New landlord, problems already, need help!

General Landlording & Rental Properties
14yFollow

New landlord, problems already, need help!

Tatyana E.
CA · Member since 2011 · 39 posts · 5 votes

Hi guys, I’m new here and I hope so much you'll be able to help me.

I got a rental house recently (paid $180K) and hired a property manager, let’s name her K., to manage it. K. runs a small property management company with only one employee – herself. It was a “hand shake” deal, no papers were signed but I have a bunch of e-mails where we discussed our deal. Fees for finding the tenants were supposed to be $400 and monthly property management fee was $85 and I was supposed to get rent from K. on 10-12th each month directly to my bank account.

K. didn’t do a good job in marketing the house but probably it doesn’t matter at this point. She found potential customers – boyfriend and girlfriend and their 2 children moving in together from different households.

We asked $1700 in rent for the house and they met 3 times rent income requirement. Both had poor credit though, with no mortgages/houses ever, he had child support issues and she had a few small bills like smud bill unpaid. Also, there was problem with ex-landlords telephone numbers –they didn’t want to give them out to Ann, then they gave fake/non-working numbers. But supposedly finally they gave “right” numbers and K. verified them and was satisfied with the info.

When it came to moving into the house they couldn’t come up with the money... and K. took $600 non-refundable deposit to hold the house for them. I was not happy with all this at all and I e-mailed K. and let her know I do not think taking deposit was a good idea and that we should rent the house out to the couple – simply because they don’t have the money and they don’t have any source to get the money should they need it. In my opinion they were “screaming” potential problems.

Next thing I learn is K. rented the house to the couple. Several times I asked her to mail/e-mail me the lease agreement and K. says sure and “keeps forgetting” it.

Now it’s mid October and no rent and obviously it’s not coming I have hard time getting hold of K. And when I talked to K. last it was something like they told her they mailed the check, then they "forgot" and would mail it tomorrow and then again tomorrow etc. Since I live 3 minutes away from the house I suggested a few times just to go and get the check, and after that K. told me she would contact tenants and… disappeared.

What I have now is Grand Deed for the house and a bunch of e-mails somehow confirming that K. was (is?) managing it. I do not have tenants names or lease agreement and I’m obviously failing to get it from K. Looks like I can’t even post 3-days late rent notice because I don’t know their names.

My co-workers provided me with landlord attorney’s telephone number but he charges $200 for just consultation and then $700+ for eviction. Shall I go to attorney and pay or shall I try to talk to tenants (I don’t have their numbers but I can go to the house… in hope that they will open the door and talk to me).

Anyway, I would very much appreciate if you could advice what shall I do and thank you so very much in advance!

1Reply
67 views

Most Popular Reply

Ibrahim Hughes
Real Estate Consultant · Bloomfield, NJ · Member since 2010 · 2k+ posts · 1k+ votes
14y

Remove K IMMEDIATELY from the job via email and certified letter. Send certified letter to tenants letting them know that all communication, monies, etc. should go through you. Continue eviction if you don't receive rent PLUS $500 pet deposit.

Your tenants aren't trained. So you have to get control of the situation, train them and give the tenants the impression that you are strict but fair. Pay or get out. Best done face to face so as to get their respect.

Consult an attorney asap.

12Reply
See this reply in the discussion

102 Replies

Jump to latestLatest
  • Jon Holdman
    Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    14y

    Is this house local? You say "I can go to the house". I'd fire K and take over management myself. Managing one house, if its reasonably close, isn't that hard. And, managing a manager can be just as hard as managing a tenant.

    Nobody gets in my house without the full deposit and one full month's rent. In cash or MO. So, yes, this was screaming problems right from the start.

    Are tenants so hard to come by that this is the best you can do?

    If K a licensed RE agent? I believe property managers must be licensed in CA.

    Paying an attorney is just part of the business of being a landlord. You may well have to suck it up and pay for this attorney. And, if someone has moved in, then you will have to evict them. Your lost rent is going to be much more than the $700 you'll pay an attorney.

    Suing K may be a way to recover some of your losses.

    Do be aware that if you've paid $180K for this house and expect to get rent of $1,700 that you will be cash flow negative, unless you have a lot of cash into this deal already. Some months you'll be OK, if you have a tenant in there are are only paying out PITI plus the PM. But other months you'll have BS like this and have to come out of pocket. Sorry.

