How to evict good tenant?
Handyman · Orange County California · Member since 2019 · 9 posts · 2 votes
How to evict good tenant?
Most Popular Reply
Rental Property Investor · Closter, NJ · Member since 2015 · 884 posts · 722 votes
3yDon't close on the property until Seller has removed all the tenants. Buy the property vacant.
22 Replies
- Rental Property Investor · Laguna Niguel, CA · Member since 2019 · 175 posts · 116 votes3y
1 - cash for keys
2 - you can ask them to move out if you plan to move into the property
3 - Find some violation of the lease terms and evict them based on that.
4 - wait for the lease to expire and not renew, or renew with them at market prices.
5 - talk to the tenants to see if they would be willing to break the lease and sign a new one for higher amount but less than market prices.
Keep in mind that evicting a tenant in a state like California can be a lengthy and expensive proces. Also factor in turnover costs (cleanup, painting, making the property rent ready, etc)
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes3y
Quote from @Blake Kirby:
I just got a deal...
I wouldn't call that a deal. You may have an uphill battle and it's one you may lose. I wouldn't buy a property like this unless I knew for sure that I could get the tenants out.
The DIY Landlord Book4.7247 Reviews - Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes3y
You are bound to the lease in place. You cannot evict tenants unless they are in violation of the lease. I suggest you read through it to find grounds for eviction.
- 3yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Pass. Hard pass actually...
This is not a deal, not anywhere but especially not in Cali.....
You are buying a huge headache.....
- Rental Property Investor · San Francisco Bay Area · Member since 2022 · 1k+ posts · 1k+ votes3y
You mentioned that you need to have increase rents to make the payments. Do you mean increase rents for the 7 units to at least $1800 the market rate? Are the other 2 units at market rate rent? Is this to cover the mortgage payments with property taxes and insurance, property management fees (what I could call barely breaking even) or be in a positive cash flow each month (cover the above, plus vacancies, repairs and capital expenses)? You mentioned $30,000 to remodel - is this for all 7 units or the 5 units with the $990 rent?
I don't know how much this property costs but I think you're skating on thin ice. If you're potentially in a negative cash flow for 5 out of 7 units, that doesn't sound good. If you can find a just cause eviction with lease violation, that might work. Then if you evict them that's another set of issues like Dale mentioned above.
My 2 cents is invest out of state. I'm in the Bay Area and am buying in the Midwest. You won't be paying these high California prices and dealing with landlord/tenant issues if you can't increase the rent or get those 5 tenants out quickly with minimum cost. If this is your first rental property that's a lot to deal with.
@Blake Kirby consider borrowing the funds to get the tenants out. It may make sense, even if you’re paying hard money rates. It’s gonna be tough getting them out unless you go down the major renovation path, especially if they are all family and getting 50% rent.
- Rental Property Investor · Closter, NJ · Member since 2015 · 884 posts · 722 votes3y
Don't close on the property until Seller has removed all the tenants. Buy the property vacant.
- Rental Property Investor · Raleigh, NC · Member since 2016 · 396 posts · 995 votes3y
In Soviet California, Tenants lord you!
- Handyman · Orange County California · Member since 2019 · 9 posts · 2 votes3y
@Dale K Poyser Thank you so much for your reply! They are month to month so I can just not renew? What kind of notice do I have to give?
Is #5 legal because that seems a lot like just increasing their rents? What could be the legal repercussions?
- Handyman · Orange County California · Member since 2019 · 9 posts · 2 votes3y
@Nathan Gesner I was doing a 1031 exchange with a house I sold in Oregon. The seller financing is for seven years so if I do nothing and I’m able to increase rents by 10% annually I’ll get up to roughly 1550 in rent. I imagine that’ll put the property value close to $2 million at the end of the 7 years. What do you think? But I purchased the property for 1.7 and will sell when the loan comes due in order to 1031 up with a little over 300,000 in force appreciation. At least that was what my thought process was.
- Handyman · Orange County California · Member since 2019 · 9 posts · 2 votes3y
@Eliott Elias thanks for your response. One of the tenants does have a ring camera but it was there when I bought the property can I claim that as an unauthorized modification?
