How can I get my credibility back with a tenant I hired ?

37 Replies

Well- despite all of the advice against it, I hired one of my tenants to do some basic property management work. He wanted work and I needed some help - pure and simple. You know how hindsight is 20/20? Well, I'm going to share some things in this post that make me cringe- and yes, I agree with you on the front end.... I was an idiot. But I would like advice on how to get my credibility back after the classic mistake of commingling business with a tenant. 


Long story short, I have a tenant in one of my properties who I trusted. He and his wife paid rent on-time, he seemed like an honest guy and I really needed a new team member to help be my "boots on the ground". Being an out of town landlord, I needed someone to help keep contractors straight, help pick up supplies and keep the jobs running. Basically I needed a project manager, and since he claimed to have helped real estate investors in the past, I felt like this could be a successful partnership. 

Cringe-worthy mistake #1: I sent over a business credit card for him to use for supplies 

(yes, I'm an idiot). I justified it by: 

1. I trust the guy 

2. It will help save me time 

3. He rents from me, I like this guy as a person- why would he do anything shady?? 

well- after about 3 weeks that one bit me in the behind- charges from Family Dollar and Lowes popped up that were not authorized. I immediately cancelled the card and had him return what he bought- which after pressing him for the receipts it was clear they were not job related charges. 

Had he been a contractor, I could have fired him, but since he is one of my tenants, I felt I needed to tread lightly. I wasn't willing to press charges or make a huge deal about it-  and decided this was my own stupid tax for even thinking a credit card was a good idea in the first place. ( I have to take some responsibility there on my end). 

Cringe-worthy mistake #2: By hiring him, he clearly saw that I needed additional help, which damaged my credibility as a landlord.

As landlords, we have to keep a distance. As soon as tenants feel too comfortable, they start to take advantage... which leads to... 

Cringe-worthy mistake #3: I gave him an exception in paying rent on-time this past month.. 

(insert throw pens, remote controls, your computer mouse at this forum post) 

If I haven't lost you from my absolute lack of common sense and lack of following my OWN Processes, read on as to why this was the nail in my coffin with this tenant.....

A little back story- he called me up at the beginning of the month with "the story". We all get them- heck, I get one from each new tenant at least once within the first 3 months they start renting from me. And I'm good at being firm. 

However, since he had helped me out with these renovation projects, I felt I owed him a favor. I told him I wasn't happy that he was going to be late, and that I would make an exception this once. I asked him when he could have rent paid and he said 01/17. 

Well- you guessed it- its 01/17- end of day, no rent. I reached out earlier today and you know what his response was? " I will get it to you later". He acted like I was the one bothering him!! (Landlord credibility completely annihilated). 

The lesson I learned here was to never ever ever ever hire a tenant to do any sort of work. And secondly, never ever ever waiver on rent collection processes. And never give a tenant/ project manager a credit card ( I pretty much added that in for myself- anyone reading this with any common sense already knows that) 

So the purpose of this post is two fold- One- I would love some advice on how I can get my credibility back with this tenant and avoid this every single month until his lease expires in June. And Second- if in the future it seems like a good idea to hire a tenant to do some work- please think twice. 

@Kimberly Kesterke

You do not need to gain credibility back, you need to fully enforce the lease to the maximum extent your jurisdiction allows. Do not concern yourself with this tenants feelings, they burned that bridge when they were late. This is not the kind of tenant you need to “win back”, because they are a loser. Evict.

And when the day comes that your forget this lesson, and it most likely will, at minimum have the tenant pay every single dollar they can afford on the 1st. If that amount is less than 90% of rent, take the $ and begin eviction.

The ONLY possible way to get this tenant back under control is to give whatever notice is till required in your area, maybe a 3 day type notice? and start the eviction process ASAP.  No grace, no partial payment.  And no more allowances for being late.  Oh, and do collect the late fee too.

Drive to the house tomorrow and post first thing in the morning, be there by 8am.

@Kimberly Kesterke

I hope nobody piles on. You've learned what you needed.

I don't think you have a good chance of reasonably rehabbing this. You're already going to have to go belly-to-belly here to get results on rent. It doesn't have to be a conflict or confrontational, but you're going to have to ask why the rent was late and how he plans to make sure next month the rent is not similarly late. "I spent it on something else" is not an answer. You smile and nod compassionately when he says that and say, gently, "Well, (insert name), you're insisting that I float you a two week plus loan, aren't you? I just want to know what was that important, so that we both know where we stand."

