Deadbeat Investing
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Deadbeat Investing (by NE [PA]) Apr 12, 2018 4:40 AM
       Deadbeat Investing (by NE [PA]) Apr 12, 2018 4:48 AM
       Deadbeat Investing (by myob [GA]) Apr 12, 2018 5:03 AM
       Deadbeat Investing (by S i d [MO]) Apr 12, 2018 5:37 AM
       Deadbeat Investing (by WMH [NC]) Apr 12, 2018 5:57 AM
       Deadbeat Investing (by Mary [MI]) Apr 12, 2018 6:14 AM
       Deadbeat Investing (by RB [MI]) Apr 12, 2018 6:29 AM
       Deadbeat Investing (by Nicole [PA]) Apr 12, 2018 6:55 AM
       Deadbeat Investing (by Sisco [MO]) Apr 12, 2018 7:17 AM
       Deadbeat Investing (by Johnny B. [MA]) Apr 12, 2018 7:26 AM
       Deadbeat Investing (by Oregon Woodsmoke [ID]) Apr 12, 2018 11:41 AM
       Deadbeat Investing (by Beth [WI]) Apr 12, 2018 12:38 PM
       Deadbeat Investing (by GKARL [PA]) Apr 12, 2018 12:53 PM
       Deadbeat Investing (by Andrew, Canada [ON]) Apr 12, 2018 2:33 PM
       Deadbeat Investing (by Mary [MI]) Apr 12, 2018 6:32 PM
       Deadbeat Investing (by JB [OR]) Apr 12, 2018 9:05 PM
       Deadbeat Investing (by JW [WI]) Apr 13, 2018 8:45 AM
       Deadbeat Investing (by Dan [IL]) Apr 13, 2018 9:03 AM
       Deadbeat Investing (by Nicole [PA]) Apr 13, 2018 9:06 AM
       Deadbeat Investing (by NE [PA]) Apr 13, 2018 9:20 AM
       Deadbeat Investing (by GKARL [PA]) Apr 13, 2018 10:25 AM
       Deadbeat Investing (by NC INVESTOR [NC]) Apr 13, 2018 2:26 PM
       Deadbeat Investing (by Nicole [PA]) Apr 13, 2018 2:58 PM
       Deadbeat Investing (by GKARL [PA]) Apr 13, 2018 4:06 PM
       Deadbeat Investing (by GKARL [PA]) Apr 13, 2018 4:06 PM
       Deadbeat Investing (by GKARL [PA]) Apr 13, 2018 4:07 PM
       Deadbeat Investing (by Busy [WI]) Apr 13, 2018 5:21 PM
       Deadbeat Investing (by razorback_tim [AR]) Apr 15, 2018 4:20 PM
       Deadbeat Investing (by micky de [IL]) Apr 20, 2018 10:37 AM
       Deadbeat Investing (by Redd [SC]) Apr 24, 2018 3:02 PM
       Deadbeat Investing (by micky de [IL]) Apr 25, 2018 7:32 AM

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Deadbeat Investing (by NE [PA]) Posted on: Apr 12, 2018 4:40 AM
Message:

On the opposite end of the spectrum from the desirable tenants that we all want, there are "the other people".

What tactics do you all use when renting to deadbeats? The no hope folks. The last chance people.

These are the ones who live in the properties that you are afraid to admit you own.

Some people seek this tenant as a niche and it isnlayer by a whole different set of rules than what we discuss here most of the time.

My tax deed house for example has a deadbeat in there who I know will need constant management. If she leaves, I will be seeking another manageable deadbeat for this unit, because I'm not putting any money into this house other than safety.

So what are the low end tactics?