- Handyman · Orange County California · Member since 2019 · 9 posts · 2 votes3y
@Becca F. thank you for your reply. All seven are at 990. I manage the property myself and budgeted for basically nothing, my number is to only cover the mortgage. I thought kicking the tenants out, would be easier honestly. Live and learn. If I get every unit up to market value I will be turning a profit. Besides lease violations do you have any other suggestions to get them out?
I 1031ed the one house for seven units so I thought this was a great move. It’s still Can be if I can get the rents up. I have faith. And with you guys I have support.
I guess I also need to ask everyone if they have any recommendations for eviction attorneys, and a general contractor for “substantial renovations” in L.A. - Handyman · Orange County California · Member since 2019 · 9 posts · 2 votes3y
@Allan C. hey thanks for getting back to me. Have you ever done cash for keys? How much should I offer and how do I bring it up i.e. what do I say?
Do you have any recommendations for eviction attorneys, and a general contractor for “substantial renovations” in L.A. - Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes3y
Quote from @Blake Kirby:
@Nathan Gesner I was doing a 1031 exchange with a house I sold in Oregon. The seller financing is for seven years so if I do nothing and I’m able to increase rents by 10% annually I’ll get up to roughly 1550 in rent. I imagine that’ll put the property value close to $2 million at the end of the 7 years. What do you think? But I purchased the property for 1.7 and will sell when the loan comes due in order to 1031 up with a little over 300,000 in force appreciation. At least that was what my thought process was.
The market peaked in June 2022. I don't think we're done paying the price for all that "free" COVID money and things will get worse before they get better. In other words, I wouldn't be betting on appreciation markets right now. But, nobody knows what the future holds.
The DIY Landlord Book4.7247 Reviews - 3yWale LawalBusiness MemberReal Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
When – and if – a rental property owner needs to evict a tenant, there are 8 important steps:
Step #1: Know your local laws
Review your state and local landlord-tenant laws to understand the process a landlord must follow when evicting a tenant. In some cases, landlords who don’t follow the letter of the law may actually be held liable and ordered to pay the tenant damages, even though it was the tenant who was originally in the wrong.
Step #2: Make sure the reason for evicting is valid
Reasons for a valid eviction vary from state to state. Generally speaking, valid reasons for evicting a tenant include nonpayment of rent, violation of one or more terms of the lease, destroying the property, conducting illegal activity, or refusing to leave when the lease expires.
Step #3: Speak with the tenants
Before you begin the time-consuming and expensive process of evicting the tenant, speak with them to see if there’s a win-win way to resolve the situation without having to go to court.
In today’s age of instant messaging and social media, sometimes meeting face-to-face with the tenant can yield surprisingly positive results. When you do meet, try to arrange the meeting in neutral territory such as a coffee shop instead of at the rental property.
Step #4: Deliver a written eviction notice
If all else fails, the next step is to deliver a formal eviction notice to the tenant. State law dictates how delivery should be done, but usually requires personally serving the written notice and certified delivery with proof of receipt.
A written eviction notice should include the date the tenant must cure or quit, the total amount owed by the tenant in the case of unpaid rent, and the number of days the tenant has to respond or leave before beginning the eviction process with the court.
Step #5: File the eviction in court
The clerk at your local courthouse will ask you to pay a filing fee and then schedule a hearing date for the eviction.
In most cases, you’ll be asked for a copy of the notice given, proof of delivery, and evidence that the tenant was provided with the allowed amount of time to respond. Once the clerk is satisfied that you have followed the proper eviction procedures, the court will send a process server to notify the tenant that a lawsuit is pending.
Step #6: Prepare documents and attend the court hearing
Documents you should prepare and bring to court for the judge to review include the original executed lease agreement, payment records such as a rent roll and bank statements, copies and notes of correspondence between you and the tenant, a copy of the written eviction notice, and proof of delivery.
Step #7: Evict the tenant
In many cases, a tenant being evicted will not show up for the court hearing, and the odds are the judge will rule in your favor. If the tenant does appear, the judge will listen to both sides, and most likely rule in your favor provided you’ve done everything right.
The tenant will be ordered to vacate the property, and you may need to arrange with local law enforcement such as the sheriff’s department to remove the tenant from the property if they refuse to leave.