    4Reply
  • Tatyana E.
    OP
    CA · Member since 2011 · 39 posts · 5 votes
    14y

    Thank you very much for so quick reply!

    Yes, the house is local, and I agree I need to "fire" K. But how can I do this if it was "shake hands" deal and she doesn't answer my calls or e-mails? Just e-mail her informing her she is fired?

    I checked her out and looks like she runs the "private company" under religious organizations codes (SIC code 8661 and NAICS code 813110, not paying taxes?). I didn't find any license and I failed to figure out whether she has a broker (I believe not).

    Initially tenants were going to move in with a dog but they failed to find $500 pet deposit. So supposedely they moved into the house without a dog.

    I was at the house 5 minuts ago, there was only the tenant's daughter who opened the door... the dog was barking behind her.If I somehow get a lease will I be able to use it in eviction process?

    I gave the tenant's daughter my telephone numbers and asked her to tell her mother to call me. We'll see whether I get the call.

    I don't mind paying attorney fees,I understand that. If I pay for consultation now $200 and later for the eviction - it will come up to $1000, and it will add up to my losses. So I'm trying to torture you, guys, for the information :oops: :D

    And I did pay cash for the house and I do not have any mortgage.But I have some other serious expenses - like my elderly mother from abroad with no retirement who lives on her own in another house.

    I had to invest the money so I could support my mother and I decided buying a rental was the best deal.Time will tell.

    So far I'm getting extra cash from HELOC of my house but I don't want to go too far with it, and I'd better resolve the issue with the house fast.

    I don't know whether tenants are hard to come by or not - it was K. who handled calls, showings and screening and I failed to get much information out of her on this. Probably I had to fire her then...

    Once again, THANK YOU for your help!

    0Reply
  • Mitch Kronowit
    SFR Investor · Orange County, CA · Member since 2009 · 1k+ posts · 1k+ votes
    14y
    Originally posted by Tatyana E.:
    K. runs a small property management company with only one employee – herself. It was a “hand shake” deal, no papers were signed...

    Mistake #1. You are trusting somebody with your $180,000 investment? Sign a CONTRACT.

    Mistake #2. The questions on a rental application aren't necessarily difficult, unless you're trying to hide something. Lie on the app? Good bye!

    BTW, who is Ann? Did you just slip and give us K's name? :wink:

    Mistake #3. K should have been fired as your PM by now.

    Not really a mistake, yet, but you need to speak with an attorney about this. You have an unlicensed property manager who has completely lost control of your investment.

    5Reply
  • Tatyana E.
    OP
    CA · Member since 2011 · 39 posts · 5 votes
    14y

    Thank you so much for your reply!!! No doubt you are 100% right, and trust me, I am learning... unfortunately from my own mistakes...

    Ann wasn't a real name either, I just decided that K.is even less personal :D

    K. called me and e-mailed me the proof of 3-days rent pay or quit.At least now I know tenants names. And she promised to e-mail me the lease agreement and is ready to proceed with lease termination and eviction process.It would be great since in my opinion she created this mess and I would appreciate if she cleans it up.

    But this time I'm going to keep everything under my control and once tenants are moved out I'll do everything on my own. No more property managers, Done with it.

    The tenant called me and told me she mailed the cashiers check to K. on the 1st of the month but her bank would take 10 days to cash the check :roll: and now she is ready to give K. another cashiers check on Friday (in 2 days :roll: ). I asked whether she could show me the slip of the cashiers check or any other proof there was a check on the 1st of the month... nope,

    There were also other issues, and the tenant sounded rather rude and mean.She claimed that K. charged her double rent since they moved in in the middle of the month. She was referring to the deposit they put to hold the house, and during this time the house was off the market (and it was). However she claimed the house was on the market and she has a printout with a date.Maybe one of the websites like www.apartmenthunterz.com who use updated information without property owner's knowledge? I asked her to meet with me and show me the printout so that we could resolve the issues - nope, she isn't doing it. Oh well...

    I talked to K., and we decided we will wait 2 more days, try to get rent if possible and then serve the lease termination notice (we have month to month lease) and get ready for eviction. It may minimize my losses... maybe.

    Any thoughts?

