Worst Tenant ever need advice

Worst Tenant ever need advice

First Time LandLord Bronx, NY · Member since 2014 · 31 posts · 1 vote

Hello guys , 

I have a huge problem ( i mean huge) . Long story short ( Very long story ) i brought a home in Cleveland for 13K 2 family my first property . When i brought the home it was full with people living up and down stairs Rented both generating $1100 in rent combined . Soon as  the property is purchased both tenants leave . Wow ! now i come to Cleveland to see what's going on come to the home there gone and now i have to paint the upper stairs and put in new carpet . The problem i had was i didn't have the funds at the time to do the repairs . I knew a contractor before i bought the home that i mean at a reo property . So i tell him what had happen and then he tells me that he would help me do the repairs and i'll pay him one i get it rented . I thought it was a good idea at the time . So tell him i'll get a tenant just do the repairs . I leave to go back to new york were i work and live . i left the keys to the home with him (i know i know ) . he calls me 2 weeks later and tells me to speak with my tenant . I'm shocked!!!!!!!!!!! she yells at me over the phone about repairs and i never meet this woman a day in my life .  She pays the contractor $1100.00 first months rent and deposit . He moves the woman in to the first floor unit with out telling me . she puts him back on the phone i say why did you do that . he tells me well i gotta get paid . He told me before that it would only cost $400 dollars to do the work But over the phone he tells me that it cost $1300 i tell him that's not what we agreed upon . He stops answering my calls i go to cleveland and all he did was paint 2 rooms and remove clothes from the attic . Fast forward now the woman says she wants to stay and pay rent . i said ok ( bad idea ) The woman has been in the home 3 months and only paid me $100 dollars . Now i'm trying to figure out who to get her out i don't have a lease with her and she won't leave . i really bad she's using up so much water it's unreal . 

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Dawn AnastasiPro Member
Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
11y

Step #1 - you need money.  You're not going to get anywhere without it.

Step #2 - get the tenant OUT.

Step #3 - rehab the property such that it's completely rent-ready.

Step #4 - get actual paying tenants in there. If you don't do it yourself, then hire a properly qualified property management firm to do it.  The contractor obviously just stuck any old person in there just so they can get some money.  A contractor is generally not a property manager.

If you can't at least do step #1, then sell off the property for what ever price you can get and get out of the business.

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  • Developer · Philadelphia, PA · Member since 2013 · 1k+ posts · 902 votes
    11y

    What doesn't kill us makes us stronger. You'll be able to bench press a Buick after this! 

    Hopefully you've got enough money to hire a property manager and make the necessary repairs, I don't see another way to make this work unless you were to sell and be out from under it. I feel for you, I really do. 

  • Investor · Washington, DC · Member since 2014 · 107 posts · 25 votes
    11y

    I'd get an attorney that specializes in landlord tenant relations and evict.

    You're probably going to need some working capital to get everything straightened out.  Maybe a family member will float you a loan or front some cash in exchange for equity and cash flow?

    I'd also recommend hiring a local property manager. It's going to be tough to manage a place (that I'm guessing is in a rougher neighborhood?) from that far away.

  • First Time LandLord Bronx, NY · Member since 2014 · 31 posts · 1 vote
    11y

    Thank you guys . I mean this lady is just crazy scream at me when i call for rent . 

  • Dawn AnastasiPro Member
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    11y

    Step #1 - you need money.  You're not going to get anywhere without it.

    Step #2 - get the tenant OUT.

    Step #3 - rehab the property such that it's completely rent-ready.

    Step #4 - get actual paying tenants in there. If you don't do it yourself, then hire a properly qualified property management firm to do it.  The contractor obviously just stuck any old person in there just so they can get some money.  A contractor is generally not a property manager.

    If you can't at least do step #1, then sell off the property for what ever price you can get and get out of the business.

  • First Time LandLord Bronx, NY · Member since 2014 · 31 posts · 1 vote
    11y

    I've been working and saving up . 

  • Investor · San Antonio, TX · Member since 2012 · 28 posts · 27 votes
    11y

    Hey Charles

    First, you don't need to get out of this business.

    You are not the first one to make those types of mistakes and you will not be the last.