--50.107.xxx.xx




Deadbeat Investing (by NE [PA]) Posted on: Apr 12, 2018 4:48 AM
Message:

isnlayer = is played. --50.107.xxx.xx




Deadbeat Investing (by myob [GA]) Posted on: Apr 12, 2018 5:03 AM
Message:

NE I don't have any property's i'm embarrased about. My heart doctor on the other hand said he won't even drive by his property's because he's so ashamed of them. (someone manages them for him)

I would put the person with the best job in those property's. (AKA collectable) lower the rent. This property isn't making you enough rent as it is so why not make it in collections? --99.103.xxx.xxx




Deadbeat Investing (by S i d [MO]) Posted on: Apr 12, 2018 5:37 AM
Message:

I hear what you're saying...

I try to run a tight ship, but I agree with you NE that some of the folks on here who run very tight ships probably don't own some of the types of houses we do. I have a few that are Class C-.... I keep them safe, functional, and clean, but the applicants usually have bad credit, some criminal past, semi-stable jobs (or other), and no LL refs (living with parents).

Like myob says, I look at income first...LL refs next...criminal next. Basically, all my criteria apply as usual, but I know in my heart that probably 1 in 5 will end up being evicted or will do a midnight move-out before the 1st year lease is up. It's just part of the deal with this crowd.

Others have encouraged me recently to find better properties, and I'm considering selling a few dogs and trading up into legit Class C/C+ hoods. Maybe even a B-. I like the cash flow off of these, but the management is definitely more intensive. The good news is once I FIND a decent one (i.e. the 4 of 5 who don't get evicted or midnight move out), they tend to stay because they actually are decent folks and they're tired of being worked over by the scumlords.

There aren't many LLs who invest in the market I do AND who try to do it the right way. It's a challenge, but on the balance it works out.

Fun story: I did my first abandoned clean out the week without waiting for the court date to roll around. Neighbors said he was gone...hadn't seen him in 3 weeks. Rent was more than 30 days past due. We talked to his boss and he said they had to lay him off due to lack of work and he went down to Florida. Court is next week. Handyman and I did a walk thru a week ago... a few things left: ratty old bed, a few articles of clothing, some (potentially) edible food. I told him to go thru again and see if anything changed. Nope. Cleaned it out. You may hear of me getting sued soon... (wink) But I doubt it. Most of the LLs in the hoods I'm in say this is how they do it. They don't even file evictions: just wait 3-4 weeks and clean the place out. As you say, "It's how business is done" in these hoods. --173.17.xx.xx




Deadbeat Investing (by WMH [NC]) Posted on: Apr 12, 2018 5:57 AM
Message:

I don't think we have anyone anymore that is that type. Even our crappiest properties in the worst neighborhoods are fixed up enough to attract decent long-term tenants.

Many had zero to bad credit initially though, which doesn't bother me because it means they have to pay their rent because nowhere else to move. --50.82.xxx.xx




Deadbeat Investing (by Mary [MI]) Posted on: Apr 12, 2018 6:14 AM
Message:

When I knowingly rent to a dead beat I pay close attention to this tenant. As soon as something is amiss I check it out to see if they are in violation of the lease. If the rent is a day late they receive a notice and I usually I get them out before the end of the month and before they use up the security deposit.

I rented to a questionable family that lived with his parents. They wanted a place so they could start a FRESH. Parents were 'helping' and I thought there was a 10% chance of success. Well they lasted about 4 months and the rent started to be late.The parents helped them for about 3 more months, but soon she was gone. It seems she went to the drug store and did some shoplifting and was in jail and the husband moved out with the baby. After they moved I found the garage full of stolen goods (shoplifting) Everything in the house and garage was stored neatly and organized. I later learned that they spent a lot of time in jail.They left most of their belongings, but everything was neat as a pin. Every cupboard was neat and the place was spotless and that was a surprise. --68.32.xxx.xxx




Deadbeat Investing (by RB [MI]) Posted on: Apr 12, 2018 6:29 AM
Message:

I think your referring to My "Project House".

I could write a Book on the characters that have

come and gone through that one. (Built in 1900)

"Ya put the Lime in the Coconut"...............

--47.35.xx.xx




Deadbeat Investing (by Nicole [PA]) Posted on: Apr 12, 2018 6:55 AM
Message:

you collect rent (in person) per the schedule of their income...not the various payment plans that the upcharges make the landlord money but $500 divided by 4 = $125 a week cash.

you become their "friend" ... yes, they will try to get over on you and lie when their mouths open but you learn to figure out enough of the truth.

you spend time at the property doing "something".