    0Reply
  • Ibrahim Hughes
    Real Estate Consultant · Bloomfield, NJ · Member since 2010 · 2k+ posts · 1k+ votes
    14y

    Remove K IMMEDIATELY from the job via email and certified letter. Send certified letter to tenants letting them know that all communication, monies, etc. should go through you. Continue eviction if you don't receive rent PLUS $500 pet deposit.

    Your tenants aren't trained. So you have to get control of the situation, train them and give the tenants the impression that you are strict but fair. Pay or get out. Best done face to face so as to get their respect.

    Consult an attorney asap.

    12Reply
  • Joe O
    Investor · Las Vegas, NV · Member since 2011 · 92 posts · 25 votes
    14y

    At this point I don't think you can trust what K or the tenants are saying.

    I think you will make more money (or rather lose less, same difference) firing K right now, proceeding with talking to your lawyer and paying $1,000 for the eviction.

    I know it's tempting to have K do it, as it's her mess, but clearly she isn't responsible. Time to take matters into your own hands, and put it on someone who is responsible, a good lawyer.

    If your rent is $1700/month, if K/tenants drag this out more than 3 weeks you're losing money. Pay the $1K now, evict them yourself. Then get it rented ASAP. That extra month's rent you get from the new tenants by not having this dragged out will pay for the lawyer's services.

    Good luck! Sorry for the rough first experience.

    Standard disclaimer: this is not legal advice. Even if it were, you shouldn't take legal advice from strangers on the internet. Go talk to a lawyer. Now. :)

    0Reply
  • Mike G.
    Rehabber / Flipper · Simi Valley, CA · Member since 2010 · 597 posts · 259 votes
    14y

    It's possible K is trying to scam you. Is she licensed? Did she have any references, and did you verify them? Maybe she is receiving checks and not sending you the money. Probably not, though, it sounds like the tenant is just not paying. But keep your eyes open here.

    In any case, I agree with Ibrahim. K has already provided ample evidence of lack of competence, AND she is not effectively communicating with you. Do you really want her handling anything moving forward?

    0Reply
  • Jon Holdman
    Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    14y

    I voted for Ibrahim, too. His advice is spot on. You can't verify K's license. She shouldn't be managing properties if you can't. PM's might clean up messes like this, but they will charge you for it. Sometimes people who look good turn out to be problematic.

    $85 a month is dirt cheap for a PM. That's another clue you have a problem. A more reasonable rate is 10% of collected rents, plus half to a full month to fill a vacancy.

    I make my deposits just under the rent (helps with avoiding confusing the deposit with the last months rent) and if they want me to hold it, they pay that full amount.

    I really recommend you spend some time reading in the Rental Property and Landlording issues forum. You need a crash course since you now have so much cash invested. I would honestly recommend selling, but that will create a large loss for you because of the costs of selling. If you can get a grip on the ugly reality of this business and manage this yourself, and then hold on for a few years, perhaps you can get out without a loss. Managing properties isn't actually too difficult and is not very time consuming if you get a good tenant and get them used to paying the rent on time. Finding a good tenant is the hard part.

    1Reply
  • Ed O.
    Investor · Statewide, MO · Member since 2011 · 813 posts · 424 votes
    14y

    Yikes. I'd set a fire under K. She's likely in violation of some re laws, especially if she's doesn't hold a license.
    See if you can get her to have the tenants removed. Don't take her word on anything tho. How did you find her? Sounds like a recipe for disaster.
    Tenant screening is so critical and a poor tenant out of the gate will sting bad. We all have made a ton of mistakes, so don't feel too bad about it.
    With all that said, begin the eviction immediately. Also, try offering the tenant $500 to move - cash for keys. Give them the money when they move out by an agreed upon date. It's cheaper and faster than a full blown eviction.

    0Reply
  • Tatyana E.
    OP
    CA · Member since 2011 · 39 posts · 5 votes
    14y

    Thank you so much for all your replies. I feel you are all sooooo right :cry: but I'm just too exhausted now and I'll sleep on it before taking any decision.As Scarlett said "I'll not think about it today, I'll think about it tomorrow" :D . But looks like the decision is going to be a tough one....

