MA it can take 6 months or more, costs a fortune, and when the tenant finally has to move, landlord has to pay a moving company (not picked by you but by the sheriff to the tune of $1800 for a 1 bedroom apt move) to move the tenant's stuff to a storage bin that the landlord has to then pay for 6 months.

  • Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
    12y

    I'm thinking that you may be thinking the value of your lot is your tax assessment and since you never thought of selling it, because it has the 6 car driveway, you never looked at any other information.

    Or maybe you have the value, based on the assessment split on your multi-family property. But that doesn't have a lot of meaning.

    You might find out that the lot is worth more than the 3-family home right now ;-). And if that is so, you might even mention the possibility of selling the MF home to the builder as well, for lot value.

    I often find that the things that seem like a disaster when we're standing in front of them, turned into a blessing, when we look back a year or 2 later.

  • Torrington, CT · Member since 2013 · 26 posts · 4 votes
    12y

    I doubt it's worth that much.

    it's small, only 3k sq ft. It is approved as a building lot, and I have that paperwork, but it was grandfathered in under old laws/codes.

    And it's in a big multi-family area. Not much space between houses etc.... Not very desirable.

    It's this lot and driveway that sets this house apart from the others.

    Either way, I'd sell i if I could. But I don't think any builders would be very interested in the situation.

    Either way, I reviewed, again, all of the CT laws (

    http://www.jud.ct.gov/lawlib/law/landlord.htm )

    And can find no legal justification for what she's claiming.

    Even, hypothetically, if it were classified as a common area, then she cannot withhold rent. She could however switch electric into my name OR deduct the estimated cost of the infringing items. Both of which are easy to deal with.

    But she can NOT withhold rent.

    How bad does a 1 time late payment on a mortgage hit your credit?

    I want to use the money to evict her. I cannot deal with this.

    I've been the nicest, most pleasant landlord to deal with.

    Our kids have played together for chrissakes.

    By the way, interesting enough, I called a buddy of mine and spoke to him about it. This buddy happens to work with the tenant on a daily basis.

    He told me she was just offered a promotion for an out-of-state position, and the company offered to pay all relocation, travel, expenses, temporary housing, etc....

    So it looks like this is just a quick cash grab. She's moving, and thinks she has nothing to lose as she's got a "free ride" so to speak.

    How can people be so damn evil. I don't get it.

  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    12y

    Sorry this is happening to you. This tenant has picked up on how tight you are and stressed out. Do call her bluff and come on strong in terms of delivering the message pay up or quit. The first part of the battle is not about whether you can do it. It is whether she thinks you can/will and how she responds to that. I would say look do you see those other non-payers living here no. The electric is fine , the lights are yours, you pay or you go. If you can manage even to take the first step to file on her maybe that is what she needs. Do not let her see it get to you.

    Show the true picture here but convey to this tenant you are in a strong position not that you have money but rather you will do what it takes. Hey , you cleared two deadbeats! I am not sure who you have to go to for financial support. You seem to be calling in all the reserves you have but you might need to think creatively, family , close relationship, social organizations to get you through the holiday. Selling the lot may be a long term solution but short term you might need to ask someone you might not normally go to. I do wish you luck and take some time to enjoy those girls.

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