New acquired house with tenants not paying rent.

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New acquired house with tenants not paying rent.

Tram Nguyen
Member since 2021 · 2 posts · 1 vote

We just bought our first rental house through roofstock with tenants in it. Lease is until November 2021. Before we bought, papers showed that tenants paid the last four month until Jan. However, one month after closing we figured out they stoped paying rent after Jan. It’s really hurting as this is our first deal ever. We don’t know what to do now rather then wait until eviction moratorium ends. We’re thinking about acquiring more properties, but don’t know how to make sure that tenants are up with rent and we’re not jumping in a trap. Please advise!

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Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
5y

Your PMC should be able to share with you their well-thoughout plan to address this issue! 

The PMC is supposed to be the experts, but too often turn-key providers like Roofstock hire the cheapest PMC's instead of the best - all to make their ROI numbers they pitch to investors look better.

[email protected]248-209-6824
Logical Property Management4.9460 Reviews
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  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    5y

    When you talked to the tenants, what reason did they give for not paying rent?  Remind them the CDC ban only applies to people who have lost income due to covid and they need to sign paperwork stating that.  You should also be able to apply to government assistants to help cover the rent.

    The current situation is odd all around. One way to get around the problem is buying a property and requiring it to be vacant upon possession.  Also check the morning of closing to ensure that it is vacant and let your attorney know if it isn't.

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  • Aj Parikh
    Rental Property Investor · Centreville, VA · Member since 2019 · 1k+ posts · 799 votes
    5y

    Sorry to hear about this situation. I would keep following up with your property management to stay on top of sending notices to the tenant. Also, whenever the moratorium ends, make sure you file for eviction and try to collect all the missed rent through debt collection services. You can also check with the county that the property is in to see if there are any landlord assistance programs. 

    Roofstock should also have a rent guarantee for 1 year so check with your transaction coordinator to see what assistance they can provide. I also purchased through Roofstock last year so let me know if I can be of any help. 

    1Reply
  • Hector Luna
    Centreville, VA · Member since 2014 · 2 posts · 0 votes
    5y

    I'd second what @Theresa Harris said. If they don't reply with a valid reason, it might be a good idea to consider paying them to leave the property. It might cost a thousand or so dollars but it can save you a lot of headaches and money in the long run.

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  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    5y

    Your PMC should be able to share with you their well-thoughout plan to address this issue! 

    The PMC is supposed to be the experts, but too often turn-key providers like Roofstock hire the cheapest PMC's instead of the best - all to make their ROI numbers they pitch to investors look better.

    [email protected]248-209-6824
    Logical Property Management4.9460 Reviews
    WebsiteView Page
    2Reply
  • Daniella Steinberg
    Member since 2020 · 32 posts · 5 votes
    5y

    I agree you should also definitely let roofstock know, as part of their platform is customer service and they want to make sure they can stand behind their products and services

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  • Daniel Thomas
    Rental Property Investor · Nashville, TN · Member since 2015 · 3 posts · 0 votes
    5y

    Tram, sorry to hear about the situation you're facing. I've faced similar issues with a handful of the single family investments I've had in the past. Cash flow projections looked great on paper, but ultimately disappeared due to tenants not paying rent and sometimes outright destroying parts of the property. This is even more difficult when you don't have a number of other properties to help cover those losses. 

    This is utlimately why I transitioned my focus, and my investments into large multi-family syndication opportunities. These have proven to be much more consistent and passive than a majority of these "Turn-key" properties. Having additional scale through hundreds of units in a single investment also helped immensely through the uncertain periods during the pandemic last year. 

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  • Patricia Steiner
    Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes
    5y

    I'll skip to the solution:  

    Send the Tenants a Notice To Quit for non-payment of rent.  Even with the moratorium in place for a while longer, this will put them on notice that you know they owe rent and you want it.  You can file for eviction but you just can't kick them out if the moratorium is in effect in your state (our state has been allowing evictions because we're pretending Covid is over...fun, huh?).

    Then, file a small claims court filing against them - which is not included in the moratorium.  It's generally less than $50 to file.  Get a judgement against them so that you get paid before they get that next car, apartment, or iphone.

    And, if they are suppose to be paying utilities, be sure to contact the providers to make sure they are being paid - because you may find that your property is going to have a lien for non-payment.

    You're running a business. Due diligence is not a luxury and when buying real estate - "let the buyer beware" is in full effect.  Don't let this continue for one more day.  Enforce your lease and actively manage your business.

    1Reply
  • Joe S.Pro Member
    Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
    5y
    Originally posted by @Patricia Steiner:

    I'll skip to the solution:  

    Send the Tenants a Notice To Quit for non-payment of rent.  Even with the moratorium in place for a while longer, this will put them on notice that you know they owe rent and you want it.  You can file for eviction but you just can't kick them out if the moratorium is in effect in your state (our state has been allowing evictions because we're pretending Covid is over...fun, huh?).

    Then, file a small claims court filing against them - which is not included in the moratorium.  It's generally less than $50 to file.  Get a judgement against them so that you get paid before they get that next car, apartment, or iphone.

    And, if they are suppose to be paying utilities, be sure to contact the providers to make sure they are being paid - because you may find that your property is going to have a lien for non-payment.

    You're running a business. Due diligence is not a luxury and when buying real estate - "let the buyer beware" is in full effect.  Don't let this continue for one more day.  Enforce your lease and actively manage your business.

     Wow you really have it together. Have you ever considered being a property manager? :-)

    0Reply
  • Michael Gilman
    Investor · Westchester, NY · Member since 2014 · 96 posts · 57 votes
    5y

    Are tenants on a lease or month to month?  You can always non-renew and also seek to evict for violations of other lease terms if applicable (i.e. damage to property, nuisance). 

    If they signed the CDC declaration some courts will allow landlords to present evidence that tenant has commited perjury (i.e. they have a job, or have sources of income which they are not using to contribute to payments such as enhanced unemployment and stimulus checks)

    Lastly, most effective and quickest is having tenant voluntary vacate with cash for keys.  IN fact most of the time landlords are better going this route than bothering with the eviction process all together due to current back logs and climate. 

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  • Jonathan R McLaughlin
    Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
    5y

    wait a minute? they don't owe you money if you just bought it. Your beef is with the dishonest seller. Let them know they have a "get out of jail free" card if they pay the rent. And start your process the moment they don't. 

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