    How I found K. Her husband, let's call him D., was my real estate agent. I had 5 real estate agents before I found D. and in the beginning I thought I was a excellent customer with tons of cash looking for 2 houses 200K+ each, all cash.... Wrong! :D . 5 realtors were doing poor job, so someone from work recommended me D, and I was very sceptical about him.(and I was working with 2 more realtors before buying my property, so I had experience).

    D. was even more perfect that I could ever dream of :D . We worked together for almost a year, 6 offers, 5 short sales - everything was better than perfect. I really couldn't believe D. was real - he was so quick, efficient, organized, knowledgable, punctual, professional,hardworking, I can probably find another 100 words to describe him and I can tell you quite a few "stories" when D. went way above and beyond just to get the results I wanted. And the only thing that sometimes hurt me in D. was that he is soooooooooo honest and he wouldn't do anything which doesn't comply to his moral values, His honor is just huge, and I certainly respect it a lot.I live in so called "depressed" area in CA, and I had cash on top of everything else (credit score, job, etc.) and I had NIGHTMARES for a year I was going through the real estate process that D. could leave me and I'd have to again deal with slow, lazy and unprofessional real estate agents.

    K. is D.'s wife of 25+ years, they have 4 kids and are still totally in love with each other.And we all are of the same age. And I have tons in common with K., and I really liked her personality.

    My mistake - I assumed that if husband's work standards are extremely high, his wife's standards are also high, and it took me a while to figure out I was wrong.

    0Reply
  • Tatyana E.
    OP
    CA · Member since 2011 · 39 posts · 5 votes
    14y

    $85 PM fee is a standard fee for the area and all big PM companies charge this amount (some charge $75).

    As for getting tenants, you are right, and big PM companies like HomePointe etc. usually charge half a rent - in my case it would be $850. I paid K. $400 but I did all marketing myself - photos, text, ads on tons of websites etc., and it cost me probably another $200 on top of my time and work.

    0Reply
  • Tatyana E.
    OP
    CA · Member since 2011 · 39 posts · 5 votes
    14y

    I'm very much interested in details of the idea "cash for keys", and certainly I'd pay $500 and even more to get the house back in good condition.

    The problem is that as I found out it would cost me lots of money to fix the house if I need it.

    The house itself was built in 2008, 2200+ sq.feet, 3 bedrooms with loft, and I got it in immaculate condition. The previous owners paid over $450K (in 2008) for it, so I got a deal by paying cash, short sale etc.(a steal?)

    However it is a 2-story loft, very tall ceilings (10" everywhere and probably 20" with loft). I got a quote with another house with the same floor plan - just to paint the house would be at least 5K because of special equipment needed. Carpets are new but they are almost everywhere... 2200 sq.f of floors with stairs...I was told it doesn't make sense to replace carpets in rental and it's better to go with cheap laminate, The best quote I got from contractors was over 5K - many stairs on top of square footage.

    Beatiful cherry custom-built cabinets in the kitchen and all bathrooms (previous owner paid for extras) - I would probably be upset if they get damaged.

    And I paid over 2K for backyard landscaping (on top of 180K) - I really hope the backyard is taken care of.

    My question is how to get the tenants out without them trashing the house?

    Let's say I agree they move out in a month, and I give them $XXX cash. What if they do not move out (and I do suspect they won't)? I'd be losing a month in rent and time to go ahead in eviction, right?

    0Reply
  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    14y

    I don't care what other companies say they charge in your area.That is cheap especially in California where gas is very high and cost of living.

    We get 10% down here in Georgia easily and gas is cheaper and cost of living is much cheaper and margins are already slim structured that way.

    With that kind of money you had I would have went after apartments instead of a house or 2 but that's a moot point.

    I do know California in some areas has very friendly tenant laws that are not in favor of the landlord.I am surprised you did not research this more before purchasing as to eviction time lines.

    You can pay an attorney but they are extremely expensive.I saw an attorney in eviction court lose his case for his client and the tenant got another month of free rent.Just because they are an attorney doesn't mean they are competent.

    If you must pay an attorney you bombard them with questions and write down the answers and learn the process so that next time you can file for yourself and save your money.

    The question is how much do you make per hour with your business or job?? If you make more than what you can pay an eviction company (they are much cheaper than an attorney) then you should let someone else handle it.

    If you have free time or could save more money doing it yourself then go ahead.

    I wouldn't let (K) do squat with an eviction filing.This person sounds like they have screwed up a bunch of things already.If they screw up the eviction filing it could delay getting the people out that much longer as you have to unravel the mistakes.