Step #8: Obtain a judgment and collect past due rent
Depending on the local court system, you may be awarded a judgment for any past due rent and damages caused by the tenant. Other times, you may need to file a separate lawsuit in small claims court.
Either way, you will need to hire a collections agency or attorney to collect on your judgment. The collections agency will report the judgment to the credit bureaus, skiptrace the tenant if they have disappeared, garnish wages of the tenant if they are employed, and file a claim on any other assets owned by the tenant.All the best!
NETWORTH BUILDERS5236 Reviews - Rental Property Investor · San Francisco Bay Area · Member since 2022 · 1k+ posts · 1k+ votes3y
Quote from @Blake Kirby:
@Becca F. thank you for your reply. All seven are at 990. I manage the property myself and budgeted for basically nothing, my number is to only cover the mortgage. I thought kicking the tenants out, would be easier honestly. Live and learn. If I get every unit up to market value I will be turning a profit. Besides lease violations do you have any other suggestions to get them out?
I 1031ed the one house for seven units so I thought this was a great move. It’s still Can be if I can get the rents up. I have faith. And with you guys I have support.
I guess I also need to ask everyone if they have any recommendations for eviction attorneys, and a general contractor for “substantial renovations” in L.A.Now that you explained that you 1031'ed a house for 7 units, that seems like a good deal, without seeing all your numbers. I don't have any suggestions for getting them out. I've dealt with my own tenant issues in the Bay Area of trying to evict in a pro-tenant city. I had just cause for eviction (late rent) but a Property Management company suggested that if I try to evict to talk to an attorney. I'm working out the issue with my tenants and they're paying the rent on time now.
Have you talked to the tenants about raising their rent? When do their leases expire, sometime this year? Going from $990 to $1800 is almost doubling their rent. You could try incrementally increasing their rent, like $200 to $300 per month each year? But by then the market rate rent would be higher than $1800 a month in 4 years. Is there rent control with your 7 unit? I would suggest talking to an experienced PM company for advice, which would be free (that PM didn't charge me to talk with her). If they can't help you problem solve, maybe talk to an attorney. Good luck.
- Realtor · San Jose, CA · Member since 2015 · 318 posts · 154 votes3y
I read this post out and you have some work to do. It sounds like you already bought the property, so you need to work with what you have, but before you do any other actions you need to do more research. Some of the statements you are making are risky roads for a landlord in California.
I have done cash for keys in the past and I understand it well. I did them at a time where cites didn't have set limits for the minimum you have to offer. I operate in the Bay, but when I was looking at purchasing in LA, I read up on the minimums and actually LA was probably one of the first cities to have a minimum amount you have to pay tenants on tenant by out. Without looking it up, I would say its around $10K per unit. Then if you have people in what they call protected classes it is higher. Examples: Senior citizens, children, disabilities. You will need to go to the city website and look up the amounts.
You will have a challenge paying these tenants to move if all 7 units are family and related. They will discuss terms together and if they even decide to accept the idea of moving, giving we past a market when people were paying $25,000 a unit to buy people out because the appreciation was so good, they may expect high numbers from you.
If you are not prepared to shell out a lot of money for the buy out process, then you will have to go with the rent increase method. LA has maximums on how much you can increase the rent each year so look that up. You will need to know when their rent was last increased, increase each unit as soon as you can, for the max amount. If they stop paying rent that maybe in your favor, then read up on how to properly do evictions and work with a specific eviction attorney that does only elections in LA.
Lease terms will not matter, you cannot evict them just because their lease has expired. You will need to look up the current "just cause" ways to evict tenants and try to have documentation to support your case for those. But I will say the easiest method of eviction is non payment of rent.
Also, I would avoid putting more money into the property for any kind of renovations until you either get all the tenants our or their rents go up because you will waste the money and not make a return on it. It is very unlikely you will get a capital expenditure "substantial renovations" rent increase approved post pandemic. Therefore, only put money into safety hazard repairs, so the tenants cannot say you are a slumlord.So another method might be, if you exhaust the options above you can speak to the tenants and see if they will sign a new lease paying market rent, for you to renovate their units. If you do this method make sure they sign agreements in advance of any upgrades and I would get an additional deposit from them, so that you know they are serious about it.