That phrase hasn't failed me in the past. But then again, I'm a big guy in his 40s. I look exactly like what I am. I'm under no illusions that my size has helped me in discussions like these. You're going to have to develop your own repertoire to some extent.

Be blunt to the point, professional as you can with this guy. Explain you gave him an opportunity to work with you and he frauded you. You feel as if you been had, you hired him as a service which he did unsatisfactory, in business we make.mistakes and move forward .. 

Explain to him now moving forward no longer working together and you as a tenant. . Your rent is late and it will not be tolerated!

You can say .. I'm getting the pattern of late rent on a regular basis, offer to let him break the lease to find something less expensive, and give his security deposit back as long as the place is tenant able.. end it with something like unfortunate if rent is late as a business I will be forced.to seek the legal remedies. 

The point is you have to let him think you dont care, its pay rent and stay or dont pay rent and leave or get evicted .. no inbetween and you are not going to wait to see next month.. he took advantage. One thing I learned is to nip issues in the butt asap. Be clear and to the point .. explain in detail your expectations so there is no confusion,  every thing is on paper, under promise over deliver . If this guy doesnt pay next.month move forward with notice to pay or quit  .  Send a message to your other tenants in doing so

Originally posted by @Kimberly Kesterke :

Well- despite all of the advice against it, I hired one of my tenants to do some basic property management work. He wanted work and I needed some help - pure and simple. You know how hindsight is 20/20? Well, I'm going to share some things in this post that make me cringe- and yes, I agree with you on the front end.... I was an idiot. But I would like advice on how to get my credibility back after the classic mistake of commingling business with a tenant. 


Long story short, I have a tenant in one of my properties who I trusted. He and his wife paid rent on-time, he seemed like an honest guy and I really needed a new team member to help be my "boots on the ground". Being an out of town landlord, I needed someone to help keep contractors straight, help pick up supplies and keep the jobs running. Basically I needed a project manager, and since he claimed to have helped real estate investors in the past, I felt like this could be a successful partnership. 

Cringe-worthy mistake #1: I sent over a business credit card for him to use for supplies 

(yes, I'm an idiot). I justified it by: 

1. I trust the guy 

2. It will help save me time 

3. He rents from me, I like this guy as a person- why would he do anything shady?? 

well- after about 3 weeks that one bit me in the behind- charges from Family Dollar and Lowes popped up that were not authorized. I immediately cancelled the card and had him return what he bought- which after pressing him for the receipts it was clear they were not job related charges. 

Had he been a contractor, I could have fired him, but since he is one of my tenants, I felt I needed to tread lightly. I wasn't willing to press charges or make a huge deal about it-  and decided this was my own stupid tax for even thinking a credit card was a good idea in the first place. ( I have to take some responsibility there on my end). 

Cringe-worthy mistake #2: By hiring him, he clearly saw that I needed additional help, which damaged my credibility as a landlord.

As landlords, we have to keep a distance. As soon as tenants feel too comfortable, they start to take advantage... which leads to... 

Cringe-worthy mistake #3: I gave him an exception in paying rent on-time this past month.. 

(insert throw pens, remote controls, your computer mouse at this forum post) 

If I haven't lost you from my absolute lack of common sense and lack of following my OWN Processes, read on as to why this was the nail in my coffin with this tenant.....

A little back story- he called me up at the beginning of the month with "the story". We all get them- heck, I get one from each new tenant at least once within the first 3 months they start renting from me. And I'm good at being firm. 

However, since he had helped me out with these renovation projects, I felt I owed him a favor. I told him I wasn't happy that he was going to be late, and that I would make an exception this once. I asked him when he could have rent paid and he said 01/17. 

Well- you guessed it- its 01/17- end of day, no rent. I reached out earlier today and you know what his response was? " I will get it to you later". He acted like I was the one bothering him!! (Landlord credibility completely annihilated). 

The lesson I learned here was to never ever ever ever hire a tenant to do any sort of work. And secondly, never ever ever waiver on rent collection processes. And never give a tenant/ project manager a credit card ( I pretty much added that in for myself- anyone reading this with any common sense already knows that) 

So the purpose of this post is two fold- One- I would love some advice on how I can get my credibility back with this tenant and avoid this every single month until his lease expires in June. And Second- if in the future it seems like a good idea to hire a tenant to do some work- please think twice. 

