Hi, everybody, could you give me some advises for my situation? I have an older couple (in their mid 70s, they are in the wheel chairs), they have been paying the rent on time for 5 years. Lately, they have been late for rent because they were running out of money. They have secured loans from some veteran credit union to pay the last 5 months rents. Their lease will end by March 31, 2018. At first, they said they would move to live with their children, then they said they would move to a mobile home, yesterday, they were crying to my property manager, they want to stay 2 more days until some government facility would take them. They are donating all their belongings to the salvation army. Of course, we allow them stay free for 2 days. However, I wonder if they have no place to go, what would we do? Evict them? We don't want to through them on the street, they are really nice and decent people. What else would we do to help them? We cannot provide the free rent too long because we have a mortgage to pay also. Does anybody have similar situation? What will it end up? I have property manager to handle this sad situation, but she will ask us what we want to do eventually. So what will be our bottom line? Not hurting the tenants, not hurting us too? Thank you.

this being pro landlord site you pretty much know what folks are going to recommend.. and of course you have your own debts. Its a tough one.. I know if it was me I would let them live there rent free for 3 to 6 months to get their situation handled.. I would consider it one of my charitable givings for that year.. Although in a humerous note I fell for the one in Indiana two years ago my PM calls tenant cant afford rent and heat and they have a baby etc etc.. record colds.. so sure thing no problem give them 3 months free then pay it over the remaining months.. kind of like utls do.. well you know what happened they lived 3 months free and bolted out on the rest of their lease.. thats my style of landlording i go backwards. its these very situations that i was horrible at ... I could never make the tough decision until I figured out the folks were simply freddy freeloaders then I would do whats necessary. all the thoughts above for help should be explored.. and depending what state an eviction could drag on for sometime if these folks want to go to court.. Judge may give them extra leniency. But do what your heart tells you to do.. if they are good people and being honest .. do unto others.

If they have no family or church to help them, they need to consider their reality. They have chosen to disconnect themselves from the way we are designed to live, by not building and maintaining relationships they can depend on in later life. Yes, it can be a pain to keep people happy for decades but family and church are there for you when you need them. Now If you are running a ministry, you let them stay. If you are running a business you need to treat it as such. It is not a reflection on you, they have chosen this path. If your business fails for lack of payment, that is on you and it puts undo strain on your family and other tenants. By the way, this is just the beginning, baby boomers are now hitting peak "retirement" and have little in savings. Are you sure you want to be a landlord?

If they are veterans, I would first send them to various VA agencies to ask what can be done. After that, they should check with their local Housing Authority to see what programs they might qualify for. The problem is, if they haven't signed up yet, many of those programs have months-long or even years-long waiting lists. Bottom line though is they cannot stay in your property rent free. You need to think about what your hard line date is. Is it two days free? A week free? A month free? Only you can answer that. Neither two days nor two months is right nor wrong. It's simply a matter of what you choose. However, once you choose your hard date, I would stick by it. If you tell them they have one week, be prepared to have them move at the end of 7 days. It's been my experience that tenants never really leave and become homeless. At the "final moment" some friend/family/agency is waiting with a place for them to stay. It may not be convenient for either your tenant or the person who takes them in, but you shouldn't worry much. Someone will take them. But only after you set a hard date and have your property manager sternly insist they be out by that date. As long as you equivocate, they will cry the blues and say they have nowhere to go.

@Jo Zhou - I feel for you. You seem like you have a big heart. I'm the same way as you. These are elderly tenants who have come across hard times. I work for the Dept. of Human Services in the City & County of San Francisco. I would contact the Dept. of Aging and Adult Services or Adult Protective Services or its equivalent in San Diego and report this situation. The reason I mention APS is because these are disabled seniors who are at risk of becoming homeless and APS staff can certainly point you in the right direction. Obviously, you also need to have a discussion with these tenants about the fact that you can't allow them to remain rent free for much longer, but that you're doing your best to get them some help. Best of luck with this difficult situation.

