All Forum Posts by: Matt Sicignano

What people don't realize about the real estate crash and the participants is that even if you took all the sub-prime loans out there at the time and declared them worthless-the losses wouldn't be worse than a bad day at the stock market. What caused the ripples that spread out throughout the banking and market making industry? Leverage.  The securitization of the mortgage backed bonds, false security of bogus ratings and inadequately funded "insurance products" like credit default swaps, let the originators of these toxic instruments take on a thousand dollars of profit for a dollars worth of capital. Unfortunately, that leverage worked the other way too.Ever wonder why a company like Bear Stearns, with $50 Billion worth of mortgage backed assets on the books went broke virtually overnight? That's right-that unexpected turn in leverage. What makes that scenario much less likely to happen today are the reluctance of the banks and lenders to leverage themselves that much, the forcing, by regulation, to prevent them from getting too leveraged, and the collapse of those toxic assets that used to be traded around like a game of musical chairs, with the value only set by whoever was dumb enough to pay it, in the hopes there would be a bigger fool down the road. 

Examining their credit report microscopically is an exercise in futility. What do you know? They are lax in paying their bills. What don't you know? If you will be on that list.  No one can tell you anything else with any degree of certainty. What you should be doing is looking at how they compare with other applicants. If you have 10 prospects and they are at the top of that list, credit wise-they would look better than if you had 10 and they were at the bottom. If you don't have any except them, something is off, most likely the price, the marketing, or the condition.  The only thing that makes sense is comparing the known values, not the unknown. 

No-No-No-to "cash for keys"!!! Or as I like to call it, bend over, get extorted by the tenant, then screw the next landlord down the line. (how? you should know this already; you're on a landlord blog!) And, because you're lazy, and don't know the law, you'll lose money. I always  institute a dispossessory proceeding( to protect my legal right to obtain possession of the property, if nothing else) , obtain a judgement if possible, then enforce. Worth the trouble? Maybe in the last 10 years, $12,000 recovered.  Money in my pocket, and notice to the next landlord that this is a deadbeat. Too much trouble? Then get out of this business, period-there are collections attached to this business, just like any other business. If you are a "cash for keys" idiot, my prayer is for your next tenant to be the one who has the clean credit rating, but played the system and got stupid, lazy landlords to subsidize their bad behavior. 

@Account Closed  Its a protection against the tenant coming back and saying that you illegally evicted her. (It gets trickier if there is anything left behind too, not your case) Technically, the property is still under her control through the lease period. (I know-not paying rent  should allow the landlord to automatically regain control, but that's why they have eviction proceedings, both to get a tenant out, and to get legal possession of the property)  If she gave you a written statement that she is relinquishing the property, that would bolster the defense that she voluntarily relinquished the property. But say you sue her for damages; now she is pissed, and says that you locked her out of the property-the judge may decide that since you didn't legally regain possession of the property, you are the trespasser! Your lease gives her control, a dispossessory action lets you regain control, legally, by a "writ of possession".  Note the language-if you win, you get the right to possess (your own property!)  The lease rules-the payment aspect is a separate action, and the two must be reconciled by a judge in the jurisdiction.  Is my scenario likely? probably not, but why take the chance? 

So it seems you have $2500 in damages (are you sure-can any of the damages be construed as wear and tear in the broadest sense of the word?) and one month lost rent-offset by the security deposit? Unless you have language in the lease in Ohio that says the landlord doesn't have to mitigate lost rents, no judge would give you more than the one month rent. Here's what you should be thinking about. No formal eviction, tenant suddenly comes back after a two month vacation (?) finds out you changed the locks-have you heard of an illegal eviction?  You don't have possession of the property unless you file a dispossession and get legal possession of the property!  And no-tenants not paying rent does not get you possession!  So, kill two birds with one stone-file for a dispossessery action and a money judgement. (in Georgia, if the tenant is not served personally, then you can't get a money judgement.)  And for all those who say-don't bother, read this. I had a judgement against an old tenant-garnished wages, he quit. One year later, I saw them on Facebook, found out where they worked, filed for a garnishment-company did not respond in time, paid me THE WHOLE AMOUNT!! Now they have to take payments from the deadbeats! Don't bother, or Ca-Ching! $3500 in my pocket....

She found a better/cheaper/closer/cuter house.....that happens, and you will be better able to deal with these kinds of things with more experience.  One of the ways is to get a deposit with the lease agreement, and a document signed that says if the tenant doesn't perform, that deposit is your liquidated damages. Don't sign or take off the market without those two!  As far as the legality's , I'm not one of those wimpy landlords that say it's not worth it, don't bother, too much trouble, etc. etc. etc.-I do go after tenants, but in this case I wouldn't.  The hurdle is that you have to serve her in California. Your expenses would be more than your damages.  

I think the "Fair Housing Laws " apply to protected classes; of which I did not see "deadbeat" listed as one of them. But here's a great business plan!  Lets get all the bad tenants together, pool their higher rental payments  into one big payout with a over market return, add a sprinkling of 800 credit scores in there to add legitimacy, then sell the income stream for a quick payout right away......what...sounds like what? Housing bubble-get out of here-what could possibly go wrong??

I am really happy to see the "cash for keys" policy being slammed here for a change! I have been railing against this policy for quite a while that some selfish, self centered landlords try to justify with the lame excuse that "it's just business"!  And that while they are on a website that encourages co-operation and information sharing that benefits all of us!  Some of these boards even run their own credit checks too!  How is it "just business" when you allow a tenant to extort you in exchange for a clean record that the next landlord gets blindsided by?? The majority of posts here, and on other sites are about choosing and vetting prospective tenants-how does it help to throw a toxic tenant back into the pool to screw the next landlord who depends on an accurate credit check to approve the next occupant. You want to do cash for keys in return for no legal ramifications? More power to you! But stay off these blogs that assist landlords because you are taking without giving, and my fervent hope is that your next tenant has a crystal clear credit report, but has screwed the last 3 landlords that paid them to leave

Try to find out where she works from her page-get a garnishment...

Wow-so much unknown information that needs to be known. What area-trend going up or down? How are the renovations being paid, special assessment? Bank loan? Reserves? What will be the amount of reserves left after? What did it look like before? If the million dollar renovation just brings it up to standards, no one is going to pay a premium for that!