Posted by Wayne-NC on May 15, 2006 at 08:25:20:
Everywhere has it’s market values and the undermarket values. All those expenses you listed are priced into the market and just passed through to the end payor anyway. BTW, I really didn’t mean to move. The “grass is not always greener”. That was just a silly answer to the uneducated and really did not apply to the posters on this particular thread for sure.
tenants left without paying - Posted by James boyd
Posted by James boyd on May 13, 2006 at 21:54:10:
The tenants left without paying the back rent which was court ordered to pay. In addition they left about a dumpster full of trash and other items i guess they dont want (none of which are of any value) . I have tried to contact them, of coarse to no luck. I already video taped and took pictures of the property. In addition should i call the police and file a report of some sort? I’m sure i am going to have to take them to court for all the damage done to the property and hauling away the trash as well as the back rent. I know where they are staying (due to a phone call to me before they moved out and a reverse phone directory look up) but would rather just have my attorney send them a letter as opposed to me sending it to them. Any advise as to how to handle such a situation, would be great. 3 years in the business i have not had such an awful tenant, everyone says i have just lucked out so far =)
Re: tenants left without paying - Posted by Frank Chin
Posted by Frank Chin on May 15, 2006 at 07:55:47:
James:
I’m an active Landlord, but my first job out of college was consumer credit where as you might have guessed, many folks fall behind, and get sued. And judgments are just that, judgments. Most judgments remain “uncollected”.
Exceptions are if people work for major utilities, corporations, or the goverment, and plan to stay years and years. Even here, “deadbeats” had us beaten.
The major weapon is the “garnishee”, and unfortunately, the law only allows creditors to attach 10% of gross wages, and ONLY ONE can be in effect at a time, so creditors doing an “income execution” would wait in a que. Often, we find we may have to wait 10 to 20 years for our money.
Someone already having there wages attached, with a long line behind it is judgment proof. They also have the option of filing bankruptcy.
Consider yourself lucky that the tenant had left, even with a sorry mess as you described. At least you can “work fast” and have it re-rented.
Consider yourself “unlucky” if your tenant stayed “rent free”, fighting the eviction. Getting a judgment for 2 months unpaid rent is far better than getting one for 10 or 12 months, and unable to collect, and unable to pay your mortgage.
Hopefully, you collected a hefty deposit, and followed the procedures for keeping it, where in most jurisdictions, you write a certified letter, return receipt requested, explaining why you’re keeping it. Failing that, you’re not even entitled to keep it.
Having been in the consumer collection business, I had one tenant, started off good, who fell on bad times, and wound up owing me six monts rent at $1,200/month, totalling $7,200. And the time, he was behind with everyone else, sued left and right, finally filing bankruptcy.
And what would most creditors do?? Be nastier than the next creditor.
Being a little smarter, I told him that I don’t want to kick him while he’s down, and he can take care of me when “he’s got things straightened out”. And what’s the harm in doing this since I know I can’t get paid anyway??
Long story short, two years after he was evicted, he left an envelope with a $50.00 money order in the mailbox of the rental for me, with a note to my new tenant asking him to ask me to get in touch with him. He started paying me weekly, usually $50.00, sometimes more, till the balance was down to below $2,000, and then he paid me a lump sum to settle the rest.
At the time, I came by his place to pick up the final payment, and stayed around for the barbecue, and one or two beers.
And why did he do this?? He explained that everyone was yelling and screaming, calling for has scalp, and I stood aside and said "Dennie, take care of yourself first, get these people off your back, and get back to me when you got things straightened out.
Conclusion??
Reverse pyschology works well when nothing else does.
Frank Chin
Re: tenants left without paying - Posted by Mike-OH
Posted by Mike-OH on May 14, 2006 at 05:50:31:
I divide deadbeat tenants into two groups. Those with longstanding good jobs and those without. The 1099 works great for those without jobs, because those debts are uncollectable. Those with good jobs are easily collectable through garnishment. In Ohio, you will get 25% of their take home pay!!! I’m doing two of these right now.
Nothing will keep you from having future bad tenants. Good screening helps, but if you have a lot of tenants, you will have evictions, trashed houses, and deadbeats. Seemingly good tenants occasionally turn bad.
Unfortunately, it’s just part of the business.
Mike
Re: tenants left without paying - Posted by dealmaker
Posted by dealmaker on May 13, 2006 at 23:14:06:
I’ve never bothered taking them to court, IMO any deadbeat in America is judgement proof! That’s why 99% plus of all judgements are UNCOLLECTIBLE. I wouldn’t waste a nickel on an attorney at this point.