    Right now it sounds like you have a dog with a tenant that is trashing the place you just bought.

    I take a lot of time with my applicants for my apartments.The property manager screens them and then if they pass credit and criminal then I set up a time to talk with them.

    If I feel satisfied with the answers they give then we move forward.

    I am sorry this has happened to you but when people make fast decisions without thinking it through or gaining knowledge this is what happens.

    I don't care if it's an agreement for your mother to rent the place "get it in writing period". Business is business.

    Podcast Guest on Show #47
    NNN Invest53 Reviews
    WebsiteView Page
    0Reply
  • Tatyana E.
    OP
    CA · Member since 2011 · 39 posts · 5 votes
    14y

    Thank you! I live in a "depressed" area, and prices for gas and RE and food and living etc. are much lower than in Orange county or Bay area etc. California is HUGE, trust me on that.Today I paid around 3.50/gallon for gas, it is high?

    The problem is that I have a very busy lifestyle and have close to none free time and it's extremely difficult for me to take any time off work (to go to a court for eviction, to meet with attorney etc.). And time after work is usually very busy, too. And my salary is not high at all, I barely make ends meet and cover the rest of expenses with HELOC (and still own all this houses and look *wealthy* on paper, LOL).

    But I feel very lucky to have a job in this economy in this area.

    And I did my research - with 200K how can one support a 75 y.o. till the rest of her life? Paying cash for everything would just "eat" the money fast.. and then what? My worst nightmare is living together with my mom.

    Stocks/bonds looked too risky for me and I wasn't familiar with them. MMs and CDs pay around 1% a year ($200 a month? My mom's house HOA are higher than that).I don't think I had too many choices, so buying a rental and hiring a professional to manage it and deal with all stress and me just watching money pouring into my bank account sounded like a wonderful idea to me, LOL.

    0Reply
  • Ann Bellamy
    Lender · Tyngsboro, MA · Member since 2009 · 3k+ posts · 2k+ votes
    14y

    I agree with Ibrahim, Jon, and everyone else. Get rid of K immediately. I wouldn't have her "clean up the mess" because she is likely to cost you far more in lost rent and time by doing it wrong than she'll save you. You are also giving her more opportunity to pocket any rent that may have beeb sent. If D is awesome, clearly his wife isn't. Cut the cord now to cut your losses.

    In your case, with a nice home and bad tenants, I'd try the "cash for keys" route. don't give them a month to move out. Give them 5 days, a week, maybe 2 max, and make the offer sweet enough that they will bite. Tell them they get the cash only when they are out of the house with no major damage, and then meet them, inspect the house, and pay them. Make sure they sign that they are leaving voluntarily before you give them the cash. Have your attorney look at this document. The longer they stay, the more you are losing money.

    Bite the bullet, get rid of K and regain control of your property. A bad tenant is WAY more expensive than no tenant. Any experienced landlord will agree with that.

    Sorry to chime in with advice you don't want to hear, but unfortunately everyone telling you to get rid of K is on the money.

    2Reply
  • Christopher Keivit
    Real Estate Investor · Chicago, IL · Member since 2011 · 54 posts · 14 votes
    14y

    Hi Tatyana - sorry to hear about such a bad experience. One option you can do is check with the California Real Estate Board and search for info on K. It should show if she is licensed and any disciplinary actions. Also check her husband. If they are on there, you could file a complaint through them.

    As for "cash for keys" I work for a management company that handles receiverships, and we deal with some pretty distressed properties. We do cash for keys frequently. Basically we tell the resident that, regardless of payment history, we will give them x amount of money (in one case, $500) if the unit is in good condition and they move out by a certain date. You must have the keys in hand before they get the money. If they are not out, then we proceed with eviction.

    Yes, it will cost you, but it gets rid of a problem. Get rid of K., get rid of D., and get rid of the tenants!! Good luck

    0Reply
  • Joe O
    Investor · Las Vegas, NV · Member since 2011 · 92 posts · 25 votes
    14y

    K is not returning your calls or emails. Have you approached the husband - your former Realtor - about the problem?

