The tenant with a gun - success at the end

[Adam E.]

I was telling this story the other day and why it's important and decide to share it here since I haven't been an active member.

My first property was a condo and when the financial crisis hit the market dropped in the area.  It was bad. I was able to rent the place, losing $80/month on a ~$850 monthly payment and the tenant was great...for the first year. He cracked a baseboard, fixed it himself and sent me photos. He paid on time. He was great.

One month rent was a week late. No big deal. Next month a week late.  Third month, 15 days and I call him.  He yelled at me, told me that he isn't a kid, doesn't need my checking up on him but he paid.  Similar pattern for the next few months.  I decide I need him out and I'm going to sell the property to reinvest else where.

Now, it's important to note that in that state I didn't have to go through the courts initially (if he didn't leave I'd have to etc...).  The rental agreement allowed me to simply cancel the lease with 30 days notice so I used that.  It also stated I could show the property with 24 hours notice.  At this point he started to email me and copy random people from various city, state, and county governments. I held my ground.

So the gun you ask?  One day I get a call from my listing agent. I can hear someone yelling in the background. Turns out the agent took some potential buyers over. The tenant opened the door wearing a gun in a hip holster. As he stood in the doorway he told them to come on it but if they touched him, he'd defend himself.  There was no way to go in without bumping into him so they left. His argument later was that he was accommodating and willing to let them in.

I paused the listing, let the clock run out for the week or so left and told him to get out or I'd have him removed. He argued about staying but moved on with no further issue minus a few arguments over the money I kept for cleaning, lack of fully paying rent owed, but then went away.

I put it back on the market and received an offer for 15K less than I paid. My exact words to my agent I won't repeat but she told me to play it out, so I did. Turns out the potential buyer's best friend lived above me, they wanted to hang out by the pool together, and had already started making plans. Fun part 2: she didn't have money for the closing. So I upped the price from my original asking, absorbed her fees, added a bigger profit, and ended up selling at a profit in a crashed market.

The success here is two-fold:

1. I learned how to deal with a bad situation by staying calm and not being emotional. I also learned that being able to hold a property in a bad situation and not having to worry about making the payment if the tenant wasn't paying is invaluable.  Some time later I found out the tenant's behavior changed because he was left go from his job. He was under increasing stress. Had I know that at the time I would have worked with him but now I know to look for changes in people's behavior to help me understand what might be happening that I'm not seeing.

2. When given a bad offer, don't immediately walk way. Entertain it. Learn about the reason the buyer wants the property. Learn what is of value to them. In this case, she didn't have enough cash but she should could finance it.  Work the numbers to find the best options.