BiggerPockets Founder · HI · Member since 2008 · 16k+ posts · 5k+ votes
I just finished reading one of the most incredible and shocking articles for the real estate investing industry. It is about a "professional tenant" (read: dirtbag) who may just be the worst there is.
If you are a current landlord or are thinking about it, please take the 5-10 minutes it'll take you to read this article.
We've had many great posts on our blog and the forums about how to deal with tenants set on ripping you off, but I think we must discuss this particular case.
Be sure to read the comments below the article as well . . . (most disturbing, IMO)
Residential Lender · Irvine, CA · Member since 2011 · 56 posts · 34 votes
15y
Wow, that's pretty scary. I hope other would-be professional tenants don't get any ideas. One way to defend yourself against the "deplorable conditions" issue is to photograph your unit before the tenant moves in and have them sign off on a document that everything is in working order.
Real Estate Professional · Park Ridge, NJ · Member since 2014 · 42 posts · 6 votes
12y
2 sad items regarding this article:
He tried to sue the paper to block publishing of this article (chalk one up for the 1st amendment)
Landlords who deny him an apartment could get tied up in court even though there is cause; only because of some frivolous form of nonsense (and, on that, he could possibly win, too).
Rental Property Investor · Toronto, Canada · Member since 2014 · 37 posts · 8 votes
11y
Sounds as bad as a tenant I had! My former tenant was actually a friend, so I made the big mistake of cutting him a great deal and relaxing my standards. He stopped paying rent after the first month, saying he would pay it all back the next month. Then at the end of the next month, he had a mental breakdown, got fairly intoxicated, and harassed and insulted me. I had to call the police, who sent him to a hospital, but he was released after fewer than 2 hours. He actually said he would move out the month after but changed his mind after another week, asking for a few more months due to being broke. I agreed to 2 more months, but then he kept periodically insulting and harassing me and refusing to make progress in moving out or paying rent. In addition, he also kept threatening to sue me for hundreds of thousands of dollars, then a million dollars, then a billion dollars in 2 lawsuits. He never said what kind of lawsuits. He was usually incoherent and drunk. But I suspect it was for personal injury because he fell and injured himself once when he was alone in the apartment, and drunk and feeling dizzy. I finally filed for eviction a little more than 3 months after the mental breakdown incident. He finally sobered up and moved out a month later and has been slowly paying me for back rent. I just hope he continues paying the back rent and I won't have to file another lawsuit to collect the back rent. I am also relieved that he finally got out. I will screen EVERY prospective tenant thoroughly in the future and avoid renting to friends.
Oh, and that former tenant also trashed my place, although no structural damage, and he did clean it up significantly before moving out. He still left behind a significant fruit fly and roach infestation that took me a month to eradicate! And I had to throw away a lot of trash he had left behind, in addition to cleaning down the place very thoroughly multiple times.
Investor · Tampa, FL · Member since 2013 · 2k+ posts · 1k+ votes
11y
I remember when this came out. He's not the only one. I have to see if I can ask a few of the bigger Landlords who have created a watch list of Professional Tenants not to rent to. I can't promise it but I can ask if they'll give it to me for this area.
Real Estate Investor · Greenville, SC · Member since 2014 · 76 posts · 23 votes
11y
Lesson: MUST screen tenants thoroughly! And take pictures of property at time of leasing! And network with other landlords in the area! And have a good lawyer on your side! And not fall for any sweet-talking, suit-wearing con artists!
Las Cruces, NM · Member since 2014 · 16 posts · 6 votes
11y
I can't even begin to explain how angry this article made me! What a.....squatter! To make it worse the whole darn family is in on it and he's just raising more hell hound tenants for when he dies off!
Attorney · Austin, TX · Member since 2014 · 1k+ posts · 932 votes
11y
Flexing strong judicial muscles scares off these kinds of people. They want to make your life difficult, so turn it back on them. It takes being proactive in planning out a strategy ahead of time and preparing yourself for the worst case scenario, kind of like insurance.
There are generally only two kinds of scenarios. If you file suit, look for a Statute or Procedural rule allowing for an expedited action; if you have suit filed against you, make the case complex for them and with potential negative consequences such as highly $$ counter-claims.
In Texas, Rule 169 of the Texas Rules of Civil Procedure which provides for a trial within 9 months or sooner. If like the Defendant here, the tenant attempts to make any affirmative claims for harassment or the like, you should file a Motion to Dismiss (in Texas under Rule 91a) and thereafter take advantage of all of your discovery measures. Failure to answer discovery requests are deemed admissions. Even if they do answer, you're still making them work more than they likely want to, and in any even you're dragging them into deep waters where their pro-se skills will lead them to drown.
As far as counter claims, you will almost always have the option to claim it is a frivolous lawsuit, that the Plaintiff has breached covenants by filing suit or not otherwise adhering to the lease agreement, etc. You may not prevail on most, or any, of these, but to a pro-se Plaintiff it might be enough to scare them off.