Don't be so harsh on yourself. You made a mistake and know where you went wrong; you are a good person and you got burned as a result of it. As others have said, evict. Get the clown out of your house and out of your life. I hope this is an easy process for you. Good luck Kimberly, you've already got your credibility back by identifying your mistake and searching to rectify it. 

 

@Kimberly Kesterke good learning and good advice here, seconded.

Put together a record of the credit card charges he used to buy non related job things. If he gets hostile or difficult during the separation process remind him that you chose to interpret his use of the credit card as a lapse in judgement but are willing to pursue him for damages/charges.

Should be a good small claims court thing if he didn’t pay you back. Just something to hold in reserve.

 If he stole from you and now isn't paying the rent, it's time for him to find another place to live.  Don't loose a minute sleep about regaining creditability with a tenant that lies and steals.  Don't take any excuses. If the property is in Marietta you should not have a problem finding a new "good" tenant.  Post the pay or quit and stick to your guns.  

@Kimberly Kesterke Great news! All you need to do to get your credibility back is to post a 3 day notice to leave (or whatever is the the GA equivalent) on the tenant's front door. If he calls (all huffy or otherwise) just tell him he's going to need to get to you in 3 days or less and move on. 

@Kimberly Kesterke - I admire and appreciate you sharing this experience to help others. No one's perfect and we can all get into situations when we know better. To use your own phrasing, I think your true "stupid tax" here is losing a formerly reliable tenant because you have to evict at this point. That's how you reestablish your reputation. When he retells the story it will go along the lines of, "yeah, I thought I had the advantage... but boy was I wrong." It reestablishes your credibility in the bigger picture.  I wonder if you get stuck doing a true eviction, because offering cash for keys lets him think he still pulled one over on you in the end, in the long run, you know?

Well there’s no point in reminding you how foolish that was . You know it better than any of ya now ..It sounds like you learned a master lesson here and there’s no point in anyone saying we told you so . Kim the reality is This is a tough business , it’s a people based business and no one was born with these skills or “ grit” so we gotta always be open to learn and always always always keep moving forward even if it’s an inch at a time

@Michael King I reminded them of the payment process and when evictions would  he filed. Luckily I got paid the rent today. Lesson learned. @Dennis M. yes- this business is not easy- When I follow the right processes things go relatively smoothly. It’s always when I slack on a requirement or cut a corner out of convenience that it ends up biting me. 

Originally posted by @Kimberly Kesterke :

@Michael King I reminded them of the payment process and when evictions would  he filed. Luckily I got paid the rent today. Lesson learned. @Dennis M. yes- this business is not easy- When I follow the right processes things go relatively smoothly. It’s always when I slack on a requirement or cut a corner out of convenience that it ends up biting me. 

 I'm very happy to hear that for you Kimberly. I would be very strict with that guy now; let him know who's boss. He probably just needs to be re-trained and you'll receive rent on time, without attitude. 

I Find I do this with my black lab sometimes  actually . I will give her too much trust I’ll let  her to roam the back yard Or not put the trash up ..and little by little she takes my kindness for granted and  Then Screws me over ! Now you’d think after 13 years of this foolishness I’d learn but I don’t ! I’m not sure I can “ retrain” my dog but I can do the next best thing and that is a shock collar . I guess the lesson in that story is you must ZAP the tenant to get control , in this case that’s comply or eviction notices . Make him aware that you still have the final say and can apply force 

@Kimberly Kesterke it’s not you that has a credibility problem. Your tenant does. We all learn from our mistakes in RE. My first tenant I accepted post dated checks. Three months later I had my first eviction. Not a good start for me but I am a quick learner Was that the tenants fault, no that was my fault Another lesson I learned. If you allow a tenant to pay late with no penalty then every month you will be calling him for rent. The only time I use a tenant for work is to show a property. And I pay a showing fee. I don’t take it off the rent. This actually works well for me since I am an out of town investor and my properties are multi family. But I have to have a degree of trust in them to offer this. From cutting grass to major repairs I hire professionals because of lessons learned. I ONCE let a tenant negotiate lower rent for providing lawn care. Another lesson learned. Luckily all leases have an end date and I enforce that on all late payers and high maintenance tenants.

Originally posted by @Kimberly Kesterke :

Well- despite all of the advice against it, I hired one of my tenants to do some basic property management work. He wanted work and I needed some help - pure and simple. You know how hindsight is 20/20? Well, I'm going to share some things in this post that make me cringe- and yes, I agree with you on the front end.... I was an idiot. But I would like advice on how to get my credibility back after the classic mistake of commingling business with a tenant. 