    I been at this RE-thing for approx. 10 years and I have made some mistakes (I still do to this day)  and learned that there are solutions to all mistakes. I have numerous  rentals  in low income places and make a ton of money but I am also an expert at evictions. ( I do my own evictions)  Get online and read everything you can about evictions in that state  I am betting that you will have to send a certified letter to start the process.  What ever the process is you must take action and get it  going. Once the process start you don't need to have conversations with your tenant and if she start screaming hang up on her  immediately. Remember, you are in a business and deserve to be treated with respect but you will never get it unless you demand it.

    Good luck

  • Flipper/Rehabber · Williamsburg, VA · Member since 2008 · 143 posts · 105 votes
    11y
    Originally posted by @Charles Davis:

    Hello guys , 

    I have a huge problem ( i mean huge) . Long story short ( Very long story ) i brought a home in Cleveland for 13K 2 family my first property . When i brought the home it was full with people living up and down stairs Rented both generating $1100 in rent combined . Soon as  the property is purchased both tenants leave . Wow ! now i come to Cleveland to see what's going on come to the home there gone and now i have to paint the upper stairs and put in new carpet . The problem i had was i didn't have the funds at the time to do the repairs . I knew a contractor before i bought the home that i mean at a reo property . So i tell him what had happen and then he tells me that he would help me do the repairs and i'll pay him one i get it rented . I thought it was a good idea at the time . So tell him i'll get a tenant just do the repairs . I leave to go back to new york were i work and live . i left the keys to the home with him (i know i know ) . he calls me 2 weeks later and tells me to speak with my tenant . I'm shocked!!!!!!!!!!! she yells at me over the phone about repairs and i never meet this woman a day in my life .  She pays the contractor $1100.00 first months rent and deposit . He moves the woman in to the first floor unit with out telling me . she puts him back on the phone i say why did you do that . he tells me well i gotta get paid . He told me before that it would only cost $400 dollars to do the work But over the phone he tells me that it cost $1300 i tell him that's not what we agreed upon . He stops answering my calls i go to cleveland and all he did was paint 2 rooms and remove clothes from the attic . Fast forward now the woman says she wants to stay and pay rent . i said ok ( bad idea ) The woman has been in the home 3 months and only paid me $100 dollars . Now i'm trying to figure out who to get her out i don't have a lease with her and she won't leave . i really bad she's using up so much water it's unreal . 

    Whoa.

    Sorry to read about all that, Charles. Before I continue... I'd like to tell you to keep going at it. Don't let this get you down, you're grinding, my friend. I have been in a similar situation. 

    If cash is a problem, I would suggest that you call the county court house ask them about procedures to evict; they are usually pretty helpful. They should have an Unlawful Detainer form of some sort that you have to fill out. Get one somehow, some way.

    Then write up a 3-day notice and mail it via certified mail to the "tenant" ASAP.

    While the notice is on it's way, fill out that unlawful detainer form and prepare to file it with the county court clerk. If the tenant is not gone within three days after receiving the notice, file to have them removed (you will have to pay a small fee).

    The court should schedule a hearing, in which you should get a favorable ruling, in your circumstance... then they'll send a sheriff to the residence to have that "tenant's" stuff removed. Then you can change the locks after that and shut down the utilities.

    This process is similar to the one in Virginia. The results were pretty swift for me. Hopefully it's the same for you.

  • Rental Property Investor · Holley, NY · Member since 2011 · 507 posts · 347 votes
    11y

    You've been given some good advice already.  Eviction is a must, ASAP.  When you go to court, be prepared to document to the best of your ability when the tenant started to occupy the property, even if you don't have a written lease.  I can guarantee that she is going to bring up the money given to your contractor.  I wouldn't bring it up, but I wouldn't argue either.  It might look something like this (I'm making up numbers and dates to demonstrate).  Let's say she moved in September 1 and the market rent is $ 550 for the apartment she occupies.  As of today she would have had to pay for September through December (4 months), or $ 2,200.  By the way, by the time you get to court, she would owe January as well, so call it $ 2,750.  She claims to have paid your former contractor $ 1,100.  I wouldn't argue about that money, it is already lost to you and right now you need POSSESSION back first so that you can begin to fix your other mistakes.  It is your call whether you want to ask the judge for a monetary judgement or if you only want possession back.  The tenant likely doesn't have any money, so I would do whatever necessary to just get her out.

