How to get a tenant out of a foreclosure while evictions are stop

Question

I'm referring to tenants as the previous owner. There is no lease.

We purchased a foreclosure, gave 3 day notice, then served unlawful detainer. Waited the 5 days with no response from tenant. Received the writ of possession from court sent to Sheriff for eviction... That afternoon all evictions were stopped due to covid.

I just read that LA is extending SIP until August, so I have a feeling SF might follow suit.

Is there anything I can do. I feel like just waiting for the courts to open back up is being a lazy investor and I should be working on something to get him out.

Mike Cumbie · Answer

Hi @Jim Peckey"Just a shot in the dark here - legally speaking, I know you're allowed to list the house/unit for sale/rent and show the place.  Would having a high number of 'showings' over a sustained period of time cause enough of a disturbance to the jerk tenants to cause them to look for housing elsewhere be 'illegal'?  There's a fine line there and I know 'harassing' your tenant is against the law.  Although, I'm wondering if it would be legal to setup numerous 'showings' to have legitimate buyers/renters take a look at the property as well as have family members, friends, colleagues, etc. join in on the showings to increase foot traffic through the house and at the most inconvenient times of the day such as early morning/late at night.  If it was bad enough, I would even consider using the current pandemic in my favor by having folks sneeze, cough, etc. while viewing the property to increase the discomfort factor."

I'm in your neck of the woods, and while appreciate your thinking outside the box, it's a bad idea (IMO). Just serve your legal pay or quit notices. Other than that you are spending too much time and energy on "fighting back". It takes about 30 minutes to write and serve a notice (assuming you are local). Done. If you take that same time and energy to setup showings, list it for sale, have friends and family spend their time coming out and masking up to cough and act interested, the man hours add up. (Besides being a self help eviction which is real bad, but I'm talking a business point here). There are sayings about fighting fools.

Our state has laid out clear steps (While I agree they take some time and Covid isn't helping). Spending any more time "fighting with someone who is always going to find an excuse to keep fighting" is a waste. Put it on paper, record everything they say and wait for trial. In my experiences Judges take about 12 minutes to decide. They spend 11 minutes listening to conversations about text messages, "he said", "The place looked worse when I moved in", "My dog didn't mean to chew up the molding", "The neighbor called me fat", "That carpet was nasty", "My mom was sick so I couldn't pay because her dog needed attention", "He said the grass was soft". Then they spend 1 minute hearing

"On February 6th I sent a Pay or quit and they didn't.... (shows notice)"

"On March 6th I sent a Pay or quit and they didn't.... (shows notice)"

"On April 6th I sent a Pay or quit and they didn't.... (shows notice)"

Gavel falls and all is done (You won Yay!). You could also fight and argue with them for 20 hours a week, stay up at night figuring out strategy, thinking of witnesses and asking neighbors for statements about the height of the grass and noise of the dog. Lawyers in these little matters seem disinterested and not ready to dive into the details (Because they are and charge by the hour). They find a firm legal stance and hold it and forget the rest of the fluff (Because digging into fluff is Murder type stuff and I am not paying murder type legal rates for an eviction).

So serve and go on. Don't call, don't text, don't email, don't argue. Meet your ends of the contract and look to other things. If you want to pay someone call a property manager and they will charge by the hour or pretty much just send a notice and follow a process. :)

Good Luck and I hope it works out!

Kervin P. · Answer

@Mike Cumbie I agree with you 100%. I recently just got out of the same battle and it was too much energy wasted. It's a shame that people take advantage of the system. It's good that we have a platform to share experiences and learn from others.

Matt Dunlap · Answer

@Rachel Cail - No luck... Still waiting. Last I read on the Alameda County Supreme Court website is that the court extended the stay of unlawful detainer until July 15th. They will only hear cases where the public safety is in jeopardy. I'm not 100% sure, but I read that evictions will not restart until 3 months after SIP has been terminated by Gov Newson. Therefore, we are looking around October.When I joined the HOA for the property I noticed the property has work orders towards weed abatement. The previous owner never paid HOA. $22K he owned and he never took care of the landscape. This home is in a wild fire area so we are trying to move forward and say they since the previous owner is allowing weeds this is a fire hazard. We just want to get in front of a judge and explain.

