All Forum Posts by: David Roth

Hi,

I was wondering if anybody here has dealt with taking their tenant to court before to have debts paid and can give some insight. 

I had a tenant who just moved back home to Toledo because he was let go from his job. I let him go without any extra payments because I wanted him gone. Here's the background though. The original lease I printed for him had a typo and I didn't end up getting a new one to him because I had friends who knew him vouge for him and he seemed like a decent guy (I know, that was dumb and I've never done it with anybody else). I also live at the house as well. On NYE of this year, he went and crashed his car into a neighbor's yard down the road and got a DUI. I paid to get him out of jail the next morning and picked him up, drove him around when he needed for the week, and let him hold back on rent for a bit so he could pay off his lawyer fees and get a new car since his was totalled. He kept giving me updates on his repayment plan, and then kept pushing them back because of new unforseen expenses. I was starting to get a bit sketched out and thought about pulling out a lease to get his signature on something but felt it was a precarious situation at this point. He then said he would have the money once his tax lady got his return in and he got that, plus the stimulus checks in it, and that he isn't spending any extra money on things other than the essentials. Then he got the news he'd be losing his job, said he would still be paying off his debts after he moved back to his parent's, but I have still seen nothing from him other than the $500 in bail money. He now owes me $3,200 and I know he lied about being frugal because he has gone out drinking since, went to NY, and even drove home drunk one night just before he moved out. I am going to call him one last time and if I don't hear anything more concrete, was going to call his mother since he's living at home and I have her number from when he got the DUI. 

Basically my question is, if I take him to court for the money and don't have the lease contract to show the agreement, would all of the other info, texts, and whatnot be enough to win that case? The agreement was a 1 year term which would have ended at the end of August 2021

 Travis,

I will say that yes I would like to pivot from this method. I have friends in Denver and Colorado Springs who do the same thing with general success, so I decided to do the same in my area. It would be nice to rent out the rest of the house as a whole. I will likely do that once this round of leases is up. I have a month gap in between them but will likely just ask to bridge that when I sign the new tenant at the end of the month. Next year I will put both rooms up as a pair and hopefully be moved out by then as well. 

Still, I am looking for how others like yourself have had success in the area. Whether it's teaming up to own a series of units or flipping, I know everybody finds a niche and every market has certain methods which work better than others. I want to do things better for the next property. I will say I do not have too much trouble finding tenants, but I agree it's better to let friends live together (that is something I've been working towards correcting in my strategy). Really what my issue is is a 3 bed bungalow, which is the majority of what's found in the area, is generally too expensive for what I can collect in rent while living in the house (and even after I move out the cashflow isn't amazing). A decent 4+ bed is tough to find, so I wanted to canvas other investors to see what they have made work for them and to network a little.

If anybody here is involved in a REI group in detroit, please let me know which! I know about MREI already.

@Donald J Ireson I have a sheet that I fill out to see how I'll do on cash and adjust what my different expenses will be for the property. Ive been looking for places with little work to do, but im starting to think flips with things like unfinished basements are a better play.

As for tenants, I usually talk to them, have a discussion with my current tenants and make sure personalities will match. Answer questions. Then they come see the house and i run a credit check. My current tenants don't have a real say in who I pick but I make sure they are kept involved during the process. I would like to pivot to a different strategy though. Just not sure what.

@Travis Biziorek I have mainly been looking in the Ferndale, Royal Oak, Madison Heights, and Oak Park areas to try and take advantage of the young professionals moving into the area. I've so far been renting by the bed in a single family home and originally had plans to continue doing that as i accumulate properties, but it's been tough finding units i can collect enough rent on to make it worthwhile. Originally I thought I could ask for higher rent then I am now, but struggled somewhat to find potential tenants.

I recently started my REI venture in the Detroit area 1 year ago and I have been trying to figure out a good strategy for how to continue scaling while covering costs per property. The issue I'm running into is with taxes being so high and many properties having limited space or no garage, it seems difficult to profit or even net $0. Since I am a young professional, my strategy has been buy, move in to claim homestead benefits, rent rooms, then move out once I buy the next property. renting the whole home would be easier but obviously requires a lot more cash up front. Does anybody from the area or who has used a similar strategy have any advice on what/where to target to have an easier time collecting the rent I need to continue scaling?

Thanks in advance!