    While working on the eviction, you need to figure out the money problem.  I'm going to assume by the purchase price that you paid all cash for the home.  At this price range, you will find it difficult to borrow money against the home in a traditional manner, so it is time to get creative.  Think outside the box.  The first thing I would try would be to find a hard money lender that operates near the property.  Tell them that you have a property worth "x", let's pick a number at $ 15,000 based on purchase price.  Tell the hard money lender that you want to borrow $ 5,000 against the property, plus closing costs to record the mortgage, etc.  So you might borrow a total of $ 7,000, but you will have $ 5,000 in hand because the other $ 2,000 pays the lawyers and fees.  The interest rate you will pay will likely be high (think 14-16%), that doesn't matter, you need cash now and this is probably the fastest way to get it based on your original post.

    Now, you have a little cash and an empty house. If you don't leave near it, you need a reputable property manager. Again, key word is REPUTABLE! Contact a local REIA and see if you can get some names. Be very aggressive checking references. You want to talk to owners that have used that PM for several years. You might also want to speak with their tenants to get both sides of the story. Don't take anybody at their word, verify everything. There are a lot of good PM's around, there are also a lot of shady ones.

    In a few months, you will have passed your freshman exam in the School of Hard Knocks and will be ready to move on to your sophomore year.  I can see numerous mistakes in your original post and I can also see that you recognize what they are.  Every one of us has made mistakes.  Anybody that says they haven't either hasn't made an actual investment or is lying.  The money lost is best thought of as "tuition".  Respect the lessons and don't repeat the mistakes.

    Time to take the bull by the horns and get control of it.  Good luck and happy investing!  (hopefully in a few months you can look back, open a cold one, chuckle and say "that kicked my a$$).  Keep going, don't quit now.

  • Investor · San Ramon, CA · Member since 2011 · 1k+ posts · 569 votes
    11y

    It hasn't been said yet... but seriously... a $13,000 house that rents for $1,100 a month and you weren't a bit suspicious?  No cash reserves?

    You didn't prepare for this, you jumped without looking.

    You have 2 choices... 1, sell the property and start actually reading the threads here to get an education.  2, throw some more cash at this property and buy the education.  You've got a lot of lessons to learn and several of them are bound to be expensive but you can survive them with cash.

    If you have decent credit you can walk into most barks and get a signature loan for $5 - 10k which would have been enough to fix your problems up front but may no longer be.

    If you leave in NYC and own a rental in Cleveland, get a real Property Management company.  On a $13k property in the ghetto, you're going to need a good one!

  • Isaac RowePro Member
    Rental Property Investor · Cleveland, OH · Member since 2014 · 214 posts · 86 votes
    11y

    Nathan is 100% right about getting a real PM company.  Not all companies will manage a property like that, so you will have to call around a little bit.  The one I normally work with in the area probably won't take it, but I know they have an attorney who does evictions for 400ish dollars.  Hopefully you can find someone to do it that is in a similar price range.  

    You probably want to try to find an attorney to handle the eviction, because if you take one misstep  your setting yourself back even further.  

    Properties at that price level, normally require extensive management from people who know the area very well in order to turn a profit.  

    Good luck dealing with this!  At least your taking your lumps early on!  

  • First Time LandLord Bronx, NY · Member since 2014 · 31 posts · 1 vote
    11y
    Originally posted by @Charles Davis:

    That's really uncalled for i came here for help .........

  • First Time LandLord Bronx, NY · Member since 2014 · 31 posts · 1 vote
    11y
    Originally posted by @Mike Clark:

    Hey Charles

    First, you don't need to get out of this business.

    You are not the first one to make those types of mistakes and you will not be the last.

    I been at this RE-thing for approx. 10 years and I have made some mistakes (I still do to this day)  and learned that there are solutions to all mistakes. I have numerous  rentals  in low income places and make a ton of money but I am also an expert at evictions. ( I do my own evictions)  Get online and read everything you can about evictions in that state  I am betting that you will have to send a certified letter to start the process.  What ever the process is you must take action and get it  going. Once the process start you don't need to have conversations with your tenant and if she start screaming hang up on her  immediately. Remember, you are in a business and deserve to be treated with respect but you will never get it unless you demand it.

    Good luck

     Thank you !

  • First Time LandLord Bronx, NY · Member since 2014 · 31 posts · 1 vote
    11y
    Originally posted by @Dawn Anastasi:

    Step #1 - you need money.  You're not going to get anywhere without it.

    Step #2 - get the tenant OUT.

    Step #3 - rehab the property such that it's completely rent-ready.