NE - I seem to recall you don't like interaction with tenants ... this very lower end require constant attention.

Yesterday I gave a lady potting soil (taken from an empty place) and two brand new flower pots (taken from the empty place)... gave her two packets of flower seeds I had left over from last year and you would have thought I was the Easter Bunny, tooth fairy & Santa rolled into one.

Would she $crew me over if given the chance? absolutely but because I'm working in the neighborhood daily, I see the comings and goings and know that the husband, who was always there all day long, is now (at least his vehicle) gone a lot. I will casually bring this up in conversation in a round about way so I'll know if he actually has a job or is gone and only comes back to see the kids and to "visit" her.

you see their garbage level ... is it consistent weekly.

you see any immediate damage.

And when it's time for them to go? They will absolutely go without paying but you won't have malicious damage because you've treated them right.

place I'm working on now - needs flooring desperately. We tacked down marine carpet and put left over metal transition strips in places they shouldn't have been. Looks tacky as can be. Lady from down the block came up to look at the progress and gushed about how wonderful it looks ... because it's new. I asked her opinion on kitchen paint ... I only do kitchens in green or yellow so it didn't matter that she picked the yellow. Wait until she sees the yard sale curtains go up tomorrow! I guarantee she is my biggest cheerleader on the street gushing about "oh, how nice Miss Nicole makes her places" ... and she doesn't even rent from me.

Hands on is the answer to all this rant and babble. --72.70.xxx.xx




Deadbeat Investing (by Sisco [MO]) Posted on: Apr 12, 2018 7:17 AM
Message:

I don't do well in this sector. The buy-here-pay here car dealers have some interesting methods/measures.

The salesman is also the collector. The salesman handles 70 customers.

The salesman manager measures "recency" which is how recently have you had contact with customer? They require contact-in person/phone/text every 48 hours.

The sales lot grills hot dogs on friday afternoon to encourage customers to stop in(and make payment. --72.172.xxx.xx




Deadbeat Investing (by Johnny B. [MA]) Posted on: Apr 12, 2018 7:26 AM
Message:

Weekly rent so you can keep a tight leash on the payments. This will also equate to more money over the course of a year as opposed to monthly rent, so that helps to offset the extra time you will spend on oversight. --107.77.xx.xx




Deadbeat Investing (by Oregon Woodsmoke [ID]) Posted on: Apr 12, 2018 11:41 AM
Message:

I don't deal with them

But someone has to provide housing for them and I know there is money in it. Houses can be purchased cheap in bad areas with rent levels that are pretty generous considering how much the house cost.

But I don't do stress, so I stay away from that market and screen hard to keep that type tenant out of my rentals. A lot of those loser types are trying really hard to get into nice houses. --174.216.xx.xx




Deadbeat Investing (by Beth [WI]) Posted on: Apr 12, 2018 12:38 PM
Message:

You might find the book “Evicted” by Matthew Desmond an interesting read. He wrote about 8 households in Milwaukee that were evicted. He actually lived in 2 different areas and got to know both the tenants and 2 landlords well. This was definitely low, low-end housing. --24.177.xxx.xx




Deadbeat Investing (by GKARL [PA]) Posted on: Apr 12, 2018 12:53 PM
Message:

This is an interesting discussion. I don't know if I could handle dealing with this type of tenant in a SFH. --64.121.xxx.xxx




Deadbeat Investing (by Andrew, Canada [ON]) Posted on: Apr 12, 2018 2:33 PM
Message:

In ontario I would not and do not touch that market under any circumstances. Landlords here dont have the protection that you guys do.

A deadbeat tenant here can literally cost an ontario landlord tens of thousands of dollars with little hope of ever collecting on a judgment.

