All Forum Posts by: Peter Stewart

Great job so far Sam! Really appreciate all the detail and photos. Very informative!!

I'd say solid C area. I had clients who lived on Eastbourne just S of 46th. They moved because they felt a bit unsafe. And I saw a drug deal go down at the gas station at 42nd and Emerson in broad daylight.  The farther N go you, the better it gets. There are some decent blocks for sure.  

Here are the ones endorsed by our local CIREIA:

http://www.ethositypropertymanagement.com/

http://www.indianapolispropertymanagementinc.com/

Many agents also love and recommend Dan Baldini with Polaris Management (https://polarismanage.com/)

@Matt Shields good call, definitely need to keep the tenants at arms length.

@Caleb Heimsoth & @Amy Beth I definitely understand the benefits of a PM. One day when my portfolio is big enough I will hand all the properties off. For now, I'm bootstrapping it. Lessons have been learned, hence this post, so going forward my operation will be run strictly like a business, which should help mitigate some of the issues I've been encountering. But, as we all know, these types of issues are just part of the landlord life!

@Jim K. Totally right. In fact, I even told my attorney the other day that I finally have my own landlord horror story. Been smooth sailing for me for the last 7 years, so it was only a matter of time!

@Rhonda Wilson I love the cash for keys idea. I've heard multiple mentions of that strategy on the BP podcasts. In hindsight, that may have been the way to go. This particular tenant kept promising me he'd be out voluntarily. Multiple times in text and to my face. In fact, the last time I saw him he stood in front of me, looked me in the eye, apologized, and promised he'd be out the next day (this was the 4th time he said that). The next day, he was still there and he blocked my phone # so I couldn't contact him. That's when I went straight to my attorney and started the formal eviction.

@Dennis M. Great advice - it's definitely challenging separating out the emotion from it. Takes a lot of practice. But you're right, once you view it rationally like that, it can remove the emotion and put you in a position to learn and grow from it (which is exactly what happened to me here). 

That was the text I got from a tenant at 730am last Friday morning. They live in a 4plex I own nearby. What a way to start the day! 

Here's some backstory before I get to the details - I am in the process of evicting one of the tenants in that 4 unit for multiple lease violations (non-payment of rent, installed a window a/c unit and has not taken it out despite multiple warnings, and has had 2 people living in the unit who are not on the lease for the last 6mo). The tenant is a real piece of work - an alcoholic, a druggie, and a total liar. And, the two people living with him are now wanted for aggravated assault. One of the two stabbed someone at a gas station - I recognized them from the news article (they had security footage), and they've been turned in to the police (the police have all their info, but haven't acted on it yet). Needless to say, these are not good people and I need them out.

Note - This is my first "real" eviction. Have the hearing this coming Thursday. 

When I got that text I immediately hopped in the car and drove to the property (~7min away). I was able to catch the officers before they left the property. Apparently for 3 days in a row these lovely tenants have had a homeless person living in the basement of the property (one of their druggie "friends", I'm sure). And this particular morning he was extremely inebriated and decided to scream at the top of his lungs at 730am, scaring the crap out of my other tenants (I'm told multiple calls went in to police). I'm told he sounded "demonic". The tenant I'm evicting "claimed" him and told the cops he could sleep it off in his unit. I tried to have him trespassed to no avail....When I went to check out the basement to make sure there was no damage there were 4 Loco cans everywhere. Based on this guys behavior, there was more than that involved. And yes, I immediately changed the basement lock and didn't give the bad tenant a key copy.

So, what is the moral of this story and why am I telling it? Several reasons:

1. Trust your gut. I knew from the beginning this tenant was no good. But, he was an acquaintance from high school and I had a few people vouch for him. In my gut I knew not to lease to him, but I didn't follow it.

2. Diligently screen EVERY tenant, no matter who they are. I didn't vet him at all (no credit or background check, etc). I went off the "word" of two people. Surprisingly, these two people are not interested in now reimbursing me for the unpaid rent, attorney fees, and damages to the unit :)

3. Treat your rental properties like a business, not a hobby. This is probably my biggest mistake. I am a full time realtor and this is my main source of income. But, I do own multiple rentals and I'm on a path to purchase 100 units in the next 5 years. So, it's imperative that I treat it like the business it is. I was WAY too lax with tenants, allowing them to pay late, pay in installments, etc. Establish clear rules and boundaries, and don't deviate from them, no matter what. 

4. Train your tenants from the beginning. If you give an inch, they'll take a mile. Set clear rules and expectations with them in the beginning. These people are your customers, not your friends. Treat them as such. Don't let them cross into the "friend zone", or even get close to it. It's tough, but you have to remove all emotion from this side of the business. It's something I've really struggled with in the past, but this lesson has opened my eyes and made it very easy to make the change.

Although this problem tenant has been just that, I almost have to thank him. He has taught me so many lessons to apply to my business, I will be benefiting from them for the rest of my life and undoubtedly will gain far more $$ from the lessons than what this tenant has cost me.

Don't try to be a "nice" landlord - you will get taken advantage of. Hold them to the contract they signed (lease). Begin the eviction process as soon as you are legally allowed to. Make no exceptions. You have to train your tenants and set a precedent from the outset.

If you are a nice person who doesn't like confrontation, then you can hide behind the lease and your attorney. There are a few BP podcasts that discuss this.

I'm a bit fired up on this topic because I'm going through an eviction right now on a tenant that I had been way too nice and lenient towards, and he lied to my face and in writing multiple times, disrespected me, damaged my property, and as of this morning owes me a couple thousand dollars and is squatting in my unit. So, my attorney is processing the eviction and I'm going to sue him for everything I'm legally allowed to (damages, late rent, attorney fees, etc). 

I'm not saying you have to be a jerk, but, you really have to keep in mind you are running a business and treat it as such.

I am in a similar situation. Won't go into all the details, but one of my tenants has given me a sob story and can't pay rent but has 2mo left on the lease. 

Luckily, the tenant is cooperative and is voluntarily moving out. I'll be keeping their EM deposit to cover turnover fees and if there is any left it'll start making up for the rent not paid. 

I could go through the whole eviction process and go to court to try and get the money. At the end of the day, I think it's a waste of my time. I'll never see that money, and I'll spend a lot on attorney fees, digging the hole deeper. Right now they owe me $1300 (back rent for June and July's rent). I'll spend at least that amount on fees coming after the tenant. Sure, I have every legal right to nail the tenant to the wall, but after weighing the pros and cons, I made an executive decision that it's just not worth it. Cut my losses and move on as quickly as possible. 

After reading what @Ryan McKelvey suggested, I think I'm going to go that route (payment plan after closing....but will pursue legally if agreement not honored). Great advice there. 

One thing I have learned from this experience that I will be applying to my rentals going forward - treat it like a business and hide behind your lease and attorney. No leniency on late rents, etc. I've been taken advantage of too many times by tenants. Sure, you feel like a jerk, but if you separate the emotion out of it and treat it strictly as business, it makes those tough convos/decisions easier. 

As an agent and investor I love working with wholesalers. The legit ones (see threads above for clarity on this). What agent wouldn't? They bring me additional deals that I can sell to my investor clients, and I can scout opportunities for myself as well. 

Tap into that equity with HELOCs and either use it to do some flips to generate additional capital, or use them to buy more properties (look out of area or state if the local market doesn't make sense).