Posted by ScottE on December 17, 2000 at 23:46:31:
But he plays one as a lessee…
Screening Tenants - Posted by JPiper
Posted by JPiper on December 17, 2000 at 10:05:56:
Had an interesting experience yesterday that is precipitating this post. The situation is involving a rent-to-own house I’m wanting to move…and things are slow as you might expect, complicated by sub-zero temperature, snow, ice, etc.
I show the property to what appears to be a very motivated tenant/buyer…she has cash, loves the house, is ready to go. Great! That solves my problem. But instead, I stick to my normal process which is to get an application and check it out.
So first step in my process (before I pull credit) is to check the local database for civil actions. HMMMM…there she is, various cases as a defendant, there’s one involving a personal injury where they got a judgment against her for $4K. Ooops! There’s a couple of evictions…but only the first 3 letters of her first name…is it her? Is the name truncated for some reason? Is it someone with the same last name and a name entailing ONLY the first 3 letters of her first name? Mighty unusual first name with those 3 letters. I’m no rocket scientist but now I’m suspicious.
I plug the address of the last place she rented into the tax assessors database. What’s this? The owner is a different name than her landlord?
Over to the Ultimate White Pages to look up the Owner’s name. Bingo…there it is. I give him a quick call. Yep he’s owned the property for 25 years…never rented it…never heard of the tenant, never heard the name of the alleged landlord.
Amazing…she must have given a friend’s name as her landlord, used a phoney address as the rental property. And it’s odds on that if I call the management company Monday of that apartment building that filed the eviction (twice) against a similar name…that it’s her.
Unfortunately, it’s not the first time it’s happened to me…nor will it probably be the last.
There’s a little more to screening than simply pulling a credit report. I’ll deal with people with credit issues…but I NEVER deal with someone who lies to me.
Too bad…she sure would have solved my immediate problem. She wanted that place NOW. But if she lied about one thing…where does she draw the line? I’ve spent a decent sum of money fixing this place up. Would it make sense to trust a person of this type with all that money? I don’t think so.
I do the screening myself. But if you’re using a screening service…make sure of what they’re doing…because prospective tenants do lie.
JPiper
Looking for my 15 seconds… - Posted by Karl (OH)
Posted by Karl (OH) on December 18, 2000 at 14:45:29:
Just for the sake of joining in on this topic, here’s another story.
Several years ago I owned and lived in a house with a college buddy. When I got married, I moved out and we found a renter to take the spare room.
John from England answered our ad. John was a very pleasant guy, English uppercrust, he did consulting work as a computer programmer in the U.S. on a work Visa, drove a new BMW, he had some money and liked to throw it around. He owned a home in Arizona, but had a year-long contract to do computer work in Ohio.
Nice guy, so I set him up with a single friend of mine. Within a month he proposed to her. She said - you’ve got to be kidding, I don’t think so. It was a little ugly.
Then he missed the next rent payment and his share of bills. We kept missing each other at the house, and the messages to him didn’t produce a check. (My buddy saw him everyday, but was afraid to try to collect the money). He just left messages back to me assuring us we’d square up soon. Then he got two months behind.
Then we heard through the grapevine that his consulting contract had been cancelled, and he was suddenly moving back to Arizona, his flight out was Sunday. He left me a message to take what was owed out of his deposit. I caught him at the house on Friday morning, and showed him his lease agreement stating that he had lost his deposit for not giving one month’s notice, and now his total bill was around $900. We argued a little, then he wrote me a check for the full amount and threw it at me, calling me a few names in the process.
The check was written against a credit card account. I went to work and called the credit card company to verify the check, that account had been closed for two years with an uncollected balance.
Just then my friend who had dated him called me, said that John just called her from the airport to say - we could have been great together, goodbye. I ran back to the house, all his bags were gone.
A few minutes later, the phone rang, it was his new employer in Arizona, wanted to verify his wedding date. WHAT? He had told them he was about to get married and would be a US citizen soon, a requirement to accept the job. I told the woman that there was no fiancée, my friend had turned him down. No, the girl he supposedly was going to marry lived in Arizona. He apparently had another fiancée back home, and was getting married in a couple weeks.