Everyone has a sob story as long as there is someone to listen to it. I had a tenant who begged me not to raise rent for YEARS. She told me that she was scraping by, and living hand to mouth. I would only inch it up annually like $25 on a $1,225 rental rate. The market grew over the years, and I was under market by at least $250! Finally, I told her that I had to raise the rent to at least $1,400, and I gave her over 4 months notice so that she could plan/prepare if she decided to move. WITHOUT A BLINK of an eye, she answer back, "No, this is my home. I'll just make it work". It made me somewhat angry because I had allowed my heartstrings to be pulled all those years, all to find out that it was all for nothing. She had the money. When people need to pony up, they will. While sad (potentially), this is NOT your problem.

@Jo Zhou Wow, one of the more difficult cases. 99% of the time I fall into the start eviction ask questions later camp, but this is that 1% I guess. Assuming all of the assumptions we've made are true: 1. they are good people deserving of help, 2. they have tried everything (like taking out a loan, I've never heard of anyone doing that. Most just don't pay you), 3. one of them served in the military; you have an opportunity to help someone so I say take it. Making sure to make a clear distinction between your rental business and your personal finances, nothing says you can't add a few months rent to their account out of your own pocket, via some cash to your PM. If that's not an option you can take a few hours to research and call around local charities, veteran's groups, housing assistance programs. Taking into account the technological difference what you could accomplish in a few hours would take them days or weeks. Call them up and offer them the fruits of your research. Drop by and offer to help them fill out a few forms online if you so choose. I could also be clouded by the assumption that they are veterans and I'm picturing evicting my grand parents, so take my advice with a grain of salt lol.

An old couple in difficulty and cannot pay rent, what could I do?

Jo Zhou

OP

San Diego, CA · Member since 2016 · 40 posts · 11 votes

8y

@Bjorn Ahlblad: you are right, how could I never think about how they would go shopping, do laundry, drive etc. Since they are on time with rent all the time, I never get the chance or need to see them. My PM told me that they cannot take care of the house any more, the dogs pee inside, The carpet needs to go, the concrete needs to be treated. I am preparing for the worst of the condition of the house.

I read the through the forum, people suggest PM to inspect the property every year. Maybe we should do that to all the future tenants. If we know their situation early, maybe we could save them lots of money for paying our rent. Cheaper place might be better for them. I even think in the beginning they would be better off to buy a mobile home than renting our property. San Diego has some really nice mobile home park, they are not that expensive back in 2013. If they allow me to look at their financials back then, maybe it would be better today. All of these are only my wishful thinking. I really wish their situation won’t be like today and it can be planned.

0 Reply

Erick M.

Alexandria, VA · Member since 2018 · 99 posts · 7 votes

8y

You have to do what makes you sleep well at night. There have been a lot of recommendations to kick them out but you should take into account as you said they paid for 5 years without problems.... if that is that case then their current crisis is likely to be true... if they have been good tenants to you then maybe you should be good to them and give them a small gift of an extra month or two while getting family, church veteran groups to help out to find a solution. If you talk to them you’ll likely find solutions for them like friends that may be able to assist them.

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Account Closed

Specialist · Paradise Valley, AZ · Member since 2018 · 3k+ posts · 2k+ votes

8y

Originally posted by @Jo Zhou:

Wow, thank you for all of your advises, specially to @@to point out specific organizations that may help the tenant in this situation. Thank you for @Jay Hinrichs and @Bill F. that you understand I really want to help them in my capacity. Thank you for @Mike M., @Cara Lonsdale and @Reed Kelly, @Rod D. to remind me of separating charity and business. I really agree with you because I am not in any position to have a charity.

See, I want to do both, help them but not become a charity. However, it seems that I cannot do both. There are still several days by April 2, I will keep you post where the things go. I will reach out those agencies and organizations to see what they can do for them.

@Mike M and @Rod D. you are questioning whether I should be in the rental business or not. Sure, I will think about it because I accidently become the landlord at the first place. Also, would you suggest something better and still passive? So far, I can see, at least, in this business, I could choose to do the right things, I thought.

Your question: "Also, would you suggest something better and still passive?" There several great alternatives for you. 1) You could be the money side of the investment while someone else is the acquistion and development and management side. 2) You could be a Private Lender that holds Notes. 3) Or, you could do Commercial properties. 4) You could do new construction. 5) You could be an investor in a Syndication. 6) You could own REITS. There are a variety of avenues to stay in real estate and not have the problems associated with being a landlord.

