Potential renter wants to pay full years rent up front ($54k)

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Potential renter wants to pay full years rent up front ($54k)

David P.
Member since 2020 · 404 posts · 235 votes

Hello guys,

So i have a property i been trying to rent out for a month now with limited response. Today i get a text from a mom and 2 kids. Recently seperated. She said she is willing to pay a full year up front which comes out to $54k. Also willing to give any security deposit I want. She said only thing is she filed for bankrutpcy last year and claims it was a troubled Ex that rang up her credit bills. All of this smells like trouble. She emailed me her credit report which shows 697 with the bankruptcy. If i go through with her I will still make sure she fills out a formal application that pulls her credit and not trust any PDF's she is mailing me. Would you guys consider this tenant or does she smell like trouble? She claims she has 600k in savings and will be sending me bank statements too. I don't know what to think of this considering she still hasn't even toured the property yet but is very eager to move in. Thanks as always. I found her on linkedin and she says she is a title 24 business owner and makes 20-24k a month. Not sure what title 24 is...I never came across this scenario and the full year rent up front sounds tempting but that would also mean i would have a trouble getting her out if she became a problem tenant.

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Greg M.
Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes
4y

Let's break this down:

She hid $600,000 from the bankruptcy court. This is fraud.

She screwed over credit card companies for $38,000. Again, fraud.

She is running her business in a way that you think may be to avoid taxes. Yep, fraud again.

She lied about her credit score. If you think 636 and 696 are close, you need to look up the definition of the word close. 

She lied about her having a landlord.

She lied about her current house being sold.

She has $600,000 in cash in a safe. 

Other than her repeated acts of fraud, her willfully screwing over others, her multiple lies, and her potential money laundering, she seems like a salt of the earth person. 

BTW, you will likely have to place that money in an escrow account. It will be reported to the government under the Patriot Act. Some computer somewhere may match up this transaction with the bankruptcy. **** will hit the fan.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    4y

    interesting..  I guess if you can verify she has the 600k in the bank and you get the 54k wired into your account prior to the keys I would probably do that.

    but i suspect some of the veterans on this site will have different take on it. 

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  • John Teachout
    Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
    4y
    First off, you have to find out if your state even allows collecting that much advance rent. We can do it where I'm at but some jurisdictions don't allow it. This isn't an unusual request. People do it for various reasons. Sometimes it's because they don't want to be scrutinized too thoroughly. If they pass the screening process, it wouldn't bother me to do it at all. Getting rent is one of the biggest hassles of landlording and much of that would be solved... That high of a credit score with a recent bankruptcy would have me concerned...
    5Reply
  • Richard F.
    Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes
    4y

    Aloha,

    As noted above, check your local laws first to see exactly what you are allowed to collect prior to move in. Here, we are limited to one month's rent. If a tenant wants to voluntarily pay $50K next month, then that alone would not be an issue. If anything happens, including death, that causes them to vacate, you may need to refund a significant amount. Much like a security deposit, that money is theirs, until they have occupied for the agreed number of months. You cannot keep their excess prepaid rent and move another tenant in. Also, Title 24 is either HUD related, including Section 8, or an energy related business in California, so you need to determine what the source of income will actually be for the second year. 600K savings with a fresh BK does not add up, but, that is why you don't make decisions on partial info, and certainly do not discuss with the prospect. Get their documentation, do your due diligence, then either decide or request additional documentation to clarify some aspect of the application. From here, it seems like they are in a big rush, which is always a red flag, especially when they do not have all of their documentation ready and don't seem to care what the place actually looks like.

    5Reply
  • Tricia O'Brien
    Investor · Anchorage, AK · Member since 2015 · 267 posts · 76 votes
    4y

    It's usually a red flag when people are eager to move in and send money even though they have not done a formal application yet. I would put her through your normal screening process and see what you find. The credit report she gave you might have been altered by her.  Since she is self-employed, check to see if she has had any business evictions in addition to evictions from a personal residence. You might call her bank to verify she really has the account she is stating that she has if they will talk to you.

    10Reply
  • Lori Goldsmith
    Realtor · Beverly Hills, CA · Member since 2022 · 31 posts · 24 votes
    4y

    If it sounds too good to be true, it usually is. If it feels rushed, listen to your instincts but I guess you have already or you would have taken the deal and not asked for advice. Feel free to text me pictures of the property and I can advise you how to make it look more appealing to rent quickly. 

