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Legalized Scamming (Rental Property Stories from HELL)

MJ DeMarco

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I hear "legalized scamming" is pretty common in California.

If this don't infuriate you, nothing will.

Premeditated? You bet. Just another Sidewalker fishing for free rent, free money or better yet, lawsuit money.

http://finance.yahoo.com/news/airbnb-host-guest-squatting-condo-174800953.html

Airbnb_Host_A_Guest_Is-fa14595d3e317e3b6d1db2df5fded459
 
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AllenCrawley

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Boo Blizzi

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Stuff like this is what makes me hate being a section 8 landlord. It's an undeserved sense of entitlement and ownership.

Quick story...

A few months ago, I was evicting a tenant. On the lock out date (day the judge gave her to be out) I went to the unit early in the morning. Her boyfriend is sitting on the couch watching a replay of the playoffs, talking about, "If you saw the game, dont tell me what happened."

Im looking around and hardly anything is packed up. Right then, I knew it was going to be a long day. I call the tenant down and ask whats going on? She said she's waiting for the moving truck to come at 10am, so I said I'll be sitting outside waiting for my keys.

10 rolls around and no truck. At 11, I go and knock on the door. She comes to the door, looks out the window, but doesn't let me in. Im like "oh boy".

So I call the sheriff to conduct the removal and as Im waiting for them to show up, she starts passing her little children out of the first floor window to some lady that walked up with a stroller. (I think maybe her sister).

Long story short, when the sheriff came, she barricaded herself in the house by pushing the couches and boxes up against the door. Then they told me I would have to wait till 5pm to get her out. I got so disgusted, I left. I sent my contractor over to the place to change the locks and he said the front door was knocked off the hinges and the place had been vandalized.

I dont have to tell you how pissed I was.
 

parkerscott

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Stuff like this is what makes me hate being a section 8 landlord. It's an undeserved sense of entitlement and ownership.

Quick story...

A few months ago, I was evicting a tenant. On the lock out date (day the judge gave her to be out) I went to the unit early in the morning. Her boyfriend is sitting on the couch watching a replay of the playoffs, talking about, "If you saw the game, dont tell me what happened."

Im looking around and hardly anything is packed up. Right then, I knew it was going to be a long day. I call the tenant down and ask whats going on? She said she's waiting for the moving truck to come at 10am, so I said I'll be sitting outside waiting for my keys.

10 rolls around and no truck. At 11, I go and knock on the door. She comes to the door, looks out the window, but doesn't let me in. Im like "oh boy".

So I call the sheriff to conduct the removal and as Im waiting for them to show up, she starts passing her little children out of the first floor window to some lady that walked up with a stroller. (I think maybe her sister).

Long story short, when the sheriff came, she barricaded herself in the house by pushing the couches and boxes up against the door. Then they told me I would have to wait till 5pm to get her out. I got so disgusted, I left. I sent my contractor over to the place to change the locks and he said the front door was knocked off the hinges and the place had been vandalized.

I dont have to tell you how pissed I was.
Pure scum with no integrity at all.
 
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Boo Blizzi

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Pure scum with no integrity at all.

You have no idea... I made a giant mistake investing in a low income area. The cashflow was enticing when I first analyzed the deals, but I didnt account for the higher maintenance costs and headaches. It makes the business unbearable.

Another story...

I have a tenant right across the street from the deadbeat I mentioned earlier. On my way into the neighborhood, I see her walking with her daughter. She stops me and tells me the reason she was $200 short on last months rent was because she broke up with her baby-daddy and he moved out.

I say, "OK well you have a late fee of $100 so this month I expect $300 extra." I go off to handle my business, and before I leave, I knock on the door. Her sister opens the door and who do I see sleeping on the couch? The baby-daddy who supposedly moved out. And not only that, he is wearing new Jordans, the kids are wearing Jordans, and there's a new flat screen TV.

I never got full payment, so I filed for eviction and she's due to be locked out tomorrow. Wish me luck... lol
 

parkerscott

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You have no idea... I made a giant mistake investing in a low income area. The cashflow was enticing when I first analyzed the deals, but I didnt account for the higher maintenance costs and headaches. It makes the business unbearable.

Another story...

I have a tenant right across the street from the deadbeat I mentioned earlier. On my way into the neighborhood, I see her walking with her daughter. She stops me and tells me the reason she was $200 short on last months rent was because she broke up with her baby-daddy and he moved out.

I say, "OK well you have a late fee of $100 so this month I expect $300 extra." I go off to handle my business, and before I leave, I knock on the door. Her sister opens the door and who do I see sleeping on the couch? The baby-daddy who supposedly moved out. And not only that, he is wearing new Jordans, the kids are wearing Jordans, and there's a new flat screen TV.

I never got full payment, so I filed for eviction and she's due to be locked out tomorrow. Wish me luck... lol

lololol I really hate people. She is probably going to come up with some story about how she wont have any place to live, and once you lock the doors, she is going to be crying on the curb with her new flatscreen.
 

Boo Blizzi

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lololol I really hate people. She is probably going to come up with some story about how she wont have any place to live, and once you lock the doors, she is going to be crying on the curb with her new flatscreen.