    0Reply
  • Bienes Raices
    Orlando, FL · Member since 2009 · 2k+ posts · 282 votes
    14y

    It's a bit strange the D. is such a competent realtor, but K. seems to be so negligent and incompetent. You would think that D would realize that his professional reputation could be hurt by K's behavior.

    In any case, just because someone is likeable or personable doesn't mean they are any good at what they purport to do.

    0Reply
  • Tatyana E.
    OP
    CA · Member since 2011 · 39 posts · 5 votes
    14y

    Thank you so very much, guys, I really do appreciate your help a lot and I find it just invaluable.

    And I am certainly ready to follow it.

    I'm trying to schedule a consultation with attorney ASAP (today) and I'll take time off work.

    Here are current problems.

    I still have no lease agreement from K. I e-mailed her requesting the agreement "today" 2 days ago and yesterday and told her on the phone - and I still do not have it. I believe I need to see an attorney before I take any further actions with K., right? Remember, the deal with tenants wasn't simple - they put a deposit to hold the house, they moved into the house 2 weeks later, they are complaining K. is charging them double rent and that they have proof the house was in the market when we had their deposit - and I don't have any papers on that. None.

    2. Tenants are paying rent tommorrow to K., then supposedely K. is going to transfer me the amount. Supposedely K. is charging 10% late rent ($170) on top of rent, according to her I'm supposed to get half of it (and I don't need it or want it at this point). So tommorrow supposedely the tenants are giving K. cashiers check for $1870. How can I stop it?

    Even if I take time off work now and mail a letter to tenants with certified mail they won't get it until it is late. And I don't have their phone numbers. Also, I probably have to get to attorney first and let him look through the letter. Right?

    K. doesn't have any license, D. has salesperson (not broker's) license and have nothing to do with K.'s business.

    And no, I didn't talk to D. - I talked to K. yesterday and she was very friendly and appologizing and ready to do everything and promised to e-mail me the lease.

    Also, I don't know how to word the e-mail to K. that she is fired, our "hand-shake" deal is over and that I need the documents (lease agreement etc.) ASAP. I assume this e-mail or letter can be used later in court by any of us, so I need to be careful with wording, right?

    Once again, HUGE thanks to all of you for sharing your knowledge and experience with me! You guys are really awesome!

    0Reply
  • Joe O
    Investor · Las Vegas, NV · Member since 2011 · 92 posts · 25 votes
    14y

    Can you go to the house and talk to the tenants and tell them all money needs to go through you, and get their phone numbers?

    0Reply
  • Jon Holdman
    Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    14y

    And, get rid of this house! I've been rightfully accused of being too focused on cash flow and neglecting the other advantages of owning rentals. But you clearly state cash flow is your goal:

    The bottom line is that you cannot support a 75 year old person with $200K. The rest of her life could easily be 20 or more years. At some point, you or others are going to have to help support her.

    Nevertheless, if you want to maximize the returns from the $200K, buying a terrible rental like this is not the way to do it. You paid $180K for $1700 a month in rent. That's not a good deal even by the classic "rent must be at least 1% of purchase price" rule of thumb. You describe it as "immaculate condition", "a 2-story loft, very tall ceilings ... just to paint the house would be at least 5K because of special equipment needed", "Carpets are new", "Beatiful cherry custom-built cabinets in the kitchen and all bathrooms", and "over 2K for backyard landscaping". It won't be in immaculate condition even after the first tenant, unless you're very lucky. Painting in between tenants is a given, though unless they really work at it they won't be able to cause much damage up high. Those fancy cabinets won't stay that way. Good luck with the landscaping. My tenants have killed everything I put in. No, they won't take care of it.

    "The previous owners paid over $450K (in 2008) for it, so I got a deal by paying cash, short sale etc.(a steal?)" No, the previous owners overpaid at the tail end of the bubble. You may have a deal, but you're much closer to retail price than they were. Given your description, you almost certainly paid just about retail for this house.

    Given your goal, and your mom's age, I would have seriously considered buying immediate annuities. For $200K, you would generate $1431 a month in income. If you manage that rental yourself you will net about $1,100 a month. That's 65% of the rent because you're earning the PM fees for yourself. Given you've paid cash, in many months you'll pocket the full $1700. But then other months you will pay the taxes, pay the insurance bill, pay for a painter or a new AC or a lawyer. If you keep this, you should accumulate that $1700 a month until you have a cash reserve of about $10K (six months rent.) Maybe you already have this. Then use $1,100 on your mom and accumulate what's left. If you give her the full $1,700 each month, you'll be out of pocket for anything that comes up.