Best just to not provide the tyoe of housing that would attract this type of tenant. --70.48.xxx.xxx




Deadbeat Investing (by Mary [MI]) Posted on: Apr 12, 2018 6:32 PM
Message:

It is true, that Landlords have NO protection in Ontario and I also would not consider anyone less than perfect, because you could lose thousands of dollars.I have been in court with Ontario tenants and Michigan tenants and have never won a case in Ontario. There are an abundant of tenants but few rentals because few people want to be a landlord in Ontario. I understand that this year the government has put out a lease that Landlords must use. --68.32.xxx.xxx




Deadbeat Investing (by JB [OR]) Posted on: Apr 12, 2018 9:05 PM
Message:

I think you already know that all you really can do is protect yourself the best you can under the circumstances. You collect as much deposit and prepaid rent as possible up front and keep a tight reign on them. You give yourself that extra bit of financial cushion however you can get it to soften the inevitable shortcoming when it hits.

I also try to treat the tenants with as much respect and dignity as they deserve and try to be "nice" as I can without letting them put me in a position to be taken advantage of...sometimes it's a thin line. --50.45.xxx.xxx




Deadbeat Investing (by JW [WI]) Posted on: Apr 13, 2018 8:45 AM
Message:

If the property needs to be fixed up, then why not invest in it? Why wouldn't you want to own property in which you can be proud?

My best advice is to raise the bar on yourself regarding how you take care of your property.

If your customers are truly financial "deadbeats", then stop allowing them to live in your properties. Raise the bar on how you expect your tenants to follow your rules. Take the lead and encourage the tenants to follow along. Screen applicants better.

--64.91.xx.xxx




Deadbeat Investing (by Dan [IL]) Posted on: Apr 13, 2018 9:03 AM
Message:

Some time back, our family bought a 23 unit apartment building. We put 25 percent down in the purchase, and in doing so, we got seller carry back financing under very favorable terms. Our first year was a really rough one. The units were occupied with a mix of class B and C tenants, all on month to month leases, and the rents were artificially low. When we took possession, we immediately raised rents close to market. And what was to be expected, some moved out immediately; most of the rest followed suit eventually afterward. In that first year, we had 22 out of the 23 units turnover. The replacement tenants mostly was comprised of class C tenants. The typical household was the welfare queen in charge of three unruly kids, and needed a live-in boyfriend to assist her with the rent. If Should I be around the building grounds performing some maintenance work, and witness a domestic dispute where the boyfriend stormed out, I knew right there and then that no rent was forthcoming next month. It wasn't uncommon for me to be handing out a quantity of 5 to 7 five day notices each month, and filing about 3 eviction actions each quarter. This was, without question, a numbers game. I had to practically be hands on to watch things there daily.

My success was from due diligence, a constant communication and diplomatic politeness with all of my tenants. These are very important, for a majority of my successful collections have been achieved as a result of these methods. Of course, in the conversation I can determine how much of a BS factor there is, based upon the "latitude of the attitude", what was being stated or by how things were phrased. Today, my tenant mix has considerably improved, comprised largely with a class B standing. Because of the 600% increase in eviction costs since then, and by noting the barrage of solicitations the defendant tenants receive (both via U.S. mail and email) from legal assistance foundations or from those ambulance chasing lawyers, it no longer profitable to retain class C tenants in my business plan. --99.203.xx.xx




Deadbeat Investing (by Nicole [PA]) Posted on: Apr 13, 2018 9:06 AM
Message:

JW - my take on this is, at least in my area, these are slum lord properties. I am not a slum lord but my latest round of properties is in the slums. You can only raise the bar in certain areas so much. No tenant will ever move into my places in this neighborhood that are what others here call class B and C tenants. I don't care how proud I am of the place, how updated, how nice, how energy efficient, etc. There are A LOT of people who will never move onto this street ... which is actually a little dead end alley, and you go through 2 other alleys to get to it. Trash gets hauled to the end of the street as the truck can't come down and city used snow blowers to clean it out this past winter. the only ones to ever live here have lived in this neighborhood their whole lives ... no one would come "looking" . the bar can only be raised so high in certain places. There is A LOT of money to be made here ... because these folks have no where else to turn and many landlords take advantage of that. --72.70.xxx.xx




