They said become a property investor it will be fun. *SOMETIMES*

They said become a property investor it will be fun. *SOMETIMES*

Realtor · Cleveland, OH · Member since 2015 · 2k+ posts · 857 votes

Bought this property a few months back. Got it at a good price in a B area, Parma OH and put some additional capital to fix it up. Just general updating and making it more homey. (I still ask myself why though, tenants just trash your property, they don't care they move onto the next and repeat, that's their BRRR method, BREAK, RENT, REMOVE, REPEAT)

These tenants lived in the home for two months, then they decided to get a divorce. NOT my problem but I felt the effects, they didn't pay me rent. They just stalled to save up for the next deposit and moved out in the middle of the night leaving me with trash, furniture and repairs. Deposit won't cover it all. I've filed for eviction but took back the property, boarded up the broker windows, changed the locks and started cleaning out and getting ready for turn over. I bet the next landlord won't even check their rental history.

This is just a picture of all their stuff I cleared out after they left me in the house. Find it funnier that behind the garage they had a whole bunch of older windows that had been taken out from some unknown property and stored at my property? The guy was a GC/Handyman.

Point of all this? Well investing ain't all fabulous times of sipping drinks on a beach front while your tenants pay you rent. It's sometimes a war out here in Cleveland, OH. I find it amazing when BP members say I'll just self manage it from afar.

6Reply
26 views

Most Popular Reply

Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
9y

@Federico Gutierrez I have had multiple divorces in properties and you are correct, it is not possible to predict. But as landlord you get stuck in the middle. I talk with them immediately about plans for the house. Is one of them staying and if so how will they manage the payment. If they can't manage the payment, I would let them out of the lease. It is better to get them and their junk out. 

Overall the best part of being a landlord is:

1. The thrill of buying new properties, making offers, getting good deals. Love that part.

2. When you go by a few months with no problems. Money is coming in and life is good.

I am in total agreement with you that problems are just a matter of time. The best screening will not prevent every problem.

@Lionel Li it is very common for people to go through bankruptcy during divorce. People who had otherwise a good history, run into major issues when getting divorced. It is an emotional and financial hardship. You are trying to use logic by saying good tenants wouldn't risk tainting their credit. The problem is logic goes out the door when people get divorced. It gets ugly. 

See this reply in the discussion

29 Replies

Jump to latestLatest
  • Real Estate Investor · Austin, TX · Member since 2015 · 214 posts · 234 votes
    9y

    Yikes, does this happen a lot in Cleveland?

  • Investor · Atlanta, GA · Member since 2017 · 136 posts · 54 votes
    9y

    Wow!  How'd the tenants look during screening?  Any red flags that you can see in hindsight?

  • Ned J.Pro Member
    Investor · Manteca, CA · Member since 2017 · 1k+ posts · 2k+ votes
    9y

    Sorry for the hassle..... its going to happen sometimes....best you can do is learn from it and try and make some changes in screening and other things that may help avoid issues n the future.

    I try to tell myself....this is business....its going to have its up and downs....easy times and hard times.... some failures but much more success in the long run if you stick with it and learn from mistakes we all make

    Anyone that goes into this thinking its a piece of cake and easy $$ is a fool.....its hard work but well worth it in the long run

  • Rental Property Investor · Queens, NY · Member since 2017 · 93 posts · 128 votes
    9y

    Sorry about your recent experience..these are definitely amongst the things I worry about with rental properties but, how did you screen the tenants that rented your property? I always told myself, I invested to be a rental property investor not a property manager. I'd remove myself from this equation and build in 10% + half a month's rent for a reputable management team with a good pool of vetted potential tenants. I understand problems can still come up but, trying to manage everything just makes this more of a job and less of an investment. I hope your next tenant will be keepers!

  • Real Estate Investor · Marysville, OH · Member since 2014 · 242 posts · 196 votes
    9y

    One of my two Parma SFH's (my very first one, in fact.) just went vacant. Mgmt sent me photos of everything during the turnover, and WHAT A SLOB! She obviously never swept, or mopped one time in the 18 months she lived there. The dust bunnies had dust bunnies!

    At least she didn't break *too many* things.

  • Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    9y
    Originally posted by @Account Closed:

    One of my two Parma SFH's (my very first one, in fact.) just went vacant. Mgmt sent me photos of everything during the turnover, and WHAT A SLOB! She obviously never swept, or mopped one time in the 18 months she lived there. The dust bunnies had dust bunnies!

