Illegal immigrant tenants and lease termination

Lender · Portland, OR · Member since 2019 · 28 posts · 19 votes

Hello everyone,

I feel like maybe I’m being a softy, however I wanted some input from the more experienced landlords out there on how they would/have handled this situation.

So recently I closed and owner occupy on a 4-plex. The plex is occupied by 4 Latino families that have all been there 10+ years. I sent the month to month termination letter with one months rent (825$) and 3 months to vacate.

I received a call this morning from the tenants literally in tears and broken English asking

“why us?” And “we will be homeless, no where for us to go, please we pay more for rent to stay”

Needless to say My heart broke.

How would a professional manager go through with this?

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Cori Leste

Rental Property Investor · Portland, OR · Member since 2016 · 22 posts · 46 votes

@Dennis M. Ew. They are humans. Have you no heart, as obviously this new landlord does? While the law is on his side, we should all strive to treat fellow humans with dignity and respect. And we all need a roof over our heads. That’s the business we’re in - providing that basic human need.

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Eric Koelling
Member since 2020 · 1 post · 0 votes
6y
Is the property located in Portland? I sent you a DM by the way. Hope that's ok.
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Dan H.Pro Member
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
6y
Originally posted by @Bill O'Donnell:
@Dan Heuschele
I have a real question for you. How do you screen your tenants. I have a rental in a sanctuary city. I get applications from people who can not be checked for credit or criminal background they have no social security numbers. Cozy can't give me a report. How can they be screened.
This goes beyond our opinions on whether they should be here. How can they be screened.
Our eviction law, and the new limits on security deposits, make it riskier than ever to have a problem tenant.

We have 3 tenants that I suspect are illegal but only one that we placed, the other two were inherited. The one we placed had some other identification number other than SSN (I forget what it is called but they have been paying taxes), but did not have a verifiable credit history. So it is a problem. The tenant that I suspect that is illegal that we placed we went on their current PM recommendation (7 years) who is a friend/family of my step sister. So it was an unusual circumstance. Normally we require a credit to ding and this person has no credit to ding but they had a PM recommendation from someone that I have met and my step sister knows well (I think the PM is related to my step sister through my step sister's husband).
Sorry my answer is no help. We typically do not take a tenant without a credit history but this recommendation made it a special case. The tenants have only been placed around 6 months (they are our newest tenant) but so far they have been ideal tenants. They had a toilet issue about 2 months ago. The inside of the unit looked virtually as nice as when they moved in (clean and uncluttered).
Good luck
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Greg M.
Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes
6y
Originally posted by @Dan H.:

As a smart landlord you should care. The odds of your legal resident tenant being deported is practically zero. The odds of your illegal resident tenant being deported is significantly higher. If your tenant gets deported, what are you going to do? Are you going to mail them a letter to come get their stuff and store it the required number of days? What about the lost rent? How are you going to collect it? Take them to court? Legal residents can have their wages garnished and bank accounts levied.
The odds of a legal resident skipping out on money owed is much lower. Most legal residents care about their credit and ability to rent a place. Do illegals care about their non-existent credit file?
I'm not stating one way or another if a landlord should rent to an illegal, but if they do, in my opinion it should come with a 25%-30% risk premium. That's not taking advantage of someone, that's just pure business sense. Higher the risk, higher the reward.
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Dan H.Pro Member
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
6y
Originally posted by @Greg M.:
Originally posted by @Dan H.:

As a smart landlord you should care. The odds of your legal resident tenant being deported is practically zero. The odds of your illegal resident tenant being deported is significantly higher. If your tenant gets deported, what are you going to do? Are you going to mail them a letter to come get their stuff and store it the required number of days? What about the lost rent? How are you going to collect it? Take them to court? Legal residents can have their wages garnished and bank accounts levied.
The odds of a legal resident skipping out on money owed is much lower. Most legal residents care about their credit and ability to rent a place. Do illegals care about their non-existent credit file?
I'm not stating one way or another if a landlord should rent to an illegal, but if they do, in my opinion it should come with a 25%-30% risk premium. That's not taking advantage of someone, that's just pure business sense. Higher the risk, higher the reward.

All 3 of the units that I suspect of having illegal residents have multiple adult tenants. So for each to be deported is quite unlikely but it could happen.
So far I have never not collected rent due to a deportation. Therefore, it has so far been low risk. The 3 tenants I suspect of being illegal residents have been good tenants. None has ever been late with their rent, they keep the units in fine shape, and they are reasonable in their repair requests. Basically the only possible complaint I could have is that I suspect them of being illegal (one I highly suspect is illegal because I know they do not have a SS number - but they do pay taxes).
However, I cannot legally ask their resident status so it is moot on whether there is additional risk due to a deportation risk. I also view the LL laws and the associated risks are built into every market rent. Make it harder to terminate a poor tenant, market rent goes up. Reduce the allowed screening of tenants, market rent goes up. Force acceptance of Section 8, market rents to up. Basically increased risk results in increased market rent. I expect market rents will go up ~8% in my market in 2019 due to increased risk.
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Jennifer Stradtman
Investor · Nashville and Tallahassee · Member since 2019 · 31 posts · 11 votes
6y
I’d get a translator. Explain your predicament. Work with them on their time frame to relo within reason. Incentivize them to leave (I.e. maybe you identify other comparable options, reference letter, discount in final month rent for delivering it clean and in good repair, rent a moving truck for the day if you have to) and maybe you’ll have some leave willingly. Maybe you raise Rents to market value and they stay which saves you the expense of finding new tenants. With a rent increase surely someone will go.

Poor thing. You bought a unit with loyal tenants😂 It’s hard when you have a big heart. I always get my realtor/leasing agent to do the dirty work because I know I can’t. Good luck.

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Jennifer Stradtman
Investor · Nashville and Tallahassee · Member since 2019 · 31 posts · 11 votes
6y
Buy them another house to rent from you😂
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Ken Miller
Rental Property Investor · Lakewood Ranch, FL · Member since 2012 · 17 posts · 3 votes
6y
@Luke Dilorenzo
Hi Luke, I did the same as you and did an fha loan to “house hack” my first 4-plex and just finished my 12 months living there and am now moving out to get a renter in there. The past 12 months living there has completely changed me. I started managing the apartments myself and did it for a few months before hiring a property manager to take over. This is just the beginning of your “wow’s” and “I didn’t see that coming” issues. My recommendation is to get a property management company hired ASAP to take all this over for you. You can still live in one unit and have the other three handled by them. Good luck!
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Michael G.
Rental Property Investor · Brooklyn, NY · Member since 2013 · 272 posts · 165 votes
6y
Wait - Why did you send them a termination letter? If they were/are good tenants and are paying the rent reliably, why not keep them, regardless of their immigration status?
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Tracy Johnson-Cantwell
Rental Property Investor · Palm Harbor, FL · Member since 2019 · 5 posts · 3 votes
6y
@Russell Brazil
He’s not evicting 3 tenants. He’s evicting ONE unit because he has to live in the unit per his loan agreement
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Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
6y
Originally posted by @Michael G.:
Wait - Why did you send them a termination letter? If they were/are good tenants and are paying the rent reliably, why not keep them, regardless of their immigration status?

Read his original post instead of just reading the title... He needs one of the four units vacant so he can owner-occupy per his mortgage terms. He legally served them notice of non-renewal and followed Oregon 90 day requirements. This has nothing to do with being good tenants OR immigration status. He picked the unit to vacate based on it being in the worst condition. He didn't even know their immigration status when sending the letter.
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Mindy JensenPro Member
BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
6y
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[email protected]Podcast Guest on Show #261
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