Deadbeat Investing (by NE [PA]) Posted on: Apr 13, 2018 9:20 AM
Message:

JW, this is about niche investing. --50.107.xxx.xxx




Deadbeat Investing (by GKARL [PA]) Posted on: Apr 13, 2018 10:25 AM
Message:

Nicole, how do you fill vacancies in that situation? --172.58.xxx.xxx




Deadbeat Investing (by NC INVESTOR [NC]) Posted on: Apr 13, 2018 2:26 PM
Message:

When we first began we bought one property that we thought would be iffy. Turns out that was a gross understatement. My first clue was when none of our contractors would go to the property without taking a gun. Today that property is an A.

Referring to our tenants at that property in the first 5 years as deadbeats is an insult to deadbeats. The church across the street called to tell us the tenant was dealing drugs out of the house. My attorney wanted to file for an emergency eviction hearing and I actually told her to wait a few weeks hoping it was a meth lab and that the tenant would blow up the house with him in it just to get rid of the property.

That single experience turned me off to anything less than B class properties. Aside from the liability and the constant repairs after each and every tenant was evicted the amount of time and effort and aggravation just wasn't worth it to me.

I prefer the better quality tenants that don't require me to hand hold them every minute, understand how to abide by the rules, know how to pay rent on time and take care of the property. Are they perfect? No. But if it's perfect that I want this is the wrong business for me.

--71.75.xx.xx




Deadbeat Investing (by Nicole [PA]) Posted on: Apr 13, 2018 2:58 PM
Message:

GKarl - word of mouth. after my first purchase of a little row, I was approached by an elderly man the next alley over. these folks were born and raised in these houses and they are in their 80s and 90s. with my first group of inherited tenants, I painted the front doors my signature purple, gave them a gift basket that included 13 gallon trash bags they could use rather than grocery store bags, I used the weed eater along the fence lines, flower pot on the front stoop (not a porch, just a little cement step), etc. I "forgot" to take my broom with me. they have been renting there forever. I assured them I wasn't raising the rent. On the owner occupied, I did a minimal amount of cosmetic. Painted, new ceiling, new flooring, painted the cabinets and put in a new bathroom toilet and sink. the elderly is my target tenant here ... I can't have any baby mama drama.

to put the $10,000 needed into these places to make them "decent", would be futile. No way could I raise the rent (and get it) more than $100 a month ... that's a lot of years to just come out even ... and then they'd be in bad shape again.

I fix as I go.... make them nice looking and am sure anything that needs to be done is structurally okay ... one needed a window and rather than patch and rig it as had been done forever, I replaced it. I would never replace all the windows in the house. these houses had never been inspected. I got them licensed through the municipality and they passed inspection. Failed the first time but I knew they would ... I did some things but wanted to know what the inspector wanted .... it was actually very little. Inspections again this summer so we shall see if he's upping the bar a little and was giving me some wiggle room when I first bought them. --72.70.xxx.xx




Deadbeat Investing (by GKARL [PA]) Posted on: Apr 13, 2018 4:06 PM
Message:

That's very interesting Nicole and as I'm reading this, I'm forced to compare my regular rental tenant pool which I thought was "C" that I would now characterize as C+. Here's the thing though--a broad swath of the American public can probably be characterized as C or C-. That's where the housing need is and that demand is steady. There's nowhere for many of these guys to go and in a downturn, the number of these people will only grow. In the absence of a downturn, the demand is still steady. If one is set up to manage this, which seems to be the case with you, there's money to be made. The housing can be bought cheaply and the folks need it.