LMAO... she did that last Thursday at court. I told the judge about the new stuff in the house, and she was like, "It didn't cost much, I got it from Rent-A-Center." Me and the judge just looked at her like she was crazy.

So you can go and rent a TV and an Xbox, but you cant pay the rent for the house you have it in??

The mentality of the people Im dealing with is beyond slow lane. The mother's raise the kids to cut corners and try to milk the system.
 
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parkerscott

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LMAO... she did that last Thursday at court. I told the judge about the new stuff in the house, and she was like, "It didn't cost much, I got it from Rent-A-Center." Me and the judge just looked at her like she was crazy.

So you can go and rent a TV and an Xbox, but you cant pay the rent for the house you have it in??

The mentality of the people Im dealing with is beyond slow lane. The mother's raise the kids to cut corners and try to milk the system.

Oh im well aware of the mentality of these tennants. They are the same type of people to take you to court over a plumbing issue when they are not even paying the rent. They are worse than parasites. Most parasites dont try and kill the host.
 

Boo Blizzi

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Oh im well aware of the mentality of these tennants. They are the same type of people to take you to court over a plumbing issue when they are not even paying the rent. They are worse than parasites. Most parasites dont try and kill the host.

Dude, I got tenant nightmare stories for days... please don't get me started. I dont wanna hi-jack this thread, but real quick...

I had a mother and daughter occupying a 2br. The mother was an asst. principal and the daughter was a nurse. They always paid late, but I was wacking them with $150 late fees, so I didn't complain much.

So they get behind 2 months and I take them to court. When we get there, I notice they are sitting with a lawyer. Im not stressing it because I know Im in the right.

Long story short... we get in front of the judge and the lawyer says she want to file a counter complaint and have whats called a "habitability hearing".

I got a smug look on my face like, "Whatever, you didnt pay your rent... you gotta go." But the judge said the motion granted. Im confused. I never went through that part of the land-lording game before so they had me painted in a corner.

We have the hearing and they show pictures of the ceiling in the kitchen falling down from water damage. Mind you... I never heard about this problem because they were always ducking me with the late rent. The judge tells me the $4k judgement Im seeking will be dismissed if I dont get the problem fixed by the following week.

I send the contractor over to fix the place, but they wont let him in the house. So I go down there with my keys and come to find out, they changed the locks. So the week is almost gone and they aren't returning calls or letting anyone in. I make an executive decision and me and the contractor break in the house to do the work, then take pictures.

And the kicker is, there was no plumbing problem. The ceiling was leaking because these nasty chicks were taking showers with no shower curtain and letting the water run on the floor for more than a year.
 

MJ DeMarco

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I dont wanna hi-jack this thread, but real quick...

I don't consider it a hijack. It reminds me why I don't own rental property... or I should say, rent to strangers.
 
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pro

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California is ridiculous for several reasons.
  • $800 franchise fee per year just to keep a corp up
  • Higher than average taxes - California is broke
  • As an employer, the labor law compliance is ridiculous and employees can waste your time with ficticious labor board compliants. If you fire an employee, they can claim unemployment against you -- the state thinks you are obligated to pay an employee because you took a chance hiring them.
  • Tenant law as you pointed out above
This is why I do support it splitting up into six states: http://www.newsweek.com/billionaire-proposes-splitting-california-six-states-259083

I think the key lesson is what Boo Blizi said, "I made a giant mistake investing in a low income area"
 
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AubreyJ

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I am actually going through a some what similar situation in a condo I own. My tenant thinks that paying rent is something that is negotiable, rent will be due at the beginning of the month and she will call me up and say "How about this month I pay 900 instead of 1200?"

I got sick of it, and asked her nicely to leave. I said that I would terminate her lease and there would be no lawyers involved. But she refuses to leave until I pay her 2 months worth of rent! So now I have to go to court to get her evicted, because now she refuses to leave and she refuses to pay.

I hate people like this, they are just parasites who think they can leach off of everything and everyone. In my situation, I think my tenant thought that she could push me around- I am about 10 years younger than her, but I look like I could be 17. But regardless, people like this are disgusting.
 

Boo Blizzi

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It reminds me why I don't own rental property...

I am trying to liquidate my rental portfolio now. If I touch anything residential going forward, it will be a flip.

This experience has made me only want to operate businesses where I can terminate service as soon as the customer misses a payment, like cell phones or the cable company.

I love SaaS businesses because there is no ongoing fees to maintain the asset (aside from hosting) and when you make one improvement, it benefits your entire customer base.
 
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MayaMagpie

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The landlord business here in the UK is not even that lucrative. My boyfriend has a flat that he rents out, and after he deducts all fees and mortgage payments, he's almost making a loss. Plus, his tenants like to smash up the tiled floors and kitchen every once in a while. Not good.

As for AirBnB, it's a real shame. As much as I like the concept of what they're doing, they are not that great at solving conflicts. have had trouble before, as guest, and all I got was a voucher from them and an abusive email from my host. In regards of this scamming disaster, they really need to educate their hosts some more. And California laws are, as the British say, bonkers.
 
