All Forum Posts by: Amy E.

If you have a tenant who is paid up on rent, but doesn't pay for other fees (storage, parking, late fees, whatever), how hard do you go after them?  I'm in a situation like this and the property is profitable, and the rent is paid on time but the tenant essentially owes me $325 for back payment on a storage unit with the potential to get even further behind.  Its not part of their rent, it was an add-on.  The storage unit is on the same property as the rental unit and its empty.  But its in their lease that they will pay the extra fee for a year.

I can't seize the property in the storage unit, because its empty.  I could go to court, but that feels like a waste of my time and effort for a property that is already profitable.  I do not have a very commanding presence, and while I talk sternly to tenants if required, I feel like I have no leverage in this situation because the tenants will keep ignoring me unless I "do" something, not just talk.

Making matters worse is the fact that they are dirt poor, and my sympathy meter kicks in.  I have to beat it back a lot and remember that this is a business.

 Thoughts? Or is there a method for leaning on people to cough up the cash they owe without having to take legal action?

Yes, actually. Christopher Tillman runs the local REI meetings, based out of Macon, and there is a sub-group that meets once a month at the Nola Brantley library. PM me if you want his email.

Or, they have a meetup group here, 

Yes, I've seen some credit unions do this.  When I was looking Navy Federal did it and a couple of my local ones.

In practice when I used my local credit union they capped me at 95% and I never did get a real clear answer as to why.  It was likely along the lines of clause such as "either 100% or $XYZ, whichever is lower".  

Google it, you'll get a bunch of hits, just see what's in your area.

@Mags S.

Have you noticed any characteristics about applicants that indicate they will be either good or bad?

@Paolo Ruggieri

Do you mind sharing which banks? I am close to you and considering an unsecured LOC. I've already got a secured one.

Ask a local smaller bank about their commercial products. The ones in my area will consolidate all my houses into one lump secured loan. I chose to do a secured line of credit instead, but was eligible for their commercial mortgage too. They absolutely lend to my LLC, but they also wanted me to "personally guarantee" the loan. Just a piece of paper that says if the business fails I will personally ensure the loan gets paid.

You're VA....any chance you put money away in your TSP? You can take a "loan" from it and then just pay yourself back.

@Shanel Wiggins

The mediocre tenant is mediocre because she is somewhat high maintenance.  (i.e. her: "the water won't work", me: "pay the water bill").  Rent comes on time, which is nice.  She just takes more effort than with a normal tenant.

Have you noticed any trends in your tenants that would indicate prior to signing the lease that you've got a good one?

I'm an engineer.  I own 5 rentals but have only been in business about 2 years.  I've had 7 tenants, 4 great, two mediocre, one lousy.  But there seems to be no trend as to what stats I could've looked for to determine if a tenant would be "good" or not.  For instance, my best tenant has the worst credit score and my mediocre tenant has the best credit score.

I'm thinking about doing a regression analysis and determining which factors really correlate to good tenants or not.  But I need some help figuring out what categories to even look at.

I'm going to start with the basics: are they employed, how much do they make, what is their credit score, have they ever been evicted, do they have a criminal background, etc.  

So, what do you all look for that means you'll get a "good" tenant.  It can be anything, even if it seems silly.  

I live in GA....never been to Grovetown, but in my rural area it is completely reasonable to expect $20k in repairs with cheap entry-level finishes on most 1200 sf mid-60's brick ranch homes.  I believe you when you say yours needs only $10k, because I've seen it before. 

So, worst case, you need a little less than $40k.  If you've got some cash saved up, you could easily get the rest from a place like Lending Club, Propser.com or even your local bank with a signature loan.  Since you're employed, you should be good to go.  Depending on your credit (you're so young, it hasn't had time to build yet), the rate may be horrible, but work that into your numbers and plan for it.  Use the calculator on this website to really analyze your numbers. 

But, honestly, it sounds like you've done all that so I would go secure your funding and go for it. If you fail, you are young enough to recover.  You can't succeed unless you try and failure is how we learn things, so either way its win/win. 

My only advice is that time is money.  Get in there quick, get it fixed, and list it.