Here’s a valuable lessons …
Jack Miller told us to never rent to someone you would have a hard time evicting. It’s good advice that you need to follow.
Unfortunately that’s the exact situation I’m finding myself in.
About 3 years ago, an elderly lady (82) wanted to buy one of my houses with seller financing. She loved the house and really wanted it. I verified her pension from three different places and she made four times more than the house payment. Her daughter co-signed on the seller finance loan – which was actually selling the beneficial interest of a trust. ( Later the daughter lost her job and is now making ½ of what she made before so she can’t help Mom financially)
In 2010, she started paying late. Then she started not paying at all. I called her and she said her son had to move in with her and she’s been “helping him out”. She wanted to know if I could reduce the payments.
I told her I could not reduce the payments. If she could not afford the payment she should find a more affordable place to live.
There was an ongoing “slow pay” problem in 2010. Then in December 2010, I got no payment at all.
I drove over to the house to have a talk with her. Come to find out, the son is a druggie and he stole money out of her purse and that’s why she didn’t have the payment.
We both agreed that the son had to go then she was sure she’d be able to get back on track if he was not there taking all her money. I forgave the December 2010 payment and was hoping for a fresh start in 2011.
But it didn’t work out that way. More slow pays.
She called in March and asked if she could give the house back to me and just rent with a reduced payment. I agreed to reduce the payment by $200 per month and she signed the beneficial interest back over to me and entered in to a rental contract. (Another mistake – I should have insisted that she move out)
But the slow pays persisted.
I have called multiple times every month to talk to her. And I discussed with her daughter that Mom needed to find a different place to live if she can’t pay on time. But she and her druggie son have not moved out.
She finally paid the November 2011 payment in early December.
The December payment has not been made. So, two days after Christmas she got a 3-Day Notice to Pay. (I just could not send it the week before Christmas)
Tomorrow, I’m filing for an eviction for an 85 year old lady. It’s the hardest thing I’ve ever done and it breaks my heart.
In Texas, it’s pretty fast. They will give me a court date about 7-10 days from now. Then the Judge will give her 5 days to get out after that.
I’m sure the house will be a mess and will cost $3k-$5k to get back to rental condition OR I could just sell it “as is” with seller financing.
Now the January payment is due too. So I’m $1800 in the hole and I just had to write a check for $2800 in property taxes today. The last thing I want to do is sink more money in to the house.
So, the moral of the story is – never EVER rent, lease/option, or sell with seller financing to someone you would have a hard time evicting.
If this was anyone else, I would not have put up with all the late payments for so long. If this was anyone else I would never forgive payments. And if this was anyone else, I would not anguish over taking the steps I should have taken a long time ago.
Jack Miller shared so much great advice with us about how to have a successful real estate business. Luckily, we have it all archived at www.CashFlowDepot.com but you need to take action and FOLLOW the advice.
You might think that you can evict an 80+ year old person but if the need arises I can assure you that it will be very very hard.
I hope your 2012 starts out better than mine!
To Your Success,
Jackie Lange
P.S. Congratulations to Don Wede who won the contest for the most posts in the new forum. He won a 1 year membership at CashFlowDepot.com PLUS the Movers and Shakers Online Seminar which is the recording of the 2011 CashFlowDepot convention. The most successful CashFlowDepot members shared their best tips, tricks, and strategies at the Convention.
Congratulations also go to Paul Julian who won the Kindle Fire in the Gift Membership contest. Paul purchased gift memberships for 3 friends and family members.