    10Reply
  • Bjorn AhlbladPro Member
    Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
    4y

    I would be more than a little suspicious. People with 600k in the bank are unlikely to pay 54k up front-why would they need to? I would check her out very thoroughly. If the property is located in NY, NJ or Ca I would be doubly suspicious and probably would not rent to her. Money dragged across a landlords nose is never a good sign.

    8Reply
  • Account Closed
    Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
    4y
    Quote from @David P.:

    Hello guys,

    So i have a property i been trying to rent out for a month now with limited response. Today i get a text from a mom and 2 kids. Recently seperated. She said she is willing to pay a full year up front which comes out to $54k. Also willing to give any security deposit I want. She said only thing is she filed for bankrutpcy last year and claims it was a troubled Ex that rang up her credit bills. All of this smells like trouble. She emailed me her credit report which shows 697 with the bankruptcy. If i go through with her I will still make sure she fills out a formal application that pulls her credit and not trust any PDF's she is mailing me. Would you guys consider this tenant or does she smell like trouble? She claims she has 600k in savings and will be sending me bank statements too. I don't know what to think of this considering she still hasn't even toured the property yet but is very eager to move in. Thanks as always. I found her on linkedin and she says she is a title 24 business owner and makes 20-24k a month. Not sure what title 24 is...I never came across this scenario and the full year rent up front sounds tempting but that would also mean i would have a trouble getting her out if she became a problem tenant.


     I think for $54,000 and two months security deposit I'd give her a chance. (After, I've looked at the other data). There are a lot of reasons people want to do things this way. Listen, she was up front about the bankruptcy and can't file again for 7 years, so you're safe there. $54,000 covers a lot of eviction expenses. ;-) Don't believe the 697 score unless she has rebuilt credit since the bankruptcy, which if it was only a year ago is unlikely.  There are ways to buy a great credit score and that isn't what you are looking for. You're looking for someone who is honest and up front.

    If you are in a jurisdiction where you can't evict, then I wouldn't chance it. Someone could end up in the property for years with no payments and not be evicted.

    As long as she isn't on the lame from a mexican cartel leader, (if she is, double your insurance coverage) and see what her story is.

    I always get at least 10% down on the lease options I do and I have people lining up at the door. People pay $50,000 under the right circumstances. There is a lot of money floating around out there. $54k is not all that much.

    3Reply
  • Curtis Mears
    Property Manager · Raleigh, NC · Member since 2014 · 728 posts · 596 votes
    4y

    @David P.

    I had a similar issue a few years back. What I did was collect additional security deposit. It worked out ok. They paid as agreed.

    3Reply
  • Sylvia B.
    Rental Property Investor · Douglas County, MO · Member since 2014 · 1k+ posts · 1k+ votes
    4y

    I can't help but wonder why she wants to rent if she actually has the money and income she claims.

    2Reply
  • Jaron WallingPro Member
    Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
    4y

    I agree with the above statements 100%. Why are they even contacting landlords? She should be calling real estate agents. It's a major red flag. 

    "Back in 22' we had a tenant pay $54K upfront! Would have to see to believe it!"... 

    2Reply
  • David P.
    OP
    Member since 2020 · 404 posts · 235 votes
    4y

    Okay few updates - Yesterday, I told her to fill out a Zillow application first and that would help me understand everything better and take her more seriously. She did end up submitting the application and few findings. Her credit 638 was close to the PDF she sent me 696. Maybe she did bump up the numbers, I don't know but to my surprise still much better than some applicants who don't have a bankruptcy on their record. Also found out the bankrupty happenend middle of 2021 and it was discharged pasted below. Currently she only has an auto loan. Surprise they would give her a car loan right after bankruptcy. She told me the bankruptcy was around 38k in credit debt that her ex-hubby built up. She also sent me 3 months worth of bank statements which does show daily deposits of zelle/venmo and other forms of transfers which coincides with her running a business. She creates energy complaince documents (title 24). I saw about 20-25k in deposits but i also see heavy ATM withdrawels that basically evens out her bank account each month. Not sure if that is something self business owners do to avoid taxes perhaps? I am going ask to see the claimed 600k savings account that she mentioned and I think as a final test if we do meet in person I will ask her to show it to me in person on her banking app on phone.

    Doing my own research I do see that her and ex-hubby bought the house they are living in for 16 years and her business website is linked to the same address of 16 years.  Besides that, on facebook i do see her having 2 kids (15&16yr olds) and i do see her ex-hubby profile who she is listing her as current landlord. One thing she did sort of hide or misrepresented is she said her current landlord is selling their home. In reality the landlord is her ex-hubby and he owns the home.