    The downside to an annuity is that if mom dies tomorrow the money is gone. The rental property will still be there even after she dies. The upside is that if she lives to 100 she continues to get that $1431 a month. And there is zero management. Zero tenant or PM hassles. Zero big sudden bills. The rental is better for you, something like annuities is better for your mom.

    1Reply
  • Tatyana E.
    OP
    CA · Member since 2011 · 39 posts · 5 votes
    14y

    I called attorney, the earliest he can see me is on Oct.20th which is a week from now.

    If I fire K. immediately and she won't e-mail me the lease agreement, what are consequences for me? I have their names and nothing else. And I'm almost sure they are not going to cooperate with me and give me their copy.

    How can I word the letter stating I'm firing K. so that it won't hurt me in the court if it gets there?

    I have strong suspicion, and I have reasons for it, that K. didn't check the tenants credit report and that there is an eviction there already. That's why tenants are obviously not afraid of another one. I'm not sure but it is very possible. I assume I cannot check it.

    I'm going to make the last attempt to get lease agreement out of K by e-mailing her, and if it doesn't work I'll have to find another way to get it or work around it trying to clean up the mess.

    I view the house as both cash flow and - more important - long-term investment. Location, location, location, right? It is 5 min. from downtown of the capital of California and I do not have any doubts that in 10-15 years its price will be more than what I paid now.

    My mother lives very modestly, and with positive cash flow from the rental I have hopes to survive without getting in any debt. In the worst case scenario with around 600K equity in my houses I'll be able to use HELOC. So far I have a HELOC, I try not to use it and consider it my emergency fund.

    Sooooo I'm not selling the house, instead I'm going to learn to manage it myself. I'm a good learner but most probably I'll still cry from time to time on your, guys, shoulder, like I do now, LOL.

    0Reply
  • George P.
    Real Estate Investor · Baltimore, MD · Member since 2008 · 1k+ posts · 268 votes
    14y

    Looks like the tenants are a bunch of douchebags. What makes it worse is that they happily realized that you, the owner, are not in agreement with the PM. They realize that PM will be fired sooner or later, and you, the owner, will have to make it right. That is where "We paid 2 months rent already plus hefty refundable deposit plus refundable cleaning fee" coming from. I won't be surprised if they start throwing other nonsense at you, something like "the PM promised 3 months of free rent after we pay for 2 months, and no we do not have a proof of that"

    I don't think cash for keys will work with them for they realize that taking cash will require to look for housing. What are the chances of finding a decent place where you don't have to pay and keep complaining how the PM screwed them up?

    I believe you need to show your teeth. The sooner the better.

    PS next time you talk to them, politely inform that they are going to have proofs of payment if they ever want to make any claims for paid rent.

    2Reply
  • Steve L.
    Investor · Rancho Cucamonga, CA · Member since 2008 · 1k+ posts · 684 votes
    14y

    Where in California are you at? I can provide you the name of a couple eviction companies. You can evict all "unnamed occupants."

    I would show up at K's house/office until you get the lease agreement. If her husband was so good to work with, maybe you should involve him?

    1Reply
  • Tatyana E.
    OP
    CA · Member since 2011 · 39 posts · 5 votes
    14y

    I e-mailed K. another request to e-mail me all the papers immediately, this time my e-mail wasn't very nice and clearly stated that it is my 5th request within the last 3 days and that I'm really on my edge of losing temper.

    Her answer came a minute later:

    "I am so so sorry I did send it last night and I will send it again. K. Oh give me a minute to re scan"

    Fingers crossed?

    I am in Sacramento.

    I'm still trying to decide what to do. If I fire K. today (let's say in 10 minutes I'll e-mail her that she is no longer PM for the property) what I have to do about tenants who are paying her tomorrow? Obviously I ran out of time to deliver certified letter to tenants requesting that they pay me and not her.

    I'm just afraid that if I fire K. before I get rent from her things may get even more complicated than they already are. I may have to fight both tenants and unlicenced PM to get the rent.

    Does it make sense to wait another 2 days hoping to get rent into my account and then fire K. and mail certified letter to tenants?

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free