    Step #4 - get actual paying tenants in there. If you don't do it yourself, then hire a properly qualified property management firm to do it.  The contractor obviously just stuck any old person in there just so they can get some money.  A contractor is generally not a property manager.

    If you can't at least do step #1, then sell off the property for what ever price you can get and get out of the business.

     I'm never gonna quit ! Came to far to get this one property ! 

  • Flipper/Rehabber · Mentor, OH · Member since 2011 · 121 posts · 51 votes
    11y
    I would do this: Sell and save whatever you have to get 2000.00 in cash. Call the renter up and offer her the 1100.00 back plus 500.00 because of the problems YOU caused her. I would make her part of the solution not the problem. She will leave for 1600 in cash and it is cheaper and faster then an eviction in Cuyahoga County. Once out I would assess the damage and clean out the entire place including both units, hallways, basement, garage and outside. Place air freshers in all levels of home. Next I would pick the unit that needs the least amount of work. If it's just paint PM and I'll give you my account at Sherwin Williams that you can use to buy paint for 15.00 a gallon. You theb need to paint the one unit and all hallways and entrance ways. Market the property and interview the protective tenants yourself. Once you find one. Save the rent for 2 months and repeat in the other unit. Within four months you should have this back to rented and cash flowing. If you need more help PM me and I'll be happy to help out in anyway I can I am from the Cleveland area and I am tired of seeing this happen to investors it ruins my city.
  • Longmeadow, MA · Member since 2014 · 45 posts · 17 votes
    11y

    Evictions can be a lengthy and expensive process.  I don't know what the tenant protection laws are like where you are but in my area the courts seriously favor tenants.  It can sometimes be much cheaper and much less of a headache to pay a tenant to leave.  You can offer her a few hundred to cover relocation expenses and give her 2wks or so to do that...don't pay her until she's gone and locks are changed!  If you're out of state I highly suggest a property manager like many others have suggested.  If she never signed a lease she is considered to have a month to month lease.  So if you don't want to or can't pay her to leave at this time send her a certified letter giving her 30 days to vacate the property.  If she doesn't then you can start the eviction process.  Best of luck to you with sorting this situation out, getting better tenants in and hopefully making a lot of money in real estate investing.

  • Bill S.Pro Member
    Moderator
    Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
    11y

    @Charles Davis since you don't want to quit. Take a week vacation from you job and drive out there and solve your problem.

    Leave Friday after work, arrive on Saturday. Met the tenant. Like @John Ellis said offer a significant sum to have her move by Sunday 5pm. If she moves great and do on Monday what I say below to do on Tuesday. If not visit landlord tenant court on Monday. Watch and observe for the day. Find the attorney that does the most cases. Get their card.  The next day hire them to solve your tenant problem and ask them for references for property managers.

    The next day (Tuesday) find a property manager. Spend the day interviewing and meeting property managers. Make sure they have contractors who can do the cleanup needed to get the place rent ready. See the multiple posts here about hiring and selecting PMs. 

    Wed select and hire a PM. 

    Have Thursday and Friday as margin so you can clean up loose ends in case things don't go according to the plan. Get used to having margin (time, money, energy, resources, and etc), It's required to be successful with rental properties.

    Sounds like one of the units is vacant. Watch the PM move into action to get it rented. 

    If you don't have the resources to pull this off you are in a very difficult situation. There is some good advise in this thread about what to do about that.

    Based on what you have said, you need to rework your business practices. Put everything in writing. Never hire a contractor without a written scope of work and a written price. Always check references for people you hire. Sharpen your screening skills. Screen your PM very carefully, even one that is referred by others. Remember, others might not have your same requirements, goals and objectives. You want people that align with your business practices. Read your property management agreement and understand it. Understand what it does not say as well. 

  • Real Estate Agent · Circleville, OH · Member since 2008 · 633 posts · 488 votes
    11y

    What contracts do you have in place?

    A court will want to look at those before anything else. If you don't have any sort of contract in place, then it's going to default to standard Ohio law in this case, which won't bode well at all for your contractor (If my understanding is right, he's acting as an agent which he is not, nor have you approved him to do so.) 

    At $13k purchase price and the POTENTIAL for $1100/mo in rent, you need to understand there's going to be severe problems with finding tenants, maintenance, prequalification and getting it to a regular cashflow. Even with 50% expenses you're still looking at near 50% simple cash return rates. Real estate is easy to make money in, but not THAT easy. 