Long story short, I have a tenant in one of my properties who I trusted. He and his wife paid rent on-time, he seemed like an honest guy and I really needed a new team member to help be my "boots on the ground". Being an out of town landlord, I needed someone to help keep contractors straight, help pick up supplies and keep the jobs running. Basically I needed a project manager, and since he claimed to have helped real estate investors in the past, I felt like this could be a successful partnership. 

Cringe-worthy mistake #1: I sent over a business credit card for him to use for supplies 

(yes, I'm an idiot). I justified it by: 

1. I trust the guy 

2. It will help save me time 

3. He rents from me, I like this guy as a person- why would he do anything shady?? 

well- after about 3 weeks that one bit me in the behind- charges from Family Dollar and Lowes popped up that were not authorized. I immediately cancelled the card and had him return what he bought- which after pressing him for the receipts it was clear they were not job related charges. 

Had he been a contractor, I could have fired him, but since he is one of my tenants, I felt I needed to tread lightly. I wasn't willing to press charges or make a huge deal about it-  and decided this was my own stupid tax for even thinking a credit card was a good idea in the first place. ( I have to take some responsibility there on my end). 

Cringe-worthy mistake #2: By hiring him, he clearly saw that I needed additional help, which damaged my credibility as a landlord.

As landlords, we have to keep a distance. As soon as tenants feel too comfortable, they start to take advantage... which leads to... 

Cringe-worthy mistake #3: I gave him an exception in paying rent on-time this past month.. 

(insert throw pens, remote controls, your computer mouse at this forum post) 

If I haven't lost you from my absolute lack of common sense and lack of following my OWN Processes, read on as to why this was the nail in my coffin with this tenant.....

A little back story- he called me up at the beginning of the month with "the story". We all get them- heck, I get one from each new tenant at least once within the first 3 months they start renting from me. And I'm good at being firm. 

However, since he had helped me out with these renovation projects, I felt I owed him a favor. I told him I wasn't happy that he was going to be late, and that I would make an exception this once. I asked him when he could have rent paid and he said 01/17. 

Well- you guessed it- its 01/17- end of day, no rent. I reached out earlier today and you know what his response was? " I will get it to you later". He acted like I was the one bothering him!! (Landlord credibility completely annihilated). 

The lesson I learned here was to never ever ever ever hire a tenant to do any sort of work. And secondly, never ever ever waiver on rent collection processes. And never give a tenant/ project manager a credit card ( I pretty much added that in for myself- anyone reading this with any common sense already knows that) 

So the purpose of this post is two fold- One- I would love some advice on how I can get my credibility back with this tenant and avoid this every single month until his lease expires in June. And Second- if in the future it seems like a good idea to hire a tenant to do some work- please think twice. 

Who cares what our tenants think of us, it's usually off-base anyways. You're too hard on yourself. You reached out for a beneficial relationship and got burned. If anyone needs help with their credibility it's your tenant, not you. You know what to do and are doing it - that's as credible as it gets. I'll guess you needed to vent more than you needed advice!!! Vent away - we are here to listen :)

 

@Kimberly Kesterke . So the entire post how I see it is how do you get your credibility back ?? You want to know what I do I rule over my tenants with an iron fist don’t call me unless you need something fixed that I’m responsible for or you’re making a rent payment. Anything else goodbye.

This is how you get your credibility back put him out.... don’t renew his lease. If you can’t handle it hire a property management company 10% and they should have people on staff

@Edward L lauckern . Absolutely not. The OP owes no explanation to this guy whatsoever he’s late with his rent. If she owes him anything it’s an eviction notice. Here it’s 2 months lost rent after the notice to flip a unit. She’s already lost 1/2 a month. It will cost her 3 months rent plus repairs to get her next full rent check. Why does she owe him an explanation?? RR

@Jonathan R McLaughlin . Going to small claims court won’t gain a thing. You can’t get blood from a turnip. He can’t pay rent why would he pay a small claims judgement. Only option is evict and move on. Your first loss is your best loss. Cut your losses and move on.

@Ralph R. thinking she may need that as an additional lever to get him out if and when he fights the eviction/lease termination. It will do something too....records of judgements follow people even if you can’t collect. Worth a morning. Really though, all about having the  most tools to get him to move on.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here