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Justin R.

Developer · San Diego, CA · Member since 2015 · 1k+ posts · 1k+ votes

8y

@Jo Zhou One thing I've done in the past is buy a tenant's stuff, then donate it and take the tax deduction. Give them a rent credit for the value of that tax deduction to me. Nets out zero on the P&L.

I have also introduced tenants to services (counseling for hoarding disorder, in particular) and have helped one Section 8 elderly tenant work through their paperwork.

In my neck of the woods, low income elderly people are first in line for Section 8 vouchers. May not solve your immediate problem, but either introducing them to that or introducing to an organization who can help with that would be my move.

2 Reply

Ryan Dossey

Real Estate Broker · Indianapolis, IN · Member since 2014 · 3k+ posts · 2k+ votes

8y

I think that anyone reading this post that's a property owner should use this as a good time to actually have outlined principles in writing of what/how things are done.

By having in writing what we do/when/why it clearly outlines our policies for us, for our tenants, and for our staff. (or management company)

In this instance we know that they have somewhere to go. (With their kids) As that was their stated option. If for some reason that environment was deemed unsafe they should have a back up plan.

My gut would be to offer to cannibalize their security deposit if the property was in decent shape and use that to cover 30 days. I would let them know that X is their hard move out date.

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Marc Winter

Real Estate Broker · Northeast PA · Member since 2017 · 2k+ posts · 2k+ votes

8y

OK, listen up: SERVE THEM NOTICE!

It has nothing to do with being hard or soft hearted. It has nothing to do with getting them thrown out onto the street.

What it WILL accomplish is once they have something in writing, ie Notice To Pay or Quit (or whatever your official notice is in your location) they can go to any of the many, MANY great agencies that help people in this type of situation.

Once properly served, everyone will know that the clock is ticking. That doesn't mean you MUST move to evict, but you put an end to the stories and made it a cold reality, which is necessary for the tenants AND the help organizations to take fast action to resolve, IMHO.

Other than that, if you feel so inclined, you can give them some moving money or donate to some charity that helps people in that situation--whatever you want to do.

BUT, remember what flight attendants tell you pre-flight: put your own oxygen mask on before trying to help others.

Best of luck.

6 Reply

Ola Dantis

Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes

8y

@Jo Zhou Such a heartbreaking story!

The issue is that you can only afford to do what you can in these situations and sometimes that might mean nothing, as you also have the bank to deal with if you don't pay the mortgage.

Do what you can to help!

Let us know how this goes. Thanks! - Ola

0 Reply

Caleb Heimsoth

Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes

8y

I didn’t read this entire thread so some of this has probably been said already. Like you said I would let them stay for 2 days through the end of their lease. After that they need to vacate. If they don’t vacate, give it maybe a week and start the eviction process. If you’re feeling generous you can give them some numbers or website for some shelters or non profits, but beyond that there’s not much you can do. Only other thing is maybe give them their deposit back, but if they owe you rent, I wouldn’t do that. Good luck

0 Reply

Thomas S.

Member since 2016 · 13k+ posts · 12k+ votes

8y

All tenants should be treated equally.

When a tennat does not pay rent, regardless of the reason you being the legal process to protect yourself as a landlord. If ultimately that means eviction then that is the tenants choice not the landlord. These tenants have known for a very long time that they can not afford the unit and must leave. By not doing so sooner they have intentionally taken advantage of their landlord and for that reason alone deserve zero compassion. They have intentionally placed their landlord in this position to take advantage of him and for some reason others believe this deserves special consideration.

Their actions are clearly intentional and should be treated accordingly. Lesson one in business survival is do not get sucked into tenants personal lives. No pay, no stay.

1 Reply

Marcy Moyer

Realtor · Mountain View, CA · Member since 2017 · 120 posts · 108 votes

8y

The big problem I think that is missing from the discussion is how to have less risk for the landlord. We are in a period of high employment, high housing prices, and still low interest rates. Buying homes with low down payments is very popular on this site. When the market turned 10-12 years ago a lot of investors lost their homes. The tenants could not pay, the investors could not pay their many mortgages, and they lost their investments, and credit ratings. It is important to not only have a plan on how to deal with hardship cases, but any case where a tenant does not pay. Part of that plan is having enough money to cover the mortgage if the tenant does not pay for what ever reason. If you buy in an area with great cash flow but little appreciation don't count on being able to sell the property when the market drops. I have no idea when the next market correction will happen, but I hope the BiggerPockets family will have set things up that they are protected. There is no one size fits all Plan B, but I am a firm believer that paying off a mortgage and getting cash flow on fewer properties in high rental demand areas is a better strategy than having more properties and higher debt in riskier neighborhoods.