The owner has 7 bankruptcies and 2 foreclosures. Around the time we bought the home at foreclosure he transferred the title to another corporation for a $1. 3 months later that corporation filed for bankruptcy and transferred the title to another corporation. All the names are related. There is a group of people that are playing the system.

The previous owner has a twitter account in which he represents himself a successful real estate agent/business owner/financial expert and her made a mention about us and the purchase of this property. In that post he called us #greedy and said we should have checked the title. Of course we checked the title, and purchased title insurance. The title in now on record under our corporation.

So, this guy has 7 bankruptcies, 2 foreclosures, and owes about 12 companies $4M in debt, and lives in a $2M home. He says I'm greedy?

As far as investing in CA. We only invest in homes around us. We do not do any out of state investing. We own 2 airbnb's in Lake Tahoe on Nevada side, but that is a 4 hour drive so we can still go to the property in case of emergency. We figure there is at least a million dollars to be made all the time, from homes that are listed on the MLS. I have access to the MLS because my wife is an agent. I wrote a script that finds homes that were bought and sold within a year on our MLS. There were about 200 flips in Alameda/contra costa counties.

1. Homes are expensive, and remodel costs are the same as anywhere else in the country. It's pretty easy to make 10% on a million dollar home. We don't have to nickle and dime our remodels. Each project is fun to design custom kitchens and finished items. We don't have to do cookie cutter rehabs with the same low cost Home depot sku's.

2. We don't have to do many of them. 1 or 2 at a time provides a good income.

3. We own a few rentals in the Bay Area. Rent Control seems to always be moving towards more tenant protections, but we are in a high demand market. Low vacancy rate. We are planning on remodeling our 5 unit building, but there are a lot of complications with relocating the tenants and then due to rent control, we have have to offer the same unit back to the tenant once the remodel is complete, at the previous rental amount.

Matt Dunlap · Answer

That's funny Rachel... Our tenant is the same way! That's what makes it soo frustrating. Our tenant is a real estate agent/loan agent that is on Twitter talking about how much he hustles and how rich he is. He definitely knows his way around the foreclosure process and completely ignores us too. This is our 3rd foreclosure and both times before the tenants left before we had the keys. Now I see why people complain about foreclosure investing.

I thought about taking his tweets and forwarding them to family and business partners to shame him out, but afraid I might run into legal issues.

Rachel Cail · Answer

Hi Matt. I'm new here and in a similar situation. I inherited a single family house that I've been renting out temporarily until I could fix it up and sell it to invest in some multifamily properties.

The tenants are definitely taking advantage of the pandemic situation. Their lease was up last month so that's when I had planned to start the upgrades. They've stopped paying rent, won't leave and now I can't get the house ready for the market. Meanwhile, the housing market might tank. It's seriously frustrating. I have a good lawyer but he says unless they agree to leave, I might be stuck with squatters until the SIP is lifted, which as you mentioned seems as though now it will be August.

I was very, very understanding at first and offered them payment plans. When they ignored that, I offered to discount most of what they owe so they could use the money to find a new place. They're still ignoring me. Then I checked their Instagram to find out they're vacationing with their family for two weeks and having cocktails with friends while texting me to say they 'can't pay rent because they can't afford and can't look for a new place because they're SUpEr fReAked oUt!!!!' by the virus. If the State of CA needs to extend a moratorium on evictions, they should also pay rent for the people who can't or won't. Maybe for some people 6 months of free rent is worth a potential judgment against them and tanked credit score down the line. If CA doesn't prevent 2020 evictions from negatively impacting credit scores.

