Newbies and season investors, story from my lender!!!!

[Jay Whitfield]

I was having a discussion with my lender when he came out to do a inspection on my rental investment. He told me a story of his first time rental of a property that he was force to rent out due to a loss of job and divorce. 

An elderly man and his grandchild comes out to look at his house for rent, the future renter or squatter offers a 500 deposit and 6 months of rent in advance. A total of 3500 dollars, sound good for the owner who just lost his job. This is in the state of Alabama, each state has laws that may be different. On a Friday, he takes the money, a check of course. On Monday both checks bounce, but the squatter has move in and will not come to the door and changes his phone number. Goes thru the legal channels and get a eviction notice and court date. 3 months have passed, judge orders the squatter to move out in 10 days. Squatter appeals the decision and gets a new court date, another 3 months have passed. The squatter gets a new court date in 9 months. 15 months have passed, no rent has been paid. The story ends when the squatter fails to show up to the court date 15 months latter and no rent.

Just thought I would share this information.

Jay

[Joey C.]

In my experience, any applicant who offers to pay way more up front than is needed is covering up for something else. And they will use the fact that they paid "x" amount of dollars up front as an excuse to take advantage. It's almost like a bribe or permission to be a problem tenant in one way or another.