    2nd-update. I asked for the 600k savings account and she said it is in a safe and she can video chat and show me it. Sounds very shady but looks like they are hiding money from someone and why file bankruptcy if you have all that cash sitting around. She said she would be paying the 54k in cash.  I am thinking of countering her with 1.5-2 years of rent and 2 months security deposit. We do still have an eviction mortatorium in la county until end of this year and who knows if extended again. That 1 year would at least help for things to settle down and if i can push it to 2 years worth of rent then even better.

    .

    2Reply
  • David P.
    OP
    Member since 2020 · 404 posts · 235 votes
    4y

    I just spoke to her on the phone and we are meeting today around noon to tour the place. She said she is willing to do a 2 year lease and pay the full 2 years up front ($108k) and the security deposit.

    4Reply
  • Steven Foster Wilson
    Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes
    4y
    Quote from @David P.:

    Hello guys,

    So i have a property i been trying to rent out for a month now with limited response. Today i get a text from a mom and 2 kids. Recently seperated. She said she is willing to pay a full year up front which comes out to $54k. Also willing to give any security deposit I want. She said only thing is she filed for bankrutpcy last year and claims it was a troubled Ex that rang up her credit bills. All of this smells like trouble. She emailed me her credit report which shows 697 with the bankruptcy. If i go through with her I will still make sure she fills out a formal application that pulls her credit and not trust any PDF's she is mailing me. Would you guys consider this tenant or does she smell like trouble? She claims she has 600k in savings and will be sending me bank statements too. I don't know what to think of this considering she still hasn't even toured the property yet but is very eager to move in. Thanks as always. I found her on linkedin and she says she is a title 24 business owner and makes 20-24k a month. Not sure what title 24 is...I never came across this scenario and the full year rent up front sounds tempting but that would also mean i would have a trouble getting her out if she became a problem tenant.


     It sounds a little suspicious. I have had 2 tenants pay for the full lease amount all up front. Although each of them were for a short time like 8 months and like 4 months. I did not have any problems. I would do your full research and make sure what she is all saying is true. 

    2Reply
  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    4y

    @David P.  my guess  she may be conducting a cash business and also hiding that money from someone who wants it, maybe her husband?  or maybe he hasn't filed taxes or something.  Could be alot of things.

    By any chance are you in the school district of the previous address?  Maybe the kids are going to school and she doesn't want to uproot them in HS and that is why she is so interested.  In any case I find getting divorced renters are flakey.  You have to check evenything out and ask yourself how you are going to handle that cash if you do move forward. 

    4Reply
  • Dwight McBridePro Member
    Member since 2022 · 2 posts · 5 votes
    4y

    I receive requests like this all the time. People live life differently. I will only rent to someone that I can physically see. They could be real or be doing the STR hustle. The one suggestion I would give you is to make sure the lease is ironclad on how many people can occupy the space. My only concern is I rent to two people and see ten people in the space. I have no problem taking advance rent. And make sure the person you meet is the same person moving in. There is a reason for this offer you just may or may not find out before you rent to them.

    2Reply
  • Scott AllenBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2020 · 449 posts · 471 votes
    4y

    @David P.

    Go over your rent qualifications and what you're looking for. If she has that much in savings, I'm surprised she would want to rent at all. It sounds like it's a nice rental though if it's $4,500 a month. You should have her tour the property with you before and feel out the situation more and move on from there. 

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  • David P.
    OP
    Member since 2020 · 404 posts · 235 votes
    4y
    Quote from @Dwight McBride:

    I receive requests like this all the time. People live life differently. I will only rent to someone that I can physically see. They could be real or be doing the STR hustle. The one suggestion I would give you is to make sure the lease is ironclad on how many people can occupy the space. My only concern is I rent to two people and see ten people in the space. I have no problem taking advance rent. And make sure the person you meet is the same person moving in. There is a reason for this offer you just may or may not find out before you rent to them.


     I thought about that too. If they are trying to use my property for some other reason. I will be verifying who she is and driver license today. I could also hold off on the keys since i have an electronic key pad until after they are moved in. Not sure what other ways i can protect myself. Criminal record was clean. The large sum of cash as payment and safe does sound super shady but i can see it as tax shelter and hiding it from the bankruptcy. 

