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Sunday, May 9, 2010

And The Winner Is...

No matter how good your tenants are, one of them has to be the worst. Just like a race, only 1 person can be first and only 1 person can be last. While I would like to think of most of my tenants tied for 1st place, I definitely know who is in last place.

Late again for the month of May, I posted a 3-Day on his door on the 4th. I give my tenants 3 days to get the rent in. Actually, I give my tenants up to 33 days to get the rent in. The month they move in, the rent is due BEFORE they get keys. After that point, they can pay the next month's rent (30 days early), they can wait and pay it on the 1st every month like most of them, OR they can pay me any portion of future rent up to and including all of it up front for the whole term of the lease. The lease stipulates at what point it is late. I tell them at the lease signing they have 33 days to get the next rent check to me; on the 1st they are more than welcome to pay next month's rent at any time over the course of the month. They can pay it today, tomorrow, next week, two weeks from now, the 25th, 28th, or procrastinate until the very last possible moment on the 3rd. However, on the 4th it is late. I give them 3 days or as my partner likes to say "you have a 33 day grace period," because the 1st may occur on a Sunday and they might not get paid until the 2nd, they might not be able to make it on the 1st for a particular reason, or they might be excited for the weekend (if the 1st occurs then) and just forget. At any rate, they have a 3 day grace period to get the rent to me or at least notify me why it will be late.

My worst tenant again didn't pay his rent. It is ALWAYS a payroll excuse with him. No need to quote any here. I am sure you can make up your own that will be better than his lame attempts. I have another payroll excuse user, but I am informed well in advance of all her situations. She always tell me why she is going to be late, on what exact date the rent will be in, and then emails me to let me know she deposited it. She is very well trained.

I am now in the training wheel stage with this tenant, but diapers would be more appropriate of a description. I posted a 3-Day Notice on the 4th. Today, I followed up with a strongly worded text message; if that is even possible, and let him know, well, here is what I sent him: "Today is your last opportunity to pay the rent. The 3-Day expired on Friday at midnight and tomorrow I am filing at the court house. It is your choice, but if I have to file I am going for breach and possession."

I thought for sure my strongly worded text would elicit a response from him, but I didn't hear from my last place tenant all day. I pulled out my Eviction Book for California and started to get to work on my Summons and Complaint. Good stuff! Luckily, California has some great legal sites online and a very easy to use online document preparer through Turbo Court.

At about 9:30 tonight, I sent his roommate the following text: "Sorry, Tenant, but since you are listed on the lease as a guest and staying in the property I have no choice but to sue you as well when I file tomorrow AM." Within seconds, I received a text from my last placer stating the rent would be in tomorrow by noon. He followed this up with a very defeated sounding phone call with, you guess it, another excuse about payroll and how he would have to go to a check cashing place to get the money. Like I care?

Do I feel like the hours I spent studying my docs and preparing for my big legal battle was a waste of time? Hmmm, not really. I like being a landlord and I like opportunities to fine tune my craft. While I am both happy that he is now aware he will actually be dragged to court and then thrown out if he doesn't pay, I am also saddened that I cannot do the dragging. The punishment is the fun of the crime for the law abiders. I also planned on renting the unit for more than I am currently getting so I am missing an opportunity to create more income.

If you don't have a book like Leigh Robinson's pertaining to the eviction process in your locale, I highly recommend you obtain one. I have manuals for all the states I own properties. It just makes good sense to be aware of the laws where you are doing business.

As for the investing side, my partner started a challenge. He didn't really bother to tell me about it until we were a few days into it. He has set a goal to achieve a certain income over the next 90 days. It was a little shocking to hear the amount, but not unrealistic. I just know it won't be easy. We currently have 4 properties in escrow. We are wholesaling three and we bought those from the same seller of which 30% of the challenge goal will be produced. The fourth is one for our EPP. Still haven't found a tenant for the 1st property in our EPP, but we also don't have the electric meter back from SoCal Edison. Hopefully, we will have a resolution to this ongoing dilemma this week.

So far, May is turning into a very good month.

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