I called the local police to report the bad check, they said they wouldn’t pursue anyone all the way out in Arizona.
So I called the INS to report a bad check written by someone in country on a work Visa. They didn’t care. So no help from the authorities.
So on Friday afternoon while John was in an airplane I called John’s house in Arizona and left a message on his machine that a bad check written against a closed account was a felony, and that I was going to call the INS to report the felony, which was grounds for deportation, and that I was going to do everything possible to have him deported back to England because he tried to scr*w me. Legally a stupid move, but that got his attention.
From Friday night through Sunday afternoon John must have tried to call me 30 times, according to my caller ID. He left a couple frantic messages for me not to do anything until we could talk and work it out, then called back every half hour for two days. I let the phone ring.
I finally called him back Sunday night, he overnighted a cashier’s check for the full amount, I had all my money Tuesday morning.
Karl Kleiner
I’ve Seen The Light – Thank You! - Posted by WayneMD
Posted by WayneMD on December 18, 2000 at 07:25:42:
Never, never, never will I not screen a tenant again! I’ve gotten away without screening for 30 years (very small time . . . not that many rentals). Now that I am seriously considering doing L/Os, these posts have been especially valuable and definitely have made this board worthwhile to me. Thanks for sharing.
Wayne
Re: Screening Tenants - Posted by JD
Posted by JD on December 17, 2000 at 19:02:40:
A couple of days ago I got a call from a couple that wanted to move into my rental immediatelly. We made an appointment to meet at the property the next day. Within an hour I found out that the 21 year old couple (with 4 children) had 4 judgements, 3 DUIs, 2 bad check felony charges, an eviction and a restraining order (a partridge in a pear tree?) against them. One of the co-defendants was ‘their current landlord’. The husband had just posted bond on one of the bad check charges two days prior. I forgot to show up for our appointment the next day, they where somewhat upset.
Re: Screening Tenants - Posted by Jim Locker
Posted by Jim Locker on December 17, 2000 at 16:24:16:
Ahhh, war stories. These are the stories that make us the life of the party…
Gotta say that, even though I run a screening service, they STILL occasionally get past me.
Not very often, though. The last one happened last winter, due to a clerical error in my office where updated evictions had NOT gone into the database in a timely fashion, and we discovered that my new tenant was just being evicted from her old location, one day AFTER signing the papers. Also, the person in my office who was doing the screenings (and was responsible for maintaining the database) had been hoodwinked by a friend who claimed to be a landlord, even though we had records in the office that CLEARLY would have showed it to be false, if she had checked.
I fired her.
The rest of the story? The tenant lasted until about 2 weeks ago. I did have to evict her.
How do you do a “Local Check”?? - Posted by Mike - TX
Posted by Mike - TX on December 17, 2000 at 15:17:33:
JPiper,
I understand the process of pulling a credit report, and i understand how to look up the last property and compare names of landlords (like Kaiser has mentioned), but what else do you do for a local check? Where do you look?
Great post, thanks for making me a little more aware about how to screen properly.
Mike
Re: Screening Buyers - Posted by JoeKaiser
Posted by JoeKaiser on December 17, 2000 at 14:06:26:
We generally do a pretty decent job screening tenants, but here’s one that got by me last month.
“Sold” a property to an “attorney moving up from California.” Wanted to rent until closing (about a month away). As a rule, we always avoid renting out a property before closing, but the buyers agreed to a $3000 nonrefundable deposit, so we relented.
They wanted to be in before Thanksgiving, so on Wednesday their agent handed them the keys we’d provided, but he didn’t collect a check. Apparently, their “money market account” took an extra day or two to process their checks, so they said they’d pay on Friday. Here’s where we should have said, “thanks but no thanks,” but we again relented and told the agent to go ahead and give them the keys.
Friday comes, no check. Buyer is returning to California to visit dying sister in hospital and will send a check when they arrive.
No check shows up the following week.
Buyer returns. We ambush him at the house late one evening. He says he mailed the check while in California, on the 28th. Wife concurs.