    At least she didn't break *too many* things.

     That's how you know it's a Parma turnover vs a Cleveland duplex turnover. Nobody talks about dust bunnies during a Cleveland duplex turnover, usually other stuff is a little more apparent. ; )

  • Real Estate Investor · Marysville, OH · Member since 2014 · 242 posts · 196 votes
    9y
    Lol awesome!
  • Realtor · Cleveland, OH · Member since 2015 · 2k+ posts · 857 votes
    9y

    @Nate R., This is the first time in two years in a B area property where it has occurred. BUT I do always tell people in B area's it will occur some point you can't avoid it. Just a matter of time, yr 1, or yr 3?

    @Ned J. I completely agree, there are highs every 1st of the month, then you have 29days to follow that are lows. It's not an easy business which is what I want to point out in this thread. 

    @Lionel Li I self manage and it's worked out good so far. I did background checks on both husband and wife, ran them through my screening, collected bank statements, it all checked out. They were married couple for a couple of years. I don't know how you could of foreseen a divorce in the future. 

    @Account Closed it never amazes me how people live. BUT sadly you can't tell people how to live.

  • Rental Property Investor · Queens, NY · Member since 2017 · 93 posts · 128 votes
    9y

    Hey Federico,

    Not exactly what I tried to point out. I agree, how could anyone have foreseen a divorce but, a divorce also doesn't justify not paying rent even with the financial burden unless the rent was only able to be paid with the combined income.. There are obligations that good tenants wouldn't want to risk tainting their record with. But that's besides the point..not trying to say managing your own properties doesn't work, I can respect that. I'm just pointing out the subject of this topic using my own way to remove myself from the "fun" parts of investing.

    (Did read your comment to someone else that this is the first time in a while that this happened. If it's a rare occurrence then your reserves that you kept would've covered that five times over.) 

    Again, wish your next tenants to be less of a hassle.

    Originally posted by @Federico Gutierrez:

  • Real Estate Investor · Austin, TX · Member since 2015 · 214 posts · 234 votes
    9y

    @Federico Gutierrez Thanks for sharing. I'm thinking of investing in the Cleveland area with some B-class properties, so I suppose I should be prepared for something like this. Glad to see it hasn't put you off investing.

  • WorldWide · Member since 2016 · 1k+ posts · 1k+ votes
    9y

    "I don't know how you could of foreseen a divorce in the future."

    Well, divorce rates are at least at 50%, if not more, so... Any interior shots? The dumpster doesn't look too bad, imho. 

  • Realtor · Cleveland, OH · Member since 2015 · 2k+ posts · 857 votes
    9y

    Interior wasn't too bad. Husband had some rage issues and punched a few holes in the main bedroom. He patched it up thou which was SO NICE of him. Front door had busted glass and same as side door. It was a really nice front door. I'll take pics tomorrow of that.

    Just dirty walls from kids hand prints. It wasn't too bad compared to what I've had in other properties but it's part of the game in the end. 

  • Investor · Richmond, VA · Member since 2016 · 1k+ posts · 2k+ votes
    9y

    @Federico Gutierrez,

    Sorry this happened, but it's just another example of rolling with the punches.   Half the time I do some gross and nasty stuff during a rehab I yell to my partner "it's so glamorous being a real estate investor!"     I will say, just be thankful they don't have pets--- I had a similar situation, gorgeous redone house.. and in 1 month, they let their cat urinate all throughout the house.. the smell was atrocious!!   Seriously, to the point I had to wear a mask to breathe in the house... 5 rounds of floor cleaner later, it was finally done and we have A+ tenants in there now!   

    Point being,  it sucks sometimes, and even with extensive screening, you can't avoid crap happening, so just fix it up ASAP, get it rented ASAP.. .and go after them for every penny they owe you!    Don't get mad, get practical and make sure you get compensated for anything you lost because of their issues.. lots and lots of pictures!!!

  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    9y

    @Federico Gutierrez I have had multiple divorces in properties and you are correct, it is not possible to predict. But as landlord you get stuck in the middle. I talk with them immediately about plans for the house. Is one of them staying and if so how will they manage the payment. If they can't manage the payment, I would let them out of the lease. It is better to get them and their junk out. 

    Overall the best part of being a landlord is:

    1. The thrill of buying new properties, making offers, getting good deals. Love that part.

    2. When you go by a few months with no problems. Money is coming in and life is good.

    I am in total agreement with you that problems are just a matter of time. The best screening will not prevent every problem.