2 Reply

Donald S.

Accountant · Saint Louis, MO · Member since 2017 · 409 posts · 362 votes

8y

@Thomas S. I love you man. Every time I get a little soft hearted I know I can find your posts and it grounds me back to reality. Everything that's been going on with these tenants ability to pay should have been taking place months ago, when they went to a veterans org to get rent help, not scrambling now that the rent help is over. If I'm boiling water I don't wait for it to start boiling over to do something about it.

0 Reply

Amy Webber

Investor · Simpsonville, SC · Member since 2016 · 135 posts · 73 votes

8y

I commend you for looking for options. You can't pay their bills for them but pointing them to resources that might be able to help them is a good thing. In SC there are aging and omsbudsman services that are coordinated via regional government agencies. They may not have a direct program to assist but a referral from them can often help smooth the process for families seeking assistance. I looked up San Diego and the Omsbudman services are offered out of this group - They will be wired into the local services and should be able to help you point your tenants in the right direction.

FYI - I would only make the initial call to ask if this is the right place to have your tenants start. From there I would leave it up to them to call etc. - there will be a lot of personal questions that the tenants will need to answer and you do not need nor want to be in the middle.

https://www.sandiegocounty.gov/content/sdc/hhsa/programs/ais.html

Good luck!

3 Reply

Guy Yoes

Rental Property Investor · Springfield, MO · Member since 2017 · 266 posts · 312 votes

8y

Good posts here. I have a suggestion that may work for both parties. If they can afford the utilities and food, Take out an insurance policy on both of them. Have them make the premium payments to you and you keep the policy active. Let's say 25K or whatever would cover the rent for two years for the policy and you are the beneficiary. They may only have a few years or months left. When one dies you get paid and the other can stay. When they go to join the other, you will get another check to cover any other costs. It costs you more now, but you may come out better in the long run.

Just a suggestion as a solution to your problem. You get to feel good about helping them and they can make good to you when they are gone.

7 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

8y

@Guy Yoes and to tag on to your awesome creative idea.. then take the policy and sell it for cash to those that buy life settlements !!!

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Jorge Pereira

Kensington, MD · Member since 2017 · 29 posts · 11 votes

8y

Terrible situation but you must follow the lease or you place yourself in legal trouble

0 Reply

Guy Yoes

Rental Property Investor · Springfield, MO · Member since 2017 · 266 posts · 312 votes

8y

@Jay Hinrichs

Thanks for the add on Jay. I too have a soft heart at times, but business is business.

0 Reply

Amy Webber

Investor · Simpsonville, SC · Member since 2016 · 135 posts · 73 votes

8y

@Marc Winter is right - I forgot to add to my above post that many of the agencies or charities do not assist until there is notice served.

3 Reply

Steve Vaughan

Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes

8y

The life insurance investment I think is called a viatical. It is a thing for the terminally ill.

Here I would serve them notice. With the 3-day (here) notice they can reach out to homeless prevention programs which are well-funded and immediate.

They may qualify for ongoing help like with HEN or TANF or other programs. I have a social services list I provide as well. With the notice and ss list, the ball is in their court and you can rest easy knowing you did what you could.

Because all hand-up worthy folks get the same treatment, I'm an 'equal opportunity offender' and not getting in trouble.

Turds get the notice, but not the encouragement or the ss list. Tough situation @Jo Zhou

2 Reply

Account Closed

Specialist · Paradise Valley, AZ · Member since 2018 · 3k+ posts · 2k+ votes

8y

Originally posted by @Jay Hinrichs:

@Guy Yoes and to tag on to your awesome creative idea.. then take the policy and sell it for cash to those that buy life settlements !!!

That is what I call a "creative Alternative". However, I've been told that Insurance Companies don't issue policies on people in their mid 70's for obvious reasons. These people are apparently in their "mid 70's".