    2Reply
  • Josh C.Pro Member
    Property Manager · Indianapolis, IN · Member since 2010 · 1k+ posts · 1k+ votes
    4y

    100k in cash? That’s nuts. I’d probably take it, but I’d meet at a bank and have the bank verify it’s good. Or have her get it in bit coin and transfer it to you so you know it’s not funny money. We see this often in $600 rentals. Never in 4K rentals.

    Be careful. But there are some people who keep everything in cash and gold. So it’s not impossible.

    4Reply
  • Greg M.
    Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes
    4y

    Let's break this down:

    She hid $600,000 from the bankruptcy court. This is fraud.

    She screwed over credit card companies for $38,000. Again, fraud.

    She is running her business in a way that you think may be to avoid taxes. Yep, fraud again.

    She lied about her credit score. If you think 636 and 696 are close, you need to look up the definition of the word close. 

    She lied about her having a landlord.

    She lied about her current house being sold.

    She has $600,000 in cash in a safe. 

    Other than her repeated acts of fraud, her willfully screwing over others, her multiple lies, and her potential money laundering, she seems like a salt of the earth person. 

    BTW, you will likely have to place that money in an escrow account. It will be reported to the government under the Patriot Act. Some computer somewhere may match up this transaction with the bankruptcy. **** will hit the fan.

    21Reply
  • David P.
    OP
    Member since 2020 · 404 posts · 235 votes
    4y

    Alright so just met her in person. Seem fairly normal. She said the $108k would need to be deposited in cash and she is willing to goto the bank with me. She does not want to deposit it into her account and write a cashier check. Besides that she says she mostly hides the money for the tax reasons and from her ex-partner. They are not married but do share 2 kids together. They are seperating right now. Said they been together 16 years, 11 of which were seperated but living under same roof for the kids. I don't want to be quick to judge on what happened with the bankruptcy or hiding the money from IRS. I have a feeling half business owners do that themselves. Main concern I have is what would be worst case scenarios. I think even if i got a tenant without the credit bankruptcy they could cause issues. I have one tenant that moved a family of 9 in when i thought it was 5. They are still paying but even with all my screening and checks things still slip through. Anyways, collecting money as landlord seems like the hardest part and if i got 2 years of that already with 2 months security deposit then i have a good amount of cash to use for lawyers or attorney fees if an eviction scenario arise. Just my 2 cents but i am still deciding. 

    3Reply
  • John Teachout
    Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
    4y

    The problem with a person lying is that it becomes impossible to believe anything they say because you have no way to sort out truth and lie. If someone lies on any part of an application, that's an immediate and final "no go" for us.

    Initially, when the post was about paying a year in advance I was thumbs up but as the additional info has slowly come out I would pass if it were me.

    8Reply
  • Caroline Gerardo
    Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
    4y

    No. just no. 

    Tax fraud, IRS fraud, state income tax ~ all those entities can come after YOU. Ex husband knocking on your door.

    You cannot deposit $100000 cash into your bank account. Your bank does a SARS report and you are in trouble.

    She sells title 24 reports? People or businesses pay for those with a credit card. The cash is from something illegal. She will

    be stirring up that in your backyard. 

    6Reply
  • David P.
    OP
    Member since 2020 · 404 posts · 235 votes
    4y
    Quote from @Caroline Gerardo:

    No. just no. 

    Tax fraud, IRS fraud, state income tax ~ all those entities can come after YOU. Ex husband knocking on your door.

    You cannot deposit $100000 cash into your bank account. Your bank does a SARS report and you are in trouble.

    She sells title 24 reports? People or businesses pay for those with a credit card. The cash is from something illegal. She will

    be stirring up that in your backyard. 

     No, I do see daily Venmo, zelle payments to her bank acct so they are paying with payment apps. She is withdrawing from ATM in cash and saving it. She said she is 1099 and also to hide money from her ex. 

    The cash deposit may ring alarms but at least on my end it is all legal to accept rent in advance with a formal lease stating so. What she does with her money or business is up to her. Why exactly would they come after me? I'm not involved in any of her business that may or may not be shady.

    2Reply
  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    4y

    @David P.  The bank WILL file the suspicious activity report and a form 8300 for transactions over $10000.   The Sars report lists suspect information on it, that will list your name.  She doesn't want to deposit in her account because if she does that, under suspect information they will list her name. Suspicious Activity Report - Examples, Format, Pdf | Examples      You want to do this but she is involving you in a financial transaction that could backfire on you.  Also what happens in 2 years?  does she hide money from you. 

    2Reply
  • Jonathan R McLaughlin
    Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
    4y

    @David P. What makes you think she will treat you any differently than the other people she lies to?

    4Reply
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