    @Lionel Li it is very common for people to go through bankruptcy during divorce. People who had otherwise a good history, run into major issues when getting divorced. It is an emotional and financial hardship. You are trying to use logic by saying good tenants wouldn't risk tainting their credit. The problem is logic goes out the door when people get divorced. It gets ugly. 

  • Lowell, MA · Member since 2017 · 143 posts · 37 votes
    9y
    "Cleveland Rocks"
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y
    Originally posted by @Nate R.:

    Yikes, does this happen a lot in Cleveland?

    it happens everywhere and that is a fact.. I just took 300,000 lbs of crap of off a lot in lake Oswego Oregon the wealthiest city in the state of Oregon.. land under the crap 100 X 125k lot bare is worth 600k.. like Austin prices.. homes going up will be north of 800k each.. 2 of them. so yes happens every where.

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Federico Gutierrez  and you can see why the note business is booming.. same returns if not better and don't deal with the three TTTs  but some people love this stuff..

  • Ned J.Pro Member
    Investor · Manteca, CA · Member since 2017 · 1k+ posts · 2k+ votes
    9y

    For the people that use a PM to handle the tenant screen....and think that solves the problem of not getting a good A+ tenant... don't they use all the same screening and then contact you to approve of the tenant or not? Isn't the final choice of accepting the tenant still up to the landlord and not the PM?...so its still on the landlord to pick..... the PM just handles the initial screening and may have some tips or gut feeling to share, but the "buck stops" with the landlord making the final decision

  • Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
    9y

    I've had tenants that were good at first and then still trashed the place in the end. In hindsight, my lower end rentals ended up like this more often than not. Good tenants generally don't want to live in the ghetto.

    On my higher end rentals I visit the place they are living now to see how they are caring for it. But even that is not always a sure thing. I did that once with an apartment dweller. When her and her boyfriend moved into my rental with their two daughters that had previously been living with their dad, the carpets, walls, etc. ended up trashed. Mind you, I was charging them $500 a month less than market. To top it off, they stuck me with the utilities, which I just took out of their deposit, along with the rest of the damages.

    If you rent to ghetto losers, that's the end result, I've learned. Income, education, and credit tell a lot about someones class. A guy with an MBA, a six figure job, and an 826 credit score is not as likely to trash your rental as the guy who works a $10 an hour job, has a 575 credit score, and no HS diploma even...

    A girl I rented to had kids when she was in high school. I didn't realize until she moved in. Someone who has a demonstrated pattern of bad decisions is not magically going to become the tenant of the century...

  • Real Estate Broker · Cleveland, OH · Member since 2017 · 719 posts · 658 votes
    9y
    Originally posted by @Jack B.:

    Good tenants generally don't want to live in the ghetto.

    If you rent to ghetto losers, that's the end result, I've learned. Income, education, and credit tell a lot about someones class. A guy with an MBA, a six figure job, and an 826 credit score is not as likely to trash your rental as the guy who works a $10 an hour job, has a 575 credit score, and no HS diploma even...

    Someone who has a demonstrated pattern of bad decisions is not magically going to become the tenant of the century...

     We are not talking here about ghetto, are we? It might be not B neighborhood, but C for sure - not ghetto.

    When you're buying for $5-10K in Cleveland, that's when you get these tenants.

    Try to find MBA guy with 826 FICO and $100K income for the $800-900/mo rental!! If your house located in $70-90K neighborhood, it's very unlikely to get tenants with all these traits. 

    I have plenty of tenants with $10/h jobs, less than 500FICO, kids etc - and they live happily ever after. If they do trash the place - it's part of this business. It sucks every time it happen but it's not the end of the world. Clean, fix and move one - rent again.

    There is no point to get few months vacancy to avoid bad tenants: no screening can warrant that.

    The only protection you have - try to build good relationship with your tenants. But it's not that possible when you have 100's of them vs 10-15. So, it takes money to make money - have people to clean, repair and rent again.

    Waiting for decent tenants might cost you more than cleaning up the place. Vacancies are the worst expense of this business.

  • Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
    9y
    Originally posted by @Irina Belkofer:
    Originally posted by @Jack B.:

    Good tenants generally don't want to live in the ghetto.