I would however have your attorney re-draft your lease to resemble my old one. My lease stated that the tenant agreed to TWO MONTHS RENT as LIQUIDATED damages for failure to clean, in addition to all unpaid rents.
I then mailed the departed tenant a 1099 showing the amount of INCOME, (foregiven debt is income) and telling them that the copy to the IRS would be going in the mail within 72 hours unless I heard from them regarding arrangements to make me whole.
Since deadbeats are deadbeats to all the creditors, there’s a good chance they already owe the IRS. I know that they may stiff me but the IRS has some advantages that I don’t. Knowing they’re about to get hassled by the IRS makes me sleep better.
Reasons the IRS is better at collecting debt than you will ever be!
BTW, once my lawyer rewrote my lease NO ONE ever flicked with me!
dealmaker
Re: tenants left without paying - Posted by James boyd
Posted by James boyd on May 15, 2006 at 21:34:34:
thank you for this advise. I will try this method 1st instead of going thru an attorney. Which will just cost me more money anyway.
Re: tenants left without paying - Posted by Joe
Posted by Joe on May 15, 2006 at 16:05:49:
Great thinking outside of the box Frank. Sure, there are plenty of people out there to take advantage of generousity, but sometimes a little bit will go a long way. You just have to read the situation and make a decision.
Re: tenants left without paying - Posted by MMiller
Posted by MMiller on May 14, 2006 at 05:59:18:
I just received a judgement collection course in the mail. It seems pretty easy to collect on judgements. Finding the judgements is the hard part. I figured if I just collected on my bad tenants it would be worth the cost.
Counterattack of the Landlords! - Posted by Wayne-NC
Posted by Wayne-NC on May 14, 2006 at 07:57:50:
Sounds like a movie that can be played over and over again. Why can’t you insert this remedy into your lease as a possible action right after your clause? This way you can simply write or call and refer them in a stern manner to, “See article 4, Section 5, Item #1” for example. A followup with the 1099 says now that you really mean business. I am using a trap method which may deserve mention here. I sued (by myself, no atty) only the husband on my first attempt. He had nothing and I knew that she had the more stable job. Now, 2 years later I sued the wife separately. I am counting on everything being put into the wifes name since. Now that they think it’s over, the trap is about to be sprung. The Writ of execution is the next step. This may take some time and patience but it just might work. I want the car. Chances are they needed another one in that amount of time.
Great Idea - Posted by Innovator
Posted by Innovator on May 14, 2006 at 01:25:46:
Way to go dealmaker,
That is a great post. This idea will work for any debt that someone tries to stiff you on.
Thanks for the great tip!
Re: tenants left without paying - Posted by Vaughn
Posted by Vaughn on May 13, 2006 at 23:36:47:
Where were you about two years ago! Not only did I have a similar experience, but waisted time and money on an attorney that did nothing for me. Great plan!!
Re: Counterattack of the Landlords! - Posted by dealmaker
Posted by dealmaker on May 14, 2006 at 09:25:20:
Going after the car may work in your state, but in TX virtually anything and everything they own can be “exempted”. You can’t get the car, clothing, family bible, anything involved in preparing and serving meals, or anything that’s “work related”. I could go through my house right now and exempt EVERYTHING I OWN under one of those.
That piece of expensive artwork (in my case it was about $150 that I spent on something my wife and I really liked, that’s my idea of “expensive” art), well I’m an ART CRITIC. See I’ve posted a couple of pieces on online sites about art, so IT’S EXEMPT.
That’s TX for you.
dealmaker
One Word Answer - Posted by Wayne-NC
Posted by Wayne-NC on May 14, 2006 at 09:55:26:
Move! Aside from that, can you garnish the wages? Can you at least force a lien on the vehicles they own with your judgement? You are not taking it, just getting paid when its sold. Be sure to be added onto the insurance policy or force place it. Lenders (which you are by your own admission and according to the IRS) do it all the time. That will cost 'um bigtime. Everything being exempt sure made you resourceful. Turning the IRS into unlikely allies is the ticket. In NC, we cannot garnish.
Re: One Word Answer - Posted by gerald(tx)
Posted by gerald(tx) on May 14, 2006 at 12:46:30:
Move?
What? And give up our 3%, highest in the nation, property taxes?
And our 1%, highest in the nation, title insurance?
No, we can’t garnish wages, either. And yes, Texas BK law sucks. And appreciation crawls at a snail’s pace here.
But you know something? In spite of all this, somehow we Texans are still making great money in RE.
gerald