I see this as very similar to rooming houses with the main difference being dispersed management---but if you have row houses or a bunch of places in one area, that doesn't even apply. --64.121.xxx.xxx




Deadbeat Investing (by GKARL [PA]) Posted on: Apr 13, 2018 4:06 PM
Message:

That's very interesting Nicole and as I'm reading this, I'm forced to compare my regular rental tenant pool which I thought was "C" that I would now characterize as C+. Here's the thing though--a broad swath of the American public can probably be characterized as C or C-. That's where the housing need is and that demand is steady. There's nowhere for many of these guys to go and in a downturn, the number of these people will only grow. In the absence of a downturn, the demand is still steady. If one is set up to manage this, which seems to be the case with you, there's money to be made. The housing can be bought cheaply and the folks need it.

I see this as very similar to rooming houses with the main difference being dispersed management---but if you have row houses or a bunch of places in one area, that doesn't even apply. --64.121.xxx.xxx




Deadbeat Investing (by GKARL [PA]) Posted on: Apr 13, 2018 4:07 PM
Message:

That's very interesting Nicole and as I'm reading this, I'm forced to compare my regular rental tenant pool which I thought was "C" that I would now characterize as C+. Here's the thing though--a broad swath of the American public can probably be characterized as C or C-. That's where the housing need is and that demand is steady. There's nowhere for many of these guys to go and in a downturn, the number of these people will only grow. In the absence of a downturn, the demand is still steady. If one is set up to manage this, which seems to be the case with you, there's money to be made. The housing can be bought cheaply and the folks need it.

I see this as very similar to rooming houses with the main difference being dispersed management---but if you have row houses or a bunch of places in one area, that doesn't even apply. --64.121.xxx.xxx




Deadbeat Investing (by Busy [WI]) Posted on: Apr 13, 2018 5:21 PM
Message:

'Other than safety' -that's a lot. You make 'em safe. You don't guild a turd (learned that expression today from a successful landlord I know.) those tenant are probably happy with that. Safe, functional, and not so fancy that the landlord will come unglued if a hot kettle hits the countertop.

Lots of market for that. Some tenants can 'get their stuff together' at a place like this, and maybe transition up to a ' nicer place,' either with NE, or another landlord. Other tenants might still be on their way down (haven't found rock bottom yet,) so, those tenants that are transitioning down at least aren't damaging a perfect house. --172.56.xx.xxx




Deadbeat Investing (by razorback_tim [AR]) Posted on: Apr 15, 2018 4:20 PM
Message:

Collecting the money is one part of the equation. You have a remedy there - eviction.

Your risk on this property and your approach is how these same deadbeats take care of the property. Deadbeats are usually house beaters. I understand why you don't want to spend any money making repairs, but with deadbeats, over time, they will cumulatively do enough damage to the house that not even another deadbeat will want to move in. I would love to see you ride this house out for a few years, and if no foreclosure has started, bring a quiet title suit. --70.178.x.xx




Deadbeat Investing (by micky de [IL]) Posted on: Apr 20, 2018 10:37 AM
Message:

I have apartments in Cook county Il. I have to be very, very careful not to let deadbeats into my units. The courts here are run by bleeding heart liberal democrat judges. Landlords have very little rights. I have to jump thru hoops of fire and serve the deadbeat the summons almost on a sterling silver platter! The county cops which attempt to serve the papers are very casual in their efforts also. The filing fee is $420 and the cops get an additional $60 for one and$120 to serve two people. It's a scam all round. Landlords here, always get screwed! Gotta be very careful. --162.238.xxx.x




Deadbeat Investing (by Redd [SC]) Posted on: Apr 24, 2018 3:02 PM
Message:

After reading all the above , all I can say is I'm glad I'm almost out of this business. The money is not worth the hassle . It really boils down to this :

1) look inside their car 2) do they smoke ( = no respect for their body 3) visible tattoos 4) how they speak ( oh ! I'm a good Christioan and yada yada ) 6) oh whatever ! --107.135.xxx.xxx




Deadbeat Investing (by micky de [IL]) Posted on: Apr 25, 2018 7:32 AM
Message:

Redd (SC), I'm with you. After thirty years of this hassle with too many dishonest tenants, I'm getting out too. On my very first investment, the next night, my tenant moved out and took my fridg with him. Enough said; I could write a book! --162.238.xxx.x



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