0 Reply

Lois S.

Investor · Brentwood, CA · Member since 2013 · 195 posts · 52 votes

8y

@Jo Zhou You've gotten some good advice here.

In past, I've sent tenants to Catholic Charities. If they have funds available, they may help out with rent for tenant with an eviction notice.

I did a quick Google search and came up with several options.

http://sandiego.networkofcare.org might be one place to start if you want to research agencies to help out.

2 Reply

Guy Yoes

Rental Property Investor · Springfield, MO · Member since 2017 · 266 posts · 312 votes

8y

@Account Closed You have a point, Mike, thanks for the comment. I do see some ads for Colonial Life that say they take anyone and no medical exam necessary. I would suspect the amount of the policy and the premiums would vary depending on ages. I hope Jo can work it out.

1 Reply

Idris Lawal

Chicago, IL · Member since 2018 · 47 posts · 2 votes

8y

Could you rent that unit out on Section 8?

0 Reply

Michaela G.

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

8y

You're in California, which is very pro-tenant. How long would an eviction take?

Media is also very pro tenant, so, maybe you, as the landlord, could find some journalists that write a lot about tenants and tell them about this situation. Let them know that you can't let them stay for free because you'll have your mortgage to pay, but that feel bad about them and would love to be able to help them.

So, if that goes out on the news, I bet someone would start a go fund me page and people will feel sorry and start donating $ 5 or 10 and that might add up to enough for several months rent.

If you're the one initiating the contact with the media, that might give them an interesting angle to highlight, that is normally not done.

Just a thought.

4 Reply

Joel OwensBusiness Member

Moderator

Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes

8y

How much equity do you have in the property? I have many CA clients who are only getting a 3% return on equity. The equity is not working much for them. They have to decide if they want low cash flow and wait for the next down and upturn when equity likely moves higher again. For CA that could be another 7 to 10 years for a complete cycle top to bottom. They can double that or better with other assets.

You could try to refi out your equity to 75% LTV and hold the CA property if that is the goal long term. If you 1031 exchange you can buy more passive commercial assets where you do not usually deal with these types of issues. To complete an effective 1031 exchange takes proper planning.

I have many clients that owned residential, hotels, businesses,etc. and are now up in years and want to be more passive in nature. After awhile people get tired or BEING the business/active with an asset and want passive and relaxation.

I do not focus on residential anymore. I enjoy commercial tenants with businesses. They tend to have ongoing sales and cash flow daily and they keep up the building and what it looks like on the inside for customers. No asset class is perfect but I just did not want to spend decades of my life owning residential assets dealing with tenants,toilets, and termites. Those years of life roll by fast and I want to enjoy them as stress free and as happy as possible. That becomes difficult to do with constantly hearing BS from people's life issues. I have seen residential investors after 20 years or 30 years doing it and the deep lines on their face,stress, and many have had a heart attack or stroke. It can take a lot out of you owning those types of properties.

Some on here will say they love residential and it does not stress them out etc. I guess some find it enjoyable and it takes a certain personality. If you have scale with residential hundreds to thousands of units they usually you can build in layers of people and scale to have them handle the day to day grind of constant issues from tenants.

I just would not want to have to choose my choice of giving up my soul and humanity for the almighty dollar. That is a price that is too high to pay for my values.

Good luck.

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Tiffany ChandlerPro Member

Southbay, CA · Member since 2015 · 38 posts · 18 votes

8y

California is indeed a pro tenant state. Others have already offered recommendations regarding your legal/land lording options. If you serve them the 3 day pay or quit they may be able to receive homeless prevention funds from supportive services for Veteran families (SSVF) agencies. If qualified, they may provide you the rent for up to 6-9 months, of course that's up to you if you allow that much time. They will receive case management from the agency which will include assisting them find another place and/or determining if they can continue to live independently. This is a prime example of being able to give back... you will continue to receive payments and their basic needs will be met as well. Feel free to messaged me if I can be of further assistance.

http://sandiego.networkofcare.org/veterans/service...

2 Reply

An old couple in difficulty and cannot pay rent, what could I do?

An old couple in difficulty and cannot pay rent, what could I do?

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