Bryan Devitt · Answer

Talk to an eviction lawyer near you. This is going to be state specific and something you don't want to take the wrong advice on, in CA something like that can cost you a lot of money. I don't know of any loopholes in the federal regulations unfortunately. This was a giant BS blanket moratorium that screwed over everyone like you

Rachel Cail · Answer

@Matt Dunlap Yikes! Sorry to hear that. Sounds like you have real low-life scammer in your house. I hope the weed/fire hazard issue will get you somewhere. I had reached out to several attorneys that specialize in representing landlords to see if I might be able to get in front of a judge for similar issue. None of them wanted to pursue that avenue since the laws around the moratorium on evictions are still being challenged and are as of yet, poorly defined. It's hard to build a case when nobody knows what's going on. But I do hope your situation resolves in your favor before the fall one way or another.

Your particular methods are interesting to me! I am about to rehab my property in SoCal and most advice has been to only remodel to the bare minimum and that over remodeling is a sure way to decrease your returns. But it sounds like you have a particular skill set and niche that works well for you. My property is worth about $650k so maybe a more average rehab would be a better choice? It would be fun to  make it awesome though! My education is in design so the creative aspects of projects are always appealing to me. Once I flip this house and learn more about analyzing, maybe I'll try a higher-end flip where it would make sense to make it uniquely beautiful. I don't have a contractor team that I've worked with before so I figure it's best to stick with basics especially since I can't physically be there to check the work. Though my brother is down the street and will be watching over the renovations for me.

Yes, rent control in the Bay Area seems like it would be a lot to contend with! I heard that the city of San Francisco has made the moratorium on evictions permanent. That scares the bejesus out of me.

Have you spoken with an attorney? It seems like you have a unique situation for several reasons. I know the California Apartment Association is challenging the eviction moratorium. I hope they have some success! They posted a podcast yesterday that discusses the latest with AB 1436 (the "free rent" bill). Maybe there will be some useful info for you there.

Maybe it's worth considering a civil suit when this is all over. He is taking advantage and civil suits are not that hard to win when you have a strong case. Keep track of what his assholery is costing you.

Rachel Cail · Answer

Hi Matt! I'm just checking back to see if you're still stuck with your tenants. I'm surprised and delighted that my tenants are moving out this weekend. I'm fortunate that they cared about what happened to their credit in the coming months. Though I'm not holding my breath that they will catch up on rent anytime soon.

I did actively work to get them out using various legal techniques. I'm not sure how much it had an impact, but after chatting with them on the phone yesterday, I do think my communications impressed on their minds that staying in a home and accruing a significant debt was not going be good for their longterm financial goals. I also checked in repeatedly showing how much they owed and let them know that I would take all actions available to me to collect the minute the I had the opportunity to do so.

Do you think CA is still a good place to invest? Once I flip this house, I want to purchase some MFHs but not sure where. I'm in Portland OR and this is certainly not a landlord-friendly locale.

How are thing going for you?

Rachel Cail · Answer

Yes, I would worry that if you did have to take him to court, shaming them might make you look bad. I have no idea if there will be any recourse for us once this is over, (highly unlikely) but I always try to vet my own actions as I imagine a judge might view them.

I just wish there were some limitations or some type application process for tenants to be able to stop paying rent and avoid fees or eviction. Essentially they are legally allowed to steal money right out of our bank accounts. Can I just go to the store and walk out with a bunch of stuff without paying and text the manager, "Sorry bro! It's cuz a the 'ronaaa!" and go home without repercussions? No. I can't. So why is it ok for tenants to steal from us? We all need to pay our bills. I'm not sitting around wearing a monocle and top hat here.

If the CA SIP is extended until August, then that means I will be without the rent income and unable to start work on my house until December at the very earliest if the squatters choose to take advantage of me to that extent. The moratorium on evictions lasts until 90 days after the SIP is lifted. My property is being held hostage by jerks. Really not ok.

Sigh. Just venting.

Michelle Fenn · Answer

Putting the house up for sale can be effective especially if it a SFH and sells to an owner occupant.   In my state an owner occupant purchase is not subject to leases.   I am attempting to contact our closed courts to get an emergency eviction to allow the property to transfer.

How to get a tenant out of a foreclosure while evictions are stop

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