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Tattoo studio and difficult renter in my first investment
About a year ago I took over a lease on a 5 bdr house in hollywood. I put about $8K into the deposit and turned the dining room into a room and am now making $700 month in income from this situation in addition to not having to pay rent of my own. Shady yes, but I feel like it's a great start to my investing. Now i've got a problem with a tenant.
The tenant is running a tattoo studio in the main area of the house and is very vindictive towards the other roomates, causing the roomates to mostly stay in their rooms. In addition to this, he is a mechanic and consistently has car parts and junk laying around that he refuses to clean on his own.
As a result of all this, I gave him a 30 day notice that he needs to leave, which he immediately took to the landlord, who said it's not valid and that i'm essentially stuck with this guy. He then began stealing from me, starting with an $1100 item of mine. At this point I've also sat him down and tried asking him to leave, cleanup, move the tattoo stuff, etc. which he will not do. He did, however, return my item by saying I should "look around again" which I did, and magically my item returned.
Although I am the sole person who has signed the lease, the landlord asks that as roomates change that I keep him notified of their names and phone numbers, which I do. The landlord claims there is really nothing he can do about getting this guy out, and the landlord likes this guy because he has rented him from him for 10+ years.
So basically I have a lease, it's grey whether this guy does or doesn't, and I can't seem to kick him out or get him to leave. I really don't want to leave myself because I think this is a great start to my investing, so what should I do? Please help me!
Seems like your kinda screwed.
Did your roommate sign a lease/document? What does the document say about the things you have mentioned?
Or if there is not a lease in place how had you planned to get the person eventually out of the home?
I would not call this a start to investing, you don't own anything yet.
I would move. Rent another place and then call our current room mates the ones you like) and see if they want a room in the new place.
Better would be to buy a place and rent out the rooms so you are actually building some equity. You could go for a larger house or a 2-4 plex but LA is a tough market to get started in.
I believe tattooing requires licensing, fees and Hep B vaccinations of the technician which is a series of shots that take a couple of months to get. Maybe a call to the Dept of Public Health may provide you some ideas on how to make his current environment less hospitable.
Perhaps not investing, but definitely an entrepreneurial spirit! Congrats on thinking out of the box and creating something.
You said you put down $8k in deposit?! That's enough money to get an actual purchase going. What terms are required to get it back so you can put it toward your future?
@Rhonda E. - The roomate hasn't signed the actual lease that I signed, though he may have in the past since he lived next door for 8+ years. I am getting a copy of the lease tomorrow so that I can take a better look at what it says about the things he's doing. I do know CA law says if you're doing something illegal you can give a 3 day notice but the landlord isn't on board with that. And to answer your other question, obviously I should've thought about that before I did things, but at that time there wasn't a problem.... Obviously now I realize...
@Bob E. I think I will look for another place that if I can't find a way out of this situation. I happen to really love the place i'm at and finding a good deal on a 6 bedroom place isn't easy in Hollywood, but it's worth a look.
@Curtis Bidwell Thanks! I think you're all right it's not investing. It is some income thorugh real estate though and a start for me. And yes $8K in deposit. I have around 25K more to work with if I want to get another house, but i'm not so sure that would be enough to get a house around here in Hollywood. If I move out of the house i'm in, i'll get the deposit back minus any damage, etc. just like any lease.
@Richard W. I think that's an angle i'll try also, just not exactly sure what could or would happen as a result. Time for a couple phone calls.
Reminds me of my college days. I moved in to a place because I was desperate to get away from living with my girlfriend, plus the house was right by the beach. The guy running the show had converted a 3 bedroom hose into a money maker. He had taken the living room as his bedroom. The dining room became the living room. The 3 car garage was turned into 2 more bedrooms. There was also a camper in the driveway pulling in rent. Besides making money on rent he sold weed. The place was so trashed that the owners didn't want to evict him, the rehab to rent to legitimate tenants would have been massive.
Legally your roommate can't run a tattoo business out of the house.
If your other room mates want him out too then you should be able to make something happen. If he is not on the lease you should be able to get him out.
if you are the sole signor on the lease how did thus guy get in your house? If you do this again, make sure you get an agreement with the owner that gives you the right to sublease. You have say over who can live in the house and those people need to sign a rental agreement with you. Don't do leases with your sub-leasees. It is much harder to get them out if things don't work out. With a month to month, you just need to serve a 30 day notice if the person has been there less than 12 months.
Did anyone else in the house put down a down payment or are you the only one and on the hook for the whole thing? I hope not or you have a bad deal.
He could be hard to get rid of, look at the case of the many that moved into some peoples house and then refused to leave.
Update: The landlord asked me for the names of the people who are staying and their email addresses, which I gave to him. He stated that only 5 people could live in the house (now there are 6). He also put a stop to the tattooing. All the drama caused one tenant (in the master bdrm paying $1250 a month) to decide to move out at the end of the month, and now I am in a tough spot because I can't move anyone in in his spot. I think it's time to get outta here! Thanks for your advice all. I've learned a lot from this situation.