Unpaid rent and attorney's fees, how to collect?

Question

Hello everyone, I have to evict one my tenants that left with 3500 dollars from unpaid rents with an additional of 2000 dollars in attorney fees.  She did not pay rent for 6 months and my PM did not do anything. I Fired the PM and hired a lawyer and evicted her but the damage was already done leaving me with thousands of dollars - unpaid rent. Now my question is, how can collect that money, should I hired a collection agency company or what other means out there to collect money she owes, also I don't want this to influence other tenants make them think that they can get away not paying rents but at the same time I don't want to spend one more dime trying to collect from her and not getting anything.

Shane Ussery · Answer

Far as property manager knowing everything.. you never get to the point u know everything. I been doing this.. this June will be 9 years. I’ll tell u straight up I don’t know everything and neither does anyone else that’s why people are on BP to network

Shane Ussery · Answer

@Gina Nicolas here’s what it boils down to. I’ll use this as an example, say your goal is 10 units up a running and cash flowing like crazy. The number and the money is irrelevant. It’s who you become in the process that’s the most important. Your going to mess up, things sometimes won’t go as planned. It’s these experiences at the bottom that’s where we grow the most. A baby isn’t born running down the road. That baby is born, learns to hold its head up, crawl, pull up, then takes its first step...getting the houses is the easy part..success and failure is magnified. Take a step back now what if u had all this going on with 10 or more at the same time... not saying u failed by no means but in this scenario if u had 10 imagine the problems... instead of getting more houses this is the part where u develop the skills necessary in order to get paid on your product, successfully collect, and reach your goal. Have you ever considered the property manager didn’t want to see u succeed? I know when i had my bad experience my pm I asked why’s the rent so low? I overlooked his response that it was a conflict of interest. As u go u learn to see red flags. You’ll be ok don’t let it bring u down. Me you or anyone reading this made mistakes learn and grow

Gina Nicolas · Answer

Actually, this rental was the first one that I bought and I was very new to real estate. My PM kept telling me that they have file for eviction and in my mind I thought that eviction takes a long time and that is the reason why it took so long, but after talking to a local investor I learned that eviction in that area shouldn't take more than one month, this is when I got rid of my PM and hired a lawyer to evict. I do feel a little bit a fault because being brand new to real estate at the time, I thought that my PM knew everything and I did not really question them, but now I know better. By all means I am not saying PMs are bad, I m sure they are some good ones out there and as I am looking forward to grow my rental portfolio I will be very pleased to have one but I just cannot find one yet.

Satyam Mistry · Answer

@Gina Nicolas Hello Gina, am sorry to hear this. What explanation did the PM company have for not collecting rent for 6 months? Had you noticed this after the first month that rent was not paid? I would connect with a couple of local investors in your area and see if they recommend a lawyer that specializes in real estate matters. Try finding a Facebook group in your area of real estate investors and posting there. Call the lawyer you find and explain the situation to them and see what they recommend. Use this as a learning lesson and do not let this discourage you moving forward.

Gina Nicolas · Answer

Unpaid rent was addressed in court that she owes me but once she was evicted, I have not heard from her. Actually I never thought to hold the PM liable but truly they were so horrible I was so happy not to deal with them anymore

Greg M. · Answer

It's going to be area specific in how you proceed. Easiest thing to do is turn it over to a collection agency. You may or may not be able to collect the attorney fees. If a collection agency is willing to take the job, expect them to keep 25%-50% of whatever they recover.

Shane Ussery · Answer

Couple things come to mind. First, when you consulted with your Attorney didn’t he or she suggest holding property manager liable? Also, when u went to court wasn’t the unpaid rents addressed?