  • Buy and Hold Investor · Nashville, TN · Member since 2013 · 264 posts · 102 votes
    11y

    Keep us posted with what you decide to do and how it's going. You've gotten a lot of good advice here, but I think you're going to have to learn a lot of skills you don't currently have in a hurry to pull this off. 

  • Real Estate Investor · Buffalo, NY · Member since 2013 · 23 posts · 8 votes
    11y

    Find a good property manager and ask them to help you solve your issues. They should recommend as follows:

    1- Start eviction proceedings for existing tenant. 1-2 months and $500.00 should do it.

    2- Bare bones fix up of empty apartment and get it rented quick. Try to keep it under a $1000.00 and get it ready for Jan 1st.

    3- once existing tenant is out bare bones fix up of second unit and get it rented. Once again keep it under $1000.00, should be done by end of Feb so my Mar1 you are fully rented and cash flowing nicely.

    If they recommend any thing else, be wary and keep looking. As you seem determined about this business learn from this and never buy out of town without a property manager.

    Good luck and keep us up to date.

  • Investor · Singapore · Member since 2013 · 1k+ posts · 3k+ votes
    11y

    Not specific advice for OP but how many mistakes can we count in this experience?

    1. A too good to be true deal. 13K for $1100 rent? Forget 2% thats almost 10%! You have wonder why the seller would sell that much cash flow that cheap. Even if its a bank, surely investors would bid up more that that for $1100 rent. Unless of course the area is a war zone.

    2. No reserves. This game is not for those without cash or access to cash. 

    3. Another TGBT deal with a shady contractor. Cmon..who really works for free on the "pay me when its rented" plan? 

    The market is not stupid. You don't get 10X GRM ratios without a lot of other catches included. You can get slightly better than market deals if you work hard but not that much!

  • Rental Property Investor · Glendale, CA · Member since 2013 · 685 posts · 334 votes
    11y

    Although your tenant seems uncooperative, I suggest a cash for keys option at first. Even though I'm sure you hate her, it'll be far easier, and less painful to getting her to leave. 

    If that doesn't work, file an unlawful detainer using the services of a paralegal just to make sure its done right. 

    As for raising capital, I think everyone has made several good recommendation, but you did mention you are working and saving up. 

    I think you have learned valuable lessons as an investor, and I'm sure you will make sure not to repeat the same mistakes. Sometimes, regardless of how much you educate yourself and study theory, you don't really learn unless you practice. 

    Good luck!

  • Seattle, WA · Member since 2014 · 307 posts · 170 votes
    11y

    Like a few others have posted a cash for keys approach seems the way to go. You may want to consider just selling the place afterwards if your unable to keep a reasonable reserve for repairs ect.

    I read some good lessons in your post. Its sad you are having to go thru this. I know its stressful. I come away with dont buy rentals out of the area which is already in my system.

    Good Luck to you

  • Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    11y

    The advice by everyone to evict the tenant immediately is actually BAD advice.

    DO NOT EVICT THE TENANT.

    It's a $13,000 house. The only thing keeping the plumbing, furnaces & H20 tanks in this house right now is the fact that this woman is living there.

    If this house goes empty all of that is gone. Guaranteed.

    You need to do the following in this order

    1. Hire a PM company.

    2. Perform needed repairs in the vacant unit.

    3. Rent out the vacant unit.

    4. Evict the problem tenant.

  • Investor · Hampton Roads, VA · Member since 2014 · 1k+ posts · 418 votes
    11y

    RUN FOR THE HILLS!!!

    Or

    Follow @James Wise and his advice.  House will potentially be vacant, ransacked, this time of year frozen.... Costly my man... Costly. 

  • Involved In Real Estate · San Antonio, TX · Member since 2014 · 34 posts · 7 votes
    11y

    Hello Charles,

    You have been given some great advice thus far! Your zeal to hop in the business as you have is definitely paid tuition.  You have to pick your associates and business partners carefully.  Your experience gained thus far can be a roadblock or a stepping stone.  Use these errors as possible fields of study that you can now go on to get your masters.

    1) Strategic Partnership

    2) Evictions 101

    3) Landlord Tenant Relations

    The fact that you are willing to go on the knowledge you currently have leads me to believe that if you continue to educate yourself and move forward you won't be stopped.  All things will work together for your good!

    Nate Perry

    LREA Broker/Investor

    San Antonio Tx

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