Help! Our 1st Deal Buyer NOT paying - Posted by Chizu -WA- (*^_^*)

Real Estate Investing Vacation Rentals
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Posted by Chizu -WA- (*^_^*) on January 18, 2007 at 15:09:29:

Yes, Steve. Thanks for the call (:slight_smile:)

We learned NOT to give them a KEY for sure… w/o POA.

I think I’ll have Phil take the Notice to put on their door today.

We sold this unfinished Kitchen Counter. So Buyer said like she’ll take the “counter top” (they placed) she’ll take it with them if they move. (which… I really don’t know how she’d do… but try… i guess…) + Buyer said they’ll take Furnase broke 4 days after they moved in that apparantly they fixed.

Buyer paid Mobile Park. but Not to US. We’re learning that we weren’t “scary” as Park Manager.

Thanks Steve!

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Help! Our 1st Deal Buyer NOT paying - Posted by Chizu -WA- (:slight_smile:)

Posted by Chizu -WA- (*^_^*) on January 18, 2007 at 03:46:27:

We just did our 1st deal on Dec 24th.
Buyer was supposed to pay $500 Non-refundable down ? but only paid $400 at the signing and said they?ll pay $100 on Jan 1st.
Their 1st Monthly payment $250 was Due on 10th.

They called and asked if they can pay $100 (remain down pay) + $250 (reg. pay) on 10th. We said OK.
Now, it past 17th ? they haven?t paid. We sent them ?Late charge fee? letter along with the COPY of the Sales Agreement. (Highlighted ?late charge? portion to them.)
Also, we have sent them ?Pay or Quit? Letter to them also. (Sales agreement shows they were supposed to pay on $100 remain by Jan 1st, 2007)

At the time of signing Sales agreement, we asked them to get ?power of attorney for mobile home? (so we can transfer the title for them). Since they still haven?t done that ? title is under our name and regal owner shows in our name currently. (We weren?t able to complete title transfer because of that.)

Sales agreement shows failure to receive any payment within 10 days of due date ? will become ?default?. It this means ?REPO? at this time??

We have talked to Buyer today (yesterday?? Oops?..it?s past 1am?.). Buyer was coming up with all kind of excuses?. We made it very clear to them ?Pay or Leave?. (Not in the rude way…) Buyer said ?oh may be we should pack and move out because?? (started to point out other problems in properties?)? We have already took our money to fix some of the problem after the ?sale?. (since problems happened right away) so, we reminded them we sold it ?AS-IS? and we?ve done our portion but they haven?t.

20th is the ?10th day? ?. So we let them know to let us know by 20th and communicate with us with their decision. (hopefully they?ll just move out.)

I?m worried if they decided to ?damage property? and leave. Is there a WAY to report ?late payment? and ?abandoned w/ damages? if they decided to do that to MH???

Also any advises what we should do on this case??

Thank you very much for your time. (:slight_smile:)

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THANK YOU EVERYONE!!! - Posted by Chizu -WA- (:slight_smile:)

Posted by Chizu -WA- (*^_^*) on January 18, 2007 at 15:12:05:

Thank you so much for your advises.

Best way learning… by doing it. Hopefully not to make same mistake again.

Thank you.

But, Does anyone know how to “record” the late payment to anyone??? (for future if the same buyer tried to buy one of your mobile… so, Park Manager will find out they never paid???)

Chizu (:slight_smile:)

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Re: Help! Our 1st Deal Buyer NOT paying - Posted by Mike (N.Cal)

Posted by Mike (N.Cal) on January 18, 2007 at 09:23:27:

I agree with what everyone is saying. But you may want to consider giving them their money back as a way to get them out fast and without damage. I did this once and not only did they take great care to move quickly, I moved past it within a week or two.

Good luck

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Re: Help! Our 1st Deal Buyer NOT paying - Posted by Todd(AZ)

Posted by Todd(AZ) on January 18, 2007 at 09:04:04:

Wow, where do we start? I’ll let some other’s comment on your next move here but for the sake of those getting into the business I’d like to comment on a few things that work well for me.

