All Forum Posts by: Shaun Patterson

@Charlotte Edwards I know this is stepping on another PM's work but I would first ask myself a few questions. Is he treating this property as if it were his or if his job is just to collect rent and pocket the difference. If it is the latter then fire him. A PM is technically the CEO of your business. Would the CEO of one of the big hotels skimp on the wording on the ad that he uses to attract good tenants? No he wouldn't, and this person shouldn't be doing that. Also your type of advertising will get you certain kinds of people based on how it looks and where you are posting. If you're saying that mostly section 8 people are applying then thats a red flag. Also ask if he is charging a application fee for every one that applies and ask how much it is. One trick that a lot of bad PMs use is that they will use the adds to pocket the application fee money before they actually start looking for good tenants. For example $100 fee X 10 people that never qualified to begin with is 1,000. This happens alot in section 8 housing. 

@Barry H. Ill give you a situation that happened. Tenant gets routing and account number to make a deposit. He passes the info than on to his friend that friend goes to the bank and gets the address that the account is listed on(yes they have some smooth talkers and some banks write down your address on the deposit slip) He now has your name or the business name the address and account info and starts paying transactions through the account. The owner of the account only checks the account once every few weeks to make sure that the rents are in on time and finally see the charges on the account. Some people might not think this is anything bad or crazy since the bank can dispute the fraudulent charges. But IMO the time and headache for all of that to be done sometimes is more than it would take to  just protect yourself in the future.  I used to work for a big bank and seeing things like this happen always made me fearful of giving my account info out. 

if you are accepting pets are you adding the pet deposit or fee? Cleaning up after pets is a job in itself. weather its a service animal or not. I don't like stating that I will hold rooms for tenants because that means that you wont be charging them anything until the move in date. What if you get a tenant that is better qualified and ready to move in? you can't do anything because you're holding the room for someone that you can charge rent for yet. I would take that part out and if someone wants to hold the room have them sign the lease and tell them they can move in when they want but they will start paying rent from the date the lease is in effect.  The market right now for rentals is kind of strong so those holding options only need to be used when you don't have that many rental applications. Do you also accept self employed people? What about business owners? You have to be able to go through and check every type of tenant. Some of the best ones might not have a 9-5 job but make enough stable income throughout the year. But this also depends on where the property is located. 

I know in florida any official notices have to be mailed and served to the registered agent. if the tenant is a business make sure that you take that into account. Also as @Karl Dowden said talk to a lawyer with experience in commercial evictions. if your not sure a simple way to do it is check the courthouse records on evictions and see the lawyers who are doing all the evictions in your state. Give them a call trust me they love talking to landlords. 

It sounds like you got hit by a professional tenant ether them or someone they know. There are a lot of good eviction attorneys that will answer questions for free as long as when their is an eviction they get to handle it. Our company makes sure that we always contact our attorneys in the event there may be a issue just to double check that we aren't missing something that could slow down an eviction.  In florida tenants can not pay rent if they use that money to make repairs that landlords have not. If they are just asking for a rent reduction due to the repairs not being done and them not using that money to get the repairs done them self it's an big red flag. But I don't know the law in your area. You now know to stop taking partial payments from now on because they will use that in court. start charging fees for paying late whatever is applicable in your area since some states have limits on how much can be charged. Follow exactly what was written down in the lease and nothing more. anything else will get you into trouble. If the chainsaw wasn't part of the lease agreement then dont include it. if your suppose to clean up something with that chain saw you do it. or hire someone. Give them the correct notices of entering and leaving the premises provided by law. This was a great teaching experience for you. I wouldn't look at it in a bad way and look at it as just another course that you took in the school of real estate!!!

@Deanna McCormick is right if the utility bill is not in your name you can't take anything from there SD. It's their bill it will follow them or the utility company will send it to collections. 

I would say you should have a separate account for this. our company sets up everything electronically now so we don't even take checks or cash from clients. There can also be a lot of issues with giving people your account information. Fraud is everywhere especially in the real estate community. @Jordann B. from cozy sounds like a good fit. Another option I would add is if you use quickbooks for your accounting they have a feature to send out invoices. This can be sent to your tenants and they can pay from their. Through ach or credit card. It doesn't show your account information at all.  

Another way you can set this up is by giving them options. One is to get an actual 1 year lease in place at the current rent they are paying plus 50-100 dollars. After that you want slowly raise rents every year. You then can also offer a 6 month lease at a higher rate but not as high as the market rate. Then the month to month rate at the full market rate. If I had been in your position I wouldn't have good tenants on month to month leasing at way below market rents. In that situation they have the upper hand on rents and being able to move out whenever they want. They will ether pick one of the options or give you the 30 day notice to move out. If the rental market is good in your area then just rehab and rent out at market rents. 

I would give you another eye to look at. He stated a few things that came off as red flags for me. One he has a wife. That means that she may end up staying at that apartment at some time or another. No matter if he says they aren't living together. I never fully believe what tenants say because in my experience its never the full truth. What happens if they suddenly get back together and she moves in without you knowing? Even if you see her he can use the same excuse that was used before, that she is the wife that is living somewhere else and just stopped by for a few days. If this situation happens and she decides not to leave the apartment even after the lease is up you then have to deal with a squatter that has no signed lease but has emails stating that she wanted to be on the lease and was denied. Also I would agree with @Account Closed the background screening was kind of lax here. When we screen our tenants we check county records and ask question about being married. if you asked that question and they said no then they lied of the application and could be in breach of contract.

In my opinion it would depend on when the tenant is moving out. On month to month contracts they should be giving you at least 30 day notices before they are ready to move. Make sure your month to month contract states this. This will at least give you that much time to find a tenant. Now the question is are you charging a different rate for month to month rent to compensate for the predicament they have put you in. Also what is the timeframe for you to usually re-lease this same property during the time of year that the tenant said they would possibly be moving out. Since the tenant is on month to month I would let them know that you will be advertising for new tenants and there would be a possibility that they may not get the time frame they are looking for (this method depends on the type of tenants and if they are a good or bad tenant). Remember you are running a business you're not bending over backwards to help a leaving tenant hang out in your property for a undetermined amount of time while you wait for their letter telling you they are ready to leave. If it usually takes 20 days to get the property leased up then you don't have to worry as much and milk the higher rent until around the time they are suppose to be leaving. You can also set up a short term lease if they are staying month to month for at least 3-6 months. Get the information on when they think they will be leaving and plan from their. They should know this much.