Real Estate Agent · Dallas, TX · Member since 2017 · 136 posts · 141 votes
Anybody here have any success stories retrieving money owed from previous tenants? 
One of my ex tenants left the house a mess, owes me a couple months of rent and a fee for breaking the lease early. We set up a repayment plan, but as of last week he begun ghosting me. I get sent straight to voicemail.
I’m leaning towards using a commission based collection agency. That or a straight gangsta..
Sorry. You're in Texas. No wage garnishment here. Collections are near impossible, especially when tenants are broke (which is the most likely scenario with your tenant). You can waste time and energy pursuing in court but chances are not good of collecting. Just take the lesson learned and move on.
@Courtney Nash I’m not sure if others use it, but my preferred method is zelle. That’s how my other tenants who are always on time pay me.
I don’t use a property manager because even though I’m a full time teacher and RE agent I have the time and energy to manage them myself. Not saying I won’t hire one after say 8 or so houses
@Courtney Nash, I'm not sure what "going gangsta" really means, but it strikes me as a bit juvenile. (I know you didn't start the phrase but I see it bandied about in this thread.) This business is not rocket science. You screen as best you can, gain experience that makes you better at it, and ultimately accept that inevitably some will slip by your screening. (It just happens and is part of the business.) Charge market deposit. Don't waste time chasing broke tenants. Move swiftly to evict and run it like a business.
Also, I don't see a lot of upside of jacking up people's credit in the very remote chance they will pay one day. If we're being honest, it's just being vindictive (not saying it's not justified, just not rational from a business point of view.) Seems to me you are messing with people who quite possibly have fallen on desperate times and are inviting them to retaliate. People with nothing to lose who feel wronged can often justify any actions. Just my two cents.
I was going to tell you to stick it to him so that he’ll be sleeping in his mommy’s basement the rest of his life but @John Chapman’s reply humbled me.
Leave well enough alone. You got your property back and back rented out. Let this be a learning experience. You’ll get the money back over a few years.
@John Chapman Going gangsta was written as a joke and with the intention of reeling in a lot of responses that would help expand my understanding of how to handle this sort of situation. It worked! #1 on trending plus plenty DMs
A chance of getting money back (which according to most respondents ranges from 10-20%) seems much better to me than no chance. A free 20 minute submission for a decent shot at 6k is a shot I’ll always be willing to take.
In general places that rent for $1350 are often in more high C low B areas...... it wont be "night and day" for 1350 vs 1500 for the class of tenants.......
You can get dead beats at any level...... work on your screening....... be vigilant about late rent and start eviction early on....don't get strung along and get farther and farther in the hole before you act.....
@E.S. Burrell hey I’m not some wealthy real estate tycoon. I’m an elementary school teacher seeking strategies on how to retrieve the 6k I’m rightfully owed.
I was very understanding with the tenant and laid out a very manageable, long term repayment plan and even returned him the keys at one point so that he could have another chance at cleaning/fixing and earn/count the deposit towards his debt.
@Ned J. Thanks for the advice Ned. Being more vigilant about late payments/don’t be a lazy screener I feel are the top lessons I’ve learned from this experience.
Targeting higher renting properties goes beyond the issues I shared in this post. I’m tweaking my investment strategy to better meet my long term goals is all
@E.S. Burrell hey I’m not some wealthy real estate tycoon. I’m an elementary school teacher seeking strategies on how to retrieve the 6k I’m rightfully owed.
I was very understanding with the tenant and laid out a very manageable, long term repayment plan and even returned him the keys at one point so that he could have another chance at cleaning/fixing and earn/count the deposit towards his debt.
@Ivan Loza, "It worked! #1 on trending plus plenty DMs." Yep, I'm going stick with my opinion that "going gangsta" along with the title of this thread is rather juvenile. Maybe it's a generational thing. Maybe I've been doing this too long. I don't understand making statements like that. If you wanted honest advice about how to proceed under these circumstances, you got it in the first few responses. (The solution is pretty basic) I'm not sure what stoking this thread continues to accomplish. You seem like a nice guy but there are a number of statements you've made that are flat wrong and are based on inexperience. You seem very upset about how you've been treated by this tenant, which I totally understand. What I'm suggesting is that you rise above those feelings and treat it like a business. Feel free to DM if you'd like.
@John Chapman It’s just as much a personality difference as it is a generational thing. You spend most of your day analyzing legal documents and I spend most of my day teaching 5 year olds how to share and what sounds each letter makes. You’re more 🤖 and I’m more ‘uses a robot emoji on BiggerPockets’. Statements like the ones you mentioned generate business for RE Agents like myself now a days believe it or not. I honestly do appreciate your feedback and I don’t doubt for a second that you have vast success and experience in this industry. However, since you called this 25 year old a juvenile I’ll have to end with ok boomer
Get a law firm involved who specializes in collections. There is a lot of stuff that has to be done correctly to get a garnishment on wages. Even then, once you start collecting people switch jobs and you have to start all over with the garnishment. Many times, your not the only creditor coming after them so they go dark after getting hounded for a while. It will take many years to collect all your money if you can get the garnishment set up. Learn to screen better and maybe do quarterly inspections to Verify the interior conditions before it gets out of hand. If you follow the letter of the law and stay tight in a non paying tenant, they should never be into you for more than 45-days rent, and hopefully you have some SECurity deposit to mitigate that.
@Ivan Loza chose the best route in his situation with the property being located in Texas.
-At this point, he cannot take the tenant to Small Claims court as he would need to know where the tenant is located for them to be served
-You cannot garnish wages in Texas
-Even if you are able to obtain a judgement in Texas, it is very very difficult to collect as the list of exempt property is extensive to that a renter almost never would own anything that is not exempt. The list includes cows, chickens and of course guns. Heck, one can own a $1 million home free and clear and claim it is their homestead and it cannot be touched
-The flip side to this is we can evict a tenant often in +-21 days
Ivan- The 10-20% chance of collection is still fairly optimistic as I would put the chances at about 5% for the typical tenant
Is there mention of what happens when money is owed you? Is there mention of who pays court costs?
Either way, it seems to me like it's time to use the system. After all, the system is there to help the tenants. Yes, before we had such laws, arms and legs were broken for less reasons.
Seeing that your calls and texts are ignored, you have already ended that line of communication. Time to attach the wages.
Your vetting process at renter application should have revealed employers and such from each tenant. After 5 days late, the legal process should have commenced.
@BOB CRANEY unfortunately I don’t think wages can be garnished in my state. But yes I definitely plan on being stricter, and more purposeful to limit my losses in the future
@Ivan Loza could be worse. If you owned a multifamily property in the Chicago area, it could take you a year to evict a deadbeat tenant and cost thousands in legal fees, plus all the lost rental income and potential damage they can cause to your property.