I say, “tell you what, just write me another check and we’ll tear up your check when it get’s here.”
He says, “I wish I could, but it was the last check from my money market account checkbook.”
I may have been born at night . . . but it wasn’t last night.
I give him 24 hours to produce the dough or leave. He says “no problem.”
The next day the agent receives a document package from the Buyer, and he faxes it to us. It includes copies of the check he says he sent. It’s not a money market account check at all. I call the bank, the account had been closed years ago. His agent calls him and tells him to knock it off. He responds by faxing a letter and financial statement to show he’s for real.
Only the fax comes from Kinkos . . .
And his letter says that the check was returned to him since the letter cam back “undeliverable.” And it was a good thing, since his “executive secretary” had mistakenly handed him and old checkbook, and that “I don’t write checks on closed accounts.”
And the financial statement says he’s worth $662 million!
The note attached to the financial statement says “I do not give your permission to contact my CPA.” We call the CPA, who says “how much did he swindle out of you?” Not a good conversation starter.
I pull up the courthouse records and find a judgment against him from a couple years ago, and I call the creditor. Same story, the fellow wrote a check on a closed account to purchase their ranch. He’d told them all the same stories and even used the same financial statement. And the sister was dying back then as well.
Oh great.
Also found a lien against him for $495k.
Also found his recent forclosure on a local home.
Amazingly, he agrees to leave. We keep our mouths shut about all the stuff we know, but can’t resist a parting shot . . "by the way, do you have an interest in the “Silloh Corp?”
He says he had a limited interest in the corp but was not “the lead” so had no “participation in day to day activities.” We say, “well, do you know Doug Wilson (the earlier seller), because he is looking for you.”
He says he knows of him, but doesn’t recall the circumstances.
Yeah, right.
We figure that’s the end of that, but ten minutes later he calls back and says that “no, I checked the status of the Silloh Corp with the lead out of Atlanta, and we’ve had no dealings with Wilson.” This guy doesn’t know when to quit.
My partner and I say goodbye and good luck, hang up the phone and look at each other in total amazement. Wow, this guy is a nutcase.
Luckily, they left the house in perfect shape, so we lost a couple weeks but dodged a huge bullet, one we could have avoided with a single phone call to the courthouse.
Joe
Re: Screening Tenants - Posted by phil fernandez
Posted by phil fernandez on December 17, 2000 at 13:54:52:
Hi Jim,
Actually I do consider you a rocket scientist. That’s a “real estate rocket scentist.” Excellent post. As you know I’m big on screening. Never lost a dime yet. But that lost dime is just around the next corner. Therefore we all have to be very vigilent on our checking potential tenants.
After what you found, I would never rent to them. If they have lied once on the application, that will not be the only time or last time that they lie. Lying is really a pattern thing.
Hopefully others will read your post Jim and realize that you can not check up on a potential person too much.
Re: Screening Buyers - Posted by JoeKaiser
Posted by JoeKaiser on December 17, 2000 at 13:47:30:
We generally do a pretty decent job screening tenants, but here’s one that got by me last month.
“Sold” a property to an “attorney moving up from California.” Wanted to rent until closing (about a month away). As a rule, we always avoid renting out a property before closing, but the buyers agreed to a $3000 nonrefundable deposit, so we relented.
They wanted to be in before Thanksgiving, so on Wednesday their agent handed them the keys we’d provided, but he didn’t collect a check. Apparently, their “money market account” took an extra day or two to process their checks, so they said they’d pay on Friday. Here’s where we should have said, “thanks but no thanks,” but we again relented and told the agent to go ahead and give them the keys.
Friday comes, no check. Buyer is returning to California to visit dying sister in hospital and will send a check when they arrive.
No check shows up the following week.
Buyer returns. We ambush him at the house late one evening. He says he mailed the check while in California, on the 28th. Wife concurs.
I say, “tell you what, just write me another check and we’ll tear up your check when it get’s here.”
He says, “I wish I could, but it was the last check from my money market account checkbook.”
I may have been born at night . . . but it wasn’t last night.
