Rookie mistakes with 1st tenants; where to go from here?

[Brad Sicoli]

Sorry in advance for the novel

I bought my 1st rental property on aug 28.  It was a duplex and in september I converted it into a triplex.  The property came with tenants living in 1 unit month to month and the owners living in the other unit.  

Unit #1: the sellers asked me if i wanted to keep the tenants.  they had just moved in in july and had not been screened.  The seller offered to kick them out for me. He seemed eager to do it. the seller admitted that he just wanted someone in there to be collecting something while the property was on the market so he wasn't too picky about who it was.  He said that they never left the property during showings like they were asked and that they were late on their august rent.  I said, 'no don't kick them out. it's their home, my house.  I'll give them a chance to stay.'  What a kind fool I am!

I met them to go over the lease contract (which i downloaded from bp for $49) explaining that rent will be increased beginning in november, the security deposit and the month to month nature of it.  They begged me not to have a security deposit or to get it from the previous owner, give them til dec for rent to go up instead of nov and to work with them on the sept 1 rent because he had a job but no transportation and needed to fix his car.  I gave in on the dec rent increase, the no security deposit but held firm on the rent due in full on sept 1.  It worked, he paid in time, in full, and not with cash. He would get the sec deposit back from the seller, i stayed out of that but i had no sec deposit.  He fixed his car, got a job that pays better and paid october rent in full and early. Wow!  He explained to me he was addicted to meth 9 years ago and has been clean since '09.  I congratulated him on overcoming adversity.  We had a little moment.

I have done/am doing significant work on improving this unit.  I have installed an egress window, covered open wires, installed a fire detector/extinguisher, tiled the area around the stove and provided access to a washer and dryer (hooked up to cold water only). I've spent about $3000 in improvements to justify a significant upcoming rate increase going from $700 to $950 in dec, not nov. 

Last night the female tenant in this unit calls me in a panic.  she doesn't know where her bf is (my other tenant).  He wont call her back.  She was distraught and wanted me to come over.  I came over and her bags were packed.  she said, "let me hide this with you.  I don't want him to take my stuff.  I've had that happen before and I think he's been stealing things from me.  I said, "you have access to the laundry room attached to my unit and the storage shed. If I were concerned like you I would hide it there.  you have the keys for that."  she was barely coherent, distraught, stumbling all over the place, just a mess.  I thought she was on drugs, but i'm not sure.  she said he was hanging with seedy people, he had accused her of doing drugs, he was stealing her stuff, and accusing her wrongly of cheating.  "He won't call me back."  He then called her back. They had an argument that I eventually left the room for.  I've had arguments in relationships but this was more than an argument, to me anyway.  It resulted in him saying, "I'm stuck on the highway, I ran out of gas." The nice guy I am I offered to drive her to him and take my gas can and fill up his car.  I am the landlord of the freakin year!  11:00 last night I drove 60 minutes to fill up his car because, "he knew the gas light was on but thought I could get home."  Funny thing, once we got ready to leave she said, I'll just leave my suitcase here.  I can explain it to him.  she is also acting calm and not high.  I don't know if this lady is on drugs or has massive anxiety, probably both.  I didn't see any drugs or paraphernalia in her unit.  I know he is tested regularly for drugs at his job.  We finally get there and they are 2 peas in a pod.  they were about to start ww3 30 minutes ago but now there are PDA's as i'm filling up his gas tank.  

He calls me this morning to thank me but also to question me as to what I was doing at his unit with his gf.  I stalled then explained that I was showing his gf how to use the washing machine.  in the argument the night before on the phone she said I was there and he was not happy about that.  she said I was only there to show where this new washer was and how to use it.  She certainly did not tell him the truth, that I was there because she had called me in distress worried sick that he was perhaps using again.  So I continued with the lie.  Now I think he may suspect me of relations with his gf.  WTF!  He can't prove it but he may suspect it.  she kept saying the night before how jealous he was and that he suspected her of cheating.  I guess I should have never replied to her distress call.  I should have let the seller kick them out like he wanted to.

Unit #2:  It's an airbnb and it's really nice.  This unit has been profitable and awesome.  absolutely no issues!

Unit #3:  I live in unit 3.  It's rough but I'm cool with that.  It's a 2 bed 1 bath, no kitchen, with a rough in for a kitchen in one of the bedrooms.  I live in the roughed in bedroom and if I move out the plan is to convert that to a kitchen on my own time and market it as a 1 bed unit.  I am renting out the 2nd bedroom so I have a roommate.  

This guy is weird but he has a decent job and can pay.  got him from craigslist.  I said I could do a month to month lease if he prefer but i have drafted a 6 month lease here for us to sign if you are ok with that.  If you do want to ever leave or make changes you need to communicate with me and let me know. I had him sign a 6 month lease andI did not require a background check because it's a roommate so it can't be that bad, right?  

First month, oct, he was late on rent.  He begged me to charge only a lesser amount for the late fee and he would pay all of nov by oct 15.  I said I don't care if he pays nov early and I'm not trying to get rich on late fees.  pay me for oct on your next paycheck and just pay me November by nov 1st, but I won't stop you from paying early if you want to.  

He pays October when he said he would and pays half, not all, of November on oct 15.  I give him receipts and he gives me a $20 bill just for being such a great guy.  What a kind fool I am!

2 weeks ago he asks if his buddy who is moving to Denver can crash at the house while he finds an apt.  I say the lease states that he cannot have anyone else sleeping in that bedroom for more than 10 nights a month.  I said this friend could stay in the airbnb unit if it's not rented but the nightly prices might be a bit high.  I may be able to offer a lower nightly rate though if there is low demand. 

there has not been low demand. This guy flew in 4 days ago and has been sleeping in the bedroom with my tenant.  ok, whatever, progressive society, great.  but the lease says you can't be here longer than 10 days.  I was not told he was coming over, it just happened. the new guy asks me 2 days ago, "thanks a lot man. it's really nice to let me stay here.  it's great that you don't have a lease or anything."  I say, "we do in fact have a 6 month lease and as I've told your buddy you can't stay there for more than 10 days.  If you plan on staying there longer please let me know and I may be able to amend the lease.  Tonight the friend says, "I think we might be moving.  We may be gone next week."  I say, "I said I can be flexible with the lease and the month but I can't have vacancy in november.  do you guys plan on paying rent on the first?"  He says, "well, I thought we gave you half of November."  I said I need to sleep on this situation but I may need to collect all of november.  I told him that I legally can require them to stay here for the full 6 months.  The rent is $600, he has paid $250 for November plus $20 for being a good guy.  I have collected a $100 security deposit from him.

Honestly I thought landlording would be easier.  I now know that I was a wonderful tenant when I was renting.  If I get property #2 I will either do an airbnb or hire a property management company.  

I know I have made mistakes here and most of these problems are preventable.  I would greatly appreciate advice from you professionals because as you can see I am quite the amateur.