Remember these people living in your property are human and have emotions just like you and I. Play to that. Come in as someone looking to help them solve problems they may have or improve their quality of life. The way the conversation goes will make or break you, seriously. You do not have to give them everything they want, but they should feel heard and should feel like you genuinely care.
Good luck and keep us updated in how it is going.
- Handyman · Orange County California · Member since 2019 · 9 posts · 2 votes3y
@Osazee Edebiri I cannot tell you how much I appreciate you seriously. I’m not super new to land lording but the laws are crazy. I’ve never had to do cash for keys but I found out the minimum is $22,000. I had no idea! I also think it’s crazy that they have a law for cash for keys! The remodel for a new lease is genius! I’ll be able to present multiple options to the tenants. Is there anyway we could link up? I would love to ask you a couple more questions. I do know that these people are human. Of course I am not trying to take advantage of them. I just need to stop hemorrhaging money on this property. I’d love to make it a win-win for everyone.
Since this is a MTM lease, its not really an eviction, its a lease non-renewal. Even in CA doesn't that offer you more latitude to get them out? 90 day notice you wont be renewing their lease, so you can do renovation of each unit
I'd hire a local eviction attorney to run down your options and follow what they say. This isnt a DIY situation in my opinion.
- Realtor · San Jose, CA · Member since 2015 · 318 posts · 154 votes3y
Quote from @Blake Kirby:
@Osazee Edebiri I cannot tell you how much I appreciate you seriously. I’m not super new to land lording but the laws are crazy. I’ve never had to do cash for keys but I found out the minimum is $22,000. I had no idea! I also think it’s crazy that they have a law for cash for keys! The remodel for a new lease is genius! I’ll be able to present multiple options to the tenants. Is there anyway we could link up? I would love to ask you a couple more questions. I do know that these people are human. Of course I am not trying to take advantage of them. I just need to stop hemorrhaging money on this property. I’d love to make it a win-win for everyone.
Yes, most definitely.
Are the tenants not paying rent for some or all 7 units? I don't think a minimum is crazy, but $22,000 is outrageous.
- Real Estate Agent · Puyallup, WA · Member since 2022 · 551 posts · 379 votes3y
I don't know if I would consider someone a "good tenant" if they are only paying half of what market value rent should be. If they can't afford market rent then they should move somewhere that they can. It is not your fault someone can't afford higher rent.
- Property Manager · San Francisco, CA · Member since 2017 · 74 posts · 71 votes3y
Los Angeles is almost identical to San Francisco in their eviction laws. I cut and pasted the allowable reasons for eviction from the Just Cause Ordinance for LA County which I think you are already familiar with.
I have been a property manager in rent/eviction controlled cities (SF, Oakland) for many years and I can echo what most people are telling you here. If the tenants are paying their rent on time then a buy-out (cash for keys) is probably your only realistic option.
The courts will take a dim view of a landlord who attempts to evict on a minor lease violation. The law says tenants are allowed to cure lease violations in any case so that is not a realistic path unless it's something major and remains uncured.
Tenants at 50% of market rent are common in rent controlled cities and the farther below market they are the more motivated that are to keep their apartment.
There is a rough formula that developers will use as a starting point for calculating a buy out which is basically 3 years of the spread between market and existing rent. In your case that would be about $32,400 (36 months x $900) but sometimes tenants will take less if they are already thinking of moving. But often they won't move unless it's significantly higher. 6 figure buy-outs are not exactly rare in SF.
- Failure to pay rent
- Failure to cure a violation of the rental agreement
- Creating a nuisance or causing damage to the property
- Using the rental unit for an illegal purpose
- Failure to renew a similar rental agreement
- Failure to provide the landlord with reasonable access to the rental unit
- The person at the end of the lease term is a subtenant not approved by the landlord
- The owner or immediate family member will move into the rental unit
- Resident manager will move into the rental unit when required by law or by an affordable housing covenant or regulatory agreement
- Demolition, substantial remodel, permanent removal from the rental market, or conversion to non-residential
- Government order to vacate
- HUD owns and is selling the property
- Residential Hotel being converted or demolished
- Conversion to affordable housing
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