I give him 24 hours to produce the dough or leave. He says “no problem.”
The next day the agent receives a document package from the Buyer, and he faxes it to us. It includes copies of the check he says he sent. It’s not a money market account check at all. I call the bank, the account had been closed years ago. His agent calls him and tells him to knock it off. He responds by faxing a letter and financial statement to show he’s for real.
Only the fax comes from Kinkos . . .
And his letter says that the check was returned to him since the letter cam back “undeliverable.” And it was a good thing, since his “executive secretary” had mistakenly handed him and old checkbook, and that “I don’t write checks on closed accounts.”
And the financial statement says he’s worth $662 million!
The note attached to the financial statement says “I do not give your permission to contact my CPA.” We call the CPA, who says “how much did he swindle out of you?” Not a good conversation starter.
I pull up the courthouse records and find a judgment against him from a couple years ago, and I call the creditor. Same story, the fellow wrote a check on a closed account to purchase their ranch. He’d told them all the same stories and even used the same financial statement. And the sister was dying back then as well.
Oh great.
Also found a lien against him for $495k.
Also found his recent forclosure on a local home.
Amazingly, he agrees to leave. We keep our mouths shut about all the stuff we know, but can’t resist a parting shot . . "by the way, do you have an interest in the “Silloh Corp?”
He says he had a limited interest in the corp but was not “the lead” so had no “participation in day to day activities.” We say, “well, do you know Doug Wilson (the earlier seller), because he is looking for you.”
He says he knows of him, but doesn’t recall the circumstances.
Yeah, right.
We figure that’s the end of that, but ten minutes later he calls back and says that “no, I checked the status of the Silloh Corp with the lead out of Atlanta, and we’ve had no dealings with Wilson.” This guy doesn’t know when to quit.
My partner and I say goodbye and good luck, hang up the phone and look at each other in total amazement. Wow, this guy is a nutcase.
Luckily, they left the house in perfect shape, so we lost a couple weeks but dodged a huge bullet, one we could have avoided with a single phone call to the courthouse.
Joe
Re: Screening Tenants - Posted by Rick Vesole
Posted by Rick Vesole on December 17, 2000 at 11:18:16:
Good post, Jim. Have had similar things happen. Usually I’ve caught the lies before accepting them, but not always. One thing that always raises a red flag with me is when someone says they want to move in right away. This often means that they have been evicted or have not given proper notice to their present landlord.
Interestingly, one of my best tenants did lie in their application. I didn’t catch it until after they moved in. They had been under foreclosure at the time the applied to rent from me, but instead they gave me a phony landlord and address. Thier phony landlord gave them good references, so I rented to them.
We follow foreclosures, so when I saw their name on a foreclosures notice a couple of weeks later, I confronted them. They admitted that they had lied to me and that they didn’t think I would rent to them if they had told me the truth. Of course they were already in my apartment so I told them I would keep a close eye on them and if they screwed up with me, I wouldn’t give them another chance.
These people have now been there for 3 years and have always had their rent paid before the due date. About 6 months ago, the wife called and left me a message that the toilet was leaking. By the time I had called back that afternoon, the husband had already replaced the wax ring and fixed the problem. I told him to send me his receipt for reimbursement and he refused. It turned out to be a smart thing for him to do, because when I was raising rents this fall, I decided to leave theirs the same.
(P.S. I do not receommend this as a way of getting good tenants)
Good story - Posted by MikeChicago
Posted by MikeChicago on December 18, 2000 at 23:57:06:
I must remember this one
Mean-streak a mile wide… - Posted by JHyre in Ohio
Posted by JHyre in Ohio on December 18, 2000 at 15:20:33:
Which is why your talents are wasted on engineering. Go to Law School, you’ll fit right in, LOL.
John Hyre
Re: How do you do a “Local Check”?? - Posted by Jim Locker
Posted by Jim Locker on December 17, 2000 at 16:17:47:
Gee. I just started posting on this board a couple days ago, and I must have referred to this post I made on The Motley Fool at least a half dozen times already, about how to screen a tenant. Check it out.