  1. NEVER let anyone move in on a promise. Not until everything expected (in this case, $500)is satisfied. No furniture moved in either until everything expected is satisfied. They started out not abiding by your request of having $500…bad start. And, unfortunately, you let them slide and let them in with $400 and a promise. Again, bad start.
  2. Spend time when going thru the contract and zero in on your “late payment”/ deliquency clauses. EXPLAIN COMPLETELY what is expected of them and that they are expected to pay on time, every month, for the next X months/years. If not, explain what you do next. I go into great detail here. If they balk, then the time to say goodbye is right then and there. YOU ARE IN CONTROL. Do not become desperate to put anyone in your homes! I explain nicely, but firmly, that one good thing about going thru me for financing is that its quicker, easier, and poor credit doesn’t scare me. In the same sentence, however, I say that the bad thing about going thru me is that we reposses VERY fast. I explain if they are ever short on money, this is the ONE bill they will want to pay. I explain that, without a home, their cable bill, phone bill, electric bill, etc. are meaningless. I can’t say it enough…you set the stage with these buyers from the very beginning.
  3. At some point, one needs to quit worrying about being “rude”. THEY are the ones who are being rude by not paying on their obligation, especially so soon. I’m afraid they have sensed weakness and are testing you. The time might not be just yet, but, very soon you need to forget about being nice, take the gloves off, explain that not only are they soon to be out of the home but if they damage or remove anything on the way out the authorities will be called and you will press charges against them.
    Too tough? I don’t know but, personally, if I’ve explained everything fully up front and they start this crap with me its time to put the hammer down. If they haven’t complied by the 20th, it’s time to step it up. Just my opinion. Todd(AZ)
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I’ll call you today - Posted by Steve-WA

Posted by Steve-WA on January 18, 2007 at 08:52:58:

I believe I have Phil’s number

see? it ain’t all roses, is it! You can recover from this, and be better for it.

Re: the POA, never leave it to the buyer to get it done and get it back to you. They won’t. In the future, do your closing at their bank, or a RE office, or somewhere there is a notary. Have the DOL-POA form filled out except for their sigs, and get it done at closing.

You can’t hope - you need to be prepared for when they don’t move. Serve a Pay Or Vacate notice, and prepare to go to court for a writ of replevin, which will allow you to Repo, Repo, then evict. Better, talk to the PM - if they haven’t paid you, then maybe they havent paid the park either, and its easier for the park to evict (faster). Offer to pay their attorney costs. If nothing else, it is best to keep the PM informed of what is going on.

The Sales Agreement 10-day default is, at least in WA, counter too what the RCW says; its mainly there to convince your buyer of the consequences - if they believe it, then they will follow thru. But if you clear their crap out, and they take you to court, you will lose. Its all about control.

Lesson learned - do NOT give keys without full payment and paperwork being completed. “Sorry, company policy.”

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Re: Help! Our 1st Deal Buyer NOT paying - Posted by Ryan (NC)

Posted by Ryan (NC) on January 18, 2007 at 08:51:39:

Follow through with your actions, you are building the basis of how things will be… No pay, no stay…

This has the makings of a potential great deal to learn from regardless of what happens, they are going to learn that you are serious or you get the home back to sale again. Don’t worry to much over possible damages, as long as they are in and out quickly I’ve found damages to be a rare occurrence.

My advice is to be nice regardless of what is said or happens, If there is ever a legitimate reason (out of work in hospital and can prove it) then you can give a LITTLE slack otherwise “my partner doesn’t accept failure to pay so we need to get this worked out”.

I’ve found there are 3 common types of buyers & tenants in this world… Those who make their payments pretty much without fail every month and will contact you if there is a problem… Those who simply have a habbit of paying late every month, we have one in particular that knows when we file and will hunt us down the last day to pay… and those who just don’t intend to pay. (which are overall fairly rare with LD’s)

Start the proper paperwork to get the home back in the event that they don’t follow through with what they say…

Best wishes,
Ryan Needler

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Re: Help! Our 1st Deal Buyer NOT paying - Posted by Ken L

Posted by Ken L on January 18, 2007 at 06:16:34:

You know what to do. They are trying to condition you.

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Re: THANK YOU EVERYONE!!! - Posted by Sailor

Posted by Sailor on January 19, 2007 at 09:08:48:

For 12.95 you can report your tenant to www.MrLandlord.com, or
if you are willing to give up 50% of the potentially collectible debt,
you can turn it over to a local collection agency. It costs them
$$$ to report, too, so make sure they are willing to do that.

Good luck!

Tye

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Re: Help! Our 1st Deal Buyer NOT paying - Posted by Lazaro - NC

Posted by Lazaro - NC on January 18, 2007 at 10:14:32:

I definitely agree on #2

?2. Spend time when going thru the contract and zero in on your “late payment”/ delinquency clauses.?

I do this to EVERY SINGLE renter (although in this case they are paying a note), it does not matter who they are. I?ll go through a step by step of events leading up to eviction.

I am new to trailer notes, but with the rentals I do the following:

First, if they are going to be late, they need to call me ahead of time to work out the payment with me.

Then I tell them:
1.- Payment is due on the 1st.

2.- On the 2nd they will get a call from me reminding them they are late and a $25 late fee applies. In addition to the call, I send a letter stating what I said on the call. I?ll put a copy of the letter on their file.

3.- On the 5th, I send a certified letter giving them a 10 day notice, so they have till the 15th to pay or vacate the property (10 days notice as require in my county). I let them know I will be filing on the 16th at the court house.

I go over the steps with every single renter and follow through on every single step.

Thanks,
Lazaro - NC

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agreed - Posted by Steve-WA

Posted by Steve-WA on January 18, 2007 at 09:08:40:

true dat

;-)3