    If you rent to ghetto losers, that's the end result, I've learned. Income, education, and credit tell a lot about someones class. A guy with an MBA, a six figure job, and an 826 credit score is not as likely to trash your rental as the guy who works a $10 an hour job, has a 575 credit score, and no HS diploma even...

    Someone who has a demonstrated pattern of bad decisions is not magically going to become the tenant of the century...

     We are not talking here about ghetto, are we? It might be not B neighborhood, but C for sure - not ghetto.

    When you're buying for $5-10K in Cleveland, that's when you get these tenants.

    Try to find MBA guy with 826 FICO and $100K income for the $800-900/mo rental!! If your house located in $70-90K neighborhood, it's very unlikely to get tenants with all these traits. 

    I have plenty of tenants with $10/h jobs, less than 500FICO, kids etc - and they live happily ever after. If they do trash the place - it's part of this business. It sucks every time it happen but it's not the end of the world. Clean, fix and move one - rent again.

    There is no point to get few months vacancy to avoid bad tenants: no screening can warrant that.

    The only protection you have - try to build good relationship with your tenants. But it's not that possible when you have 100's of them vs 10-15. So, it takes money to make money - have people to clean, repair and rent again.

    Waiting for decent tenants might cost you more than cleaning up the place. Vacancies are the worst expense of this business.

    I was that guy (though with a 155K salary) a few years ago, except I wasn't renting. I bought a house paid in cash at the bottom of the market for around 65K so I could have more financial security. The house wasn't in the best neighborhood, but I was determined to get ahead. They are out there...but yeah, in the minority. I would have rented there to get ahead too if I had to.

    Sold that house for 3x what I paid for it years later, and never looked back. No more low end rentals for me (I rented it out for 3+ years).

  • Real Estate Broker · Cleveland, OH · Member since 2017 · 719 posts · 658 votes
    9y

    @Jack B. that makes all the difference: you bought the house! It means now you can move up and rent it out with very good ROI because you bought it in the right time.

    I do have sometimes tenants like that (well, maybe not with MBA but otherwise great frugal people) - they save on down payment and rent cheaply - within 10-15% of their income. But these are one on a million tenants. We can't sit around and wait till someone like that come along. 

    It's a business: if I'm not making money, I'm losing it. Then, what's the point?

  • Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
    9y
    Originally posted by @Irina Belkofer:

    @Jack B. that makes all the difference: you bought the house! It means now you can move up and rent it out with very good ROI because you bought it in the right time.

    I do have sometimes tenants like that (well, maybe not with MBA but otherwise great frugal people) - they save on down payment and rent cheaply - within 10-15% of their income. But these are one on a million tenants. We can't sit around and wait till someone like that come along. 

    It's a business: if I'm not making money, I'm losing it. Then, what's the point?

    Yeah, I've since bought and sold more than a dozen houses and rent a few out currently. I will say, it's best to try to avoid extremes. Nothing too low, nothing too high.

    My primary residence is a 750K+ house that is proving to be very difficult to rent. Most renters don't have 4K a month to drop on a house this nice and of this size. I do see these houses rent eventually in my area, but at pretty low rates.

    Nice thing is I made a ton of money on appreciation and other hacks.

  • Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
    9y
    Originally posted by @Irina Belkofer:

    @Jack B. that makes all the difference: you bought the house! It means now you can move up and rent it out with very good ROI because you bought it in the right time.

    I do have sometimes tenants like that (well, maybe not with MBA but otherwise great frugal people) - they save on down payment and rent cheaply - within 10-15% of their income. But these are one on a million tenants. We can't sit around and wait till someone like that come along. 

    It's a business: if I'm not making money, I'm losing it. Then, what's the point?

    Yeah, I've since bought and sold more than a dozen houses and rent a few out currently. I will say, it's best to try to avoid extremes. Nothing too low, nothing too high.

    My primary residence is a 750K+ house that is proving to be very difficult to rent. Most renters don't have 4K a month to drop on a house this nice and of this size. I do see these houses rent eventually in my area, but at pretty low rates.

    Nice thing is I made a ton of money on appreciation and other hacks.

  • Real Estate Broker · Cleveland, OH · Member since 2017 · 719 posts · 658 votes
    9y

    @Jack B. obviously you don't buy $750K houses to rent, but your first house was a good deal: for rent and to re sell

    In A neighborhoods appreciation is always a factor. Plus, you can use HELOC to finance your investments! Way to go

Join the conversationCreate a free account to reply, vote on answers and follow this thread.