Evictions galore

[nsu1997 0]

Is it just me or are all tenant/buyers in the solar system NOT paying their rent? I have done about half a dozen CAs and over the last 6 months I got every single one of them back. Every one! Perhaps this is a reflection of the state of our economy in general, but I think what it more accurately reflects is my former lack of a good prescreening system. I fixed that problem. I'm now signed up with Citicredit and I now charge each applicant a $20 app fee to pay for a credit & evictions check.

 

This could actually be a good thing because each seller wants me to find them a new tenant/buyer which means more assignment fees. But in all honesty I'd rather have put good tenants in the houses in the first place. Some of these people are falling behind on payments because of these bad tenants and I feel responsible for it..

 

One deadbeat tenant just moved out yesterday and I find out today he trashed the place. Did I mention that owner is 3 months behind because of the bad tenant? And I put him in there. Not sure what I'm gonna do about that one.

 

Anyone else going through something similar?

[MichaelC 160]

Problem tenants and t/b's are, unfortunately, a part of this business that will always be with us. I think the economy may be a part of it, but that doesn't explain someone trashing the place. That's a lack of due diligence on screening prospects.

Your post about this also reminds me why I never choose a tenant or t/b for the homeowner. I don't want that to come back and bite me on the backside in six months. They choose and they accept the consequences if they choose poorly.

[TAT 0]

Problem tenants and t/b's are, unfortunately, a part of this business that will always be with us. I think the economy may be a part of it, but that doesn't explain someone trashing the place. That's a lack of due diligence on screening prospects.

Your post about this also reminds me why I never choose a tenant or t/b for the homeowner. I don't want that to come back and bite me on the backside in six months. They choose and they accept the consequences if they choose poorly.

 

 

MC,

 

I assume some sellers ask you how much the TB is paying you for the assignment fee? How do you deal with that question, especially if it is a lot of $?

 

TAT

[MichaelC 160]

The question of how much we'll be making on the deal is one that comes up frequently enough. I usually tell them I'm not sure because there are variables and each deal is different. Then I quickly get back to what they are getting, their bottom line. That needs to be the number they focus on, and it's your aim to keep them there.

[Guest jvmccall]

Problem tenants and t/b's are, unfortunately, a part of this business that will always be with us. I think the economy may be a part of it, but that doesn't explain someone trashing the place. That's a lack of due diligence on screening prospects.

Your post about this also reminds me why I never choose a tenant or t/b for the homeowner. I don't want that to come back and bite me on the backside in six months. They choose and they accept the consequences if they choose poorly.

MichaelC, I know you have probably explained this 100 times before, but can you explain again how you make the sellers select the t/b's? I missed that for some reason in your manual. Thanks!

[Guest jvmccall]

I think it's critical to point out again the importance of pre-screening. The only tenant-buyers that I have not had a problem with were the ones I carefully pre-screened. How did I pre-screen? (I actually have a lady who does this for me.)

 

1) We make sure they have a good down payment.

2) We pull their credit (even though we pretty much ignore credit scores).

3) We call 2 previous landlords.

4) We call the employer.

5) We call all their personal references.

6) We make sure they can verify their income with pay checks, tax returns, or bank statements.

7) We do a criminal background check.

8) We check with our mortgage broker if they think with credit repair they can get a mortgage in 1-2 years.

9) Finally & most importantly, we make sure that with their income they can afford the home.

 

I think that's it... I might be missing something.

[TAT 0]

The question of how much we'll be making on the deal is one that comes up frequently enough. I usually tell them I'm not sure because there are variables and each deal is different. Then I quickly get back to what they are getting, their bottom line. That needs to be the number they focus on, and it's your aim to keep them there.

 

I realize in the beginning when you are first negotiating the terms with the seller, telling them you don't know how much is pretty easy. More my question is ...since you let the seller decide which TB is acceptable, don't they then ask how much they are putting down? At that point to say I do not know would seem a bit shady. How do you keep them from getting greedy and trying to cut you out.

[MichaelC 160]

Problem tenants and t/b's are, unfortunately, a part of this business that will always be with us. I think the economy may be a part of it, but that doesn't explain someone trashing the place. That's a lack of due diligence on screening prospects.

Your post about this also reminds me why I never choose a tenant or t/b for the homeowner. I don't want that to come back and bite me on the backside in six months. They choose and they accept the consequences if they choose poorly.

MichaelC, I know you have probably explained this 100 times before, but can you explain again how you make the sellers select the t/b's? I missed that for some reason in your manual. Thanks!

Joe, I don't make them select their tenant. They are happy to do so themselves. It is, after all, their property and their investment. Giving them control of the situation is a selling point, in my experience.

 

 

The question of how much we'll be making on the deal is one that comes up frequently enough. I usually tell them I'm not sure because there are variables and each deal is different. Then I quickly get back to what they are getting, their bottom line. That needs to be the number they focus on, and it's your aim to keep them there.

 

I realize in the beginning when you are first negotiating the terms with the seller, telling them you don't know how much is pretty easy. More my question is ...since you let the seller decide which TB is acceptable, don't they then ask how much they are putting down? At that point to say I do not know would seem a bit shady. How do you keep them from getting greedy and trying to cut you out.

TAT, at some point the homeowner is going to know that you made some money on the deal. So what? Do they have any reason to think you are a non-profit organization? I'll say it again: their primary concern needs to be what their bottom line is, not how much money you are making. If my promise to them is that they will see $200K at closing, and in the process I am making $5K, if they have an issue with that, then I walk. You should probably do the same.

[Guest jvmccall]

Joe, I don't make them select their tenant. They are happy to do so themselves. It is, after all, their property and their investment. Giving them control of the situation is a selling point, in my experience.

 

So when you do find someone, do you review the details with the seller and ask what they think? Do you say something like, "I would recommend them." Or, "If it were me, I would probably accept them." I sort of do that now. I make sure the seller is involved & knows all about the person I am putting in their house. I guess it's really their decision, but they are relying heavily on my recommendation. Is that sort of what you do?

 

Thanks!

[MichaelC 160]

Joe, I don't make them select their tenant. They are happy to do so themselves. It is, after all, their property and their investment. Giving them control of the situation is a selling point, in my experience.

 

So when you do find someone, do you review the details with the seller and ask what they think? Do you say something like, "I would recommend them." Or, "If it were me, I would probably accept them." I sort of do that now. I make sure the seller is involved & knows all about the person I am putting in their house. I guess it's really their decision, but they are relying heavily on my recommendation. Is that sort of what you do?

 

Thanks!

If they ask my opinion, and they usually do, I'll give it to them, along the lines of what you just said above. But they always are the decision maker.