Thanks for the reminder Joe… - Posted by dewCO
Posted by dewCO on December 17, 2000 at 18:08:02:
I’ve always heard that attornies are theWORST to deal with, especially on their own real estate transactions. This is a good reminder. One can discriminate AGAINST attornies (and some doctors too are known for being dead beats!) and I think this reminds to do that. If he really is an attorney…can he keep his license doing sh*t like this???
What real people do about real mistakes - Posted by AnnNC
Posted by AnnNC on December 17, 2000 at 15:14:32:
Interesting post.Story following story.
This actually happened to me, I used an old check book
by accident. What did I do? I didn’t realize my mistake until I got ONE phone call from
my friendly credit card company. I then explained it to them and re-sent the right check, then called everyone I had written checks to and,
if out of town, paid them by credit card, which they were able to verify, and then got in my car and drove
to every utility or private merchant in town and brought them
CASH,and said " I accidentally wrote you a check on a
closed account, I’m sorry, here is the cash for that
payment." That’s what real people do who made an honest mistake. None of them had contacted me or were even aware, at that point, of the going-to-be-bounced check.
I recall a post here a few yrs ago, that I think replicated the next year–it’s the holiday scam. They count on your being busy, or banks being closed, or on your buying into their sudden plight.etc,
and also always put their needs ahead of yours—dying sister, or my favorite: “our buyers have to move into the house we are selling so we have to move into the new(your) house before closing/agreed-on occupancy date.” What an interesting solution! They get you to alter YOUR policy to accomodate them, as if there were no hotels,
The original post I referred to had the tenant moving in
before repairs could be made, saying, “no problem…thank you SOOOO much!” and then withholding rent for the repairs not having been made, and of course the first check was only received after many
calls by the owner, and all subsequent check were late,then finally withheld. There’s always an elaborate chain of events that
can’t be fixed (didn’t get paid yet, or I thought my aunts couzin mailed it on her way to her backpacking trip in Yellowstone, but she died on the trip and the police are holding her belongings for evidence).
Hey, I can get creative too!
But my take on this is that when there is an emotional
reason (holidays) then look out. Some can be true, and not meant to scam, but they’d be one-time events and would’t be part of the process.
Just my two cents.
It would be nice to see a thread just on scams.
Ann
Re: Screening Tenants - Posted by Stew(NE)
Posted by Stew(NE) on December 18, 2000 at 14:12:59:
Do you give a truthful tenant extra points? I had a guy who on the application stated yes I am currently being evicted and I have been late on payments. We call the previous landlord and she confirmed, Yes she was evicted him and he had been late on every payment for the last year. The funny part was that he was obnoxious to my wife in a weird sort of way. Kinda like HE was choosing us and wasn’t quite sure if she met up to his standards. He kept asking her whether she own the house. We ran the credit and it was crap, so we sent he a nice little non-selection letter. In this case I was half expecting him to lie. Maybe, he was using reverse psychology Hee-Hee Good Luck
Re: Screening Tenants - Posted by JPiper
Posted by JPiper on December 17, 2000 at 20:33:41:
Rick:
Just to mention the other side of this, I had one tenant who came forward when they made their application and told me they were in the process of eviction.
There explanation was that they couldn’t afford the place they were in, with all there other bills. My house was cheaper, they were moving down, and when I looked at the total bills I was convinced they could afford it. So I leased the place to them.
They were a tenant for 24 months. During that time they NEVER made an on-time payment. In fact, they paid me $70 in late fees per month for 24 months. Not bad when you figure the rent was $500 per month.
At the end of the 24th month they moved out quietly in the middle of the night, with no notice. I never got a call from the next landlord.
JPiper
Re: How do you do a “Local Check”?? - Posted by Quint-OH
Posted by Quint-OH on December 17, 2000 at 21:15:54:
Jim…I would be interested in a (reputable) screening company. Could you e-mail me your addy and a contact phone number.
Thanks
Quint
Nope . . . - Posted by JoeKaiser
Posted by JoeKaiser on December 17, 2000 at 20:07:54:
He’s not an attorney, I’m certain.
Joe