As far as complexity, you may want to run your business out of an out-of-state LLC. I like the Nevada LLC to run any ventures that look like they might end up in litigation. All the contracts flow through that Nevada company even when contracting business in Texas. The reason?? I can likely get the case removed to Federal Court. I haven't ever met a pro-se party that wanted to deal with intricate rules and harsh punishments associated with the Federal Court system.
Contractor · Richmond, VA · Member since 2015 · 3 posts · 2 votes
11y
Just starting out, reading this scares the scrap out of me. A tenant like this could put a newer investor, without the resources needed to defend, out of business.
Is there a way to protect yourself from this...assuming you do your homework and everything looks good, but, once they get in....is there anything you can put in the leases to protect yourself?
Real Estate Investor · Cypress, TX · Member since 2015 · 41 posts · 26 votes
11y
I always say that you can hate your job or love your job but you live where you want to live. If you want to live in New Jersey, California, New York or whatever but what ever reason you have but if you want to get rich you need to live it is cheap to be rich and that would be Houston Texas. This is the thing. In Texas there is no defense to not paying rent other than to pay the rent. The judge asks 3 questions. Do you have a lease, how much does it say the rent is, did they pay. If the answer to question 3 is no the judge sends the constable over to take their stuff out...that is it. Why would anybody want to live where this is not the law? I guess you guys are just comic relief for us here in Texas.
There are more reasons that dictate someone's decision to reside in a particular state than just those that are financially related.
I agree. That is why I say you live where you want to live. But if you want to be a fisherman it is hard if you don't live by the water or if you want to be a farmer it is really hard if you want to do it while you live in a city and if you want to be rich you should live where it is cheap to be rich. If you want to be rich you should move closer to the food.
Real Estate Consultant · Bloomfield, NJ · Member since 2010 · 2k+ posts · 1k+ votes
11y
My thinking is that you can be rich anywhere in the USA. NJ included. Perhaps easier in some places than others. But hard work is a required ethic for getting and stating wealthy.
Eutawville, SC · Member since 2015 · 13 posts · 1 vote
11y
I'm going through something like that, although my tenants just moved out they were intentionally sabotaging my house to make it look like I was a bad land lord and lying that I knew about the problems and didn't want to fix things. In order to try to live in my home for free. I have receipts of any and all repairs, but this day and time it seems like the courts believe the bad tenants more, that's a shame.
Investor · Saint Johns, FL · Member since 2015 · 141 posts · 100 votes
11y
Our legal system is screwed up, letting people do thing like this. I guess my bad tenant experience was a 'walk in the park' compared to horror stories people have...
What angered me the most was that there are legal organizations and actual lawyers are out there who educate bad tenants how to fight evictions and work the system. I am having a court hearing on the 20th following an eviction proceeding where my ex-tenants moved our before eviction trial. I am already getting ready to be amazed by our great legal system again...;)
I remember when this came out. He's not the only one. I have to see if I can ask a few of the bigger Landlords who have created a watch list of Professional Tenants not to rent to. I can't promise it but I can ask if they'll give it to me for this area.
No official list unfortunately. Most of them use services like National Tenant Network and run the full background and court checks to see if anything has been filed. There are a few tenants, like who I believe this article was about, that are mentioned at larger meetings but nothing official on paper.
No official list unfortunately. Most of them use services like National Tenant Network and run the full background and court checks to see if anything has been filed. There are a few tenants, like who I believe this article was about, that are mentioned at larger meetings but nothing official on paper.
Thank you for following up @Darren. No easy way - we will just have to get those solid processes in place. This thread is like a crash course.
Investor · Beaconsfield, Montréal · Member since 2015 · 13 posts · 5 votes
11y
This is an incredible story, I have one but not exactly this bad.
Correct me where I am wrong, all the rent he has not paid can be considered a taxable benefit under IRS rules. Not claiming that taxable benefit and not paying the IRS their due is more than enough to keep him in court. He has used abusive justice tactic to get out of not paying for lodgings.
He knows the law mostly as it applies to tenant issues and civil issues and procedure in lower courts.
To defend in Tax court you need to have a lawyer(if I am not mistaken-ed)
The IRS got Capone, it may be the best recourse in this instance for societal justice.
We all pay our taxes and when we have no revenue there are no taxes to pay, the IRS never got it share from this guy!
Rental Property Investor · Hollywood, FL · Member since 2015 · 74 posts · 38 votes
11y
I'm almost afraid to say anything bad about this guy. He might find my post and sue me. That said, in my unprofessional opinion, he's a true sociopath...maybe even a borderline psychopath (minus the violence). No remorse or shame from the pain and suffering he's caused.
Investor · Fort Worth, TX · Member since 2015 · 109 posts · 41 votes
11y
Regarding Mark Fotzpatricks quote :
"This kind of stuff is a good reason to network with other investors in your area. The area where I invest has a private Yahoo forum where landlords can ask other landlords about certain tenants and alert others about deadbeats and troublemakers. It's a good system that saves us all a lot of grief and helps keep trouble out of our neighborhoods. The local police department is also involved in the online discussion because they know that keeping out deadbeat troublemakers reduces crime."
I am wondering if anybody in Tarrant County Texas is interested in doing something like this.