A

Angus

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i can't believe that there are people so evil in this world
causing suffering in other human beings for what? some piece of paper?
it's sick.. and disturbing
money should be a sign of value, not a sign of who's the best scammer
what a place we live in...
 
D

DeletedUser12

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I had a friend who owned a small house which was not occupied, just used to store some of his stuff. Well a couple breaks in and squats in his house and by the time he realizes someone is living there, he has to go through an eviction process.
 
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MJ DeMarco

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I am trying to liquidate my rental portfolio now.

With everything you just described, I can see why you'd come to that conclusion.
 

parkerscott

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In for more tenants from hell, also in for stories of gypsies. They are probably both the same though.
 

Mike Kavanagh

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My question is, If the person is "legally" living because of the 30 day tenant thing, where is the contract stating he is a resident that this person signed? Where is the payment? Was it on AirBnB?

AirBnB hasn't been able to contact him nor did he pay therefore the contract is null.

Cut the electricity. Make this person's life a living hell. If he is a tenant, it is his responsibility to provide electricity to the house. Let him try to sue.


If he wants to drop bombs, I would drop f'n nukes.
^Semi-stolen from @Vigilante
 
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RHL

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"My income while working averages $1,000-7,000 per day." Right. Because that's what someone making 2.55 million dollars a year does, they rent someone else's condo for a month, then try to get out of all fees on a technicality. I'd have gone straight to small claims. I bet his income is a lot closer to $10-70 per day.
 
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The-J

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"My income while working averages $1,000-7,000 per day." Right. Because that's what someone making 2.55 million dollars a year does, they rent someone else's condo for a month, then try to get out of all fees on a technicality. I'd have gone straight to small claims. I bet his income is a lot closer to $10-70 per day.

No, he COULD be making that kind of money... but it sure ain't legal the way he's making it. I bet he's renting AirBNB and squatting (and probably using an assumed name) in order to get away with whatever income he IS making, no matter if it's $10/day or $7,000/day
 

BlakeIC

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LMAO... she did that last Thursday at court. I told the judge about the new stuff in the house, and she was like, "It didn't cost much, I got it from Rent-A-Center." Me and the judge just looked at her like she was crazy.

So you can go and rent a TV and an Xbox, but you cant pay the rent for the house you have it in??

The mentality of the people Im dealing with is beyond slow lane. The mother's raise the kids to cut corners and try to milk the system.
My dad rents out his beach house in eastern washington and there is always things being broken by the rentors and stains of make up and other crap always left in the carpet


edit: reminds me of another time when people were renting out the house and the people that were occupying it went an egged the neighbors house
 
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RHL

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When I was growing up, a friend of mine's father owned a pluming contracting company, and dumped his fastlane money into rentals. He rented one out to a friend's family who was known to all of us. They were perpetual slowlane/sidewalkers, but generally seemed to be honest and care about everyone while they tried to scrape by.

They got a month behind on the rent. The husband was out of work, the woman begged for an extension based on 12 years of prior friendship. They agreed. Another month. Again, they came up with a small partial sum, like 40% of the rent for one month if I remember correctly. Month 3, a confrontation occurred. The woman told the landlord('s wife): As soon as we get back on our feet, we'll pay you the whole sum back with interest. I'll never forget her exact words, as relayed by the landlord: "We are people of integrity."

Three days later, they left. They stole everything they could take in the house, (light bulbs, etc.) right down to the 9-volt batteries in all the smoke detectors. They didn't trash the place (more than normal living wear and tear), but they were gone, and never heard from again. Police were unable to locate them. I think they assumed that because the other family was rich, they wouldn't miss that stuff, or the $5,000-ish in rent money.

That was the moment that I decided I would never, ever, get in the rental business, and since then, I've seen hundreds of anecdotes to confirm that. A guy in Trenton renting from my former co-worker ravaged the rental and ran up $7,000 in electric bills, and ran a prostitution ring out of the house, vanished into the night, nothing happened to him, landlord was out a crapload of money and 2 more months rent repairing the place. People who rented above us when I was in grad school had the police called on them by other neighbors (and us, once) 17 times in 12 months for domestic disturbance and probable battery, nothing happened because they paid their bills. The Landlord had to wait till the end of the year to deny their lease renewal.

The laws are all in place to rape the property owner of their source of income and entitle the renter to free housing should things go south. Up here in the north, evicting a deadbeat from your property in the winter months is basically impossible because of laws to prevent homelessness during those cold periods. I will never get into an industry where product I produce can be consumed without compensation or recourse. I will never get into a fastlane industry that ties my hands with slow-lane bullshit like having to repair my property at my expense after a vicious (and broke, so no recourse in court) renter vandalizes it. I will never be in an industry where there are massive barriers to my getting paid for a service I rendered effectively, barriers that can be raised by the consumer against me whenever their caprice dictates. I did not get free from the need to be shackled to a job to become a slave to other people now that I am in the fastlane.
 
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Formless

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Haha, good thread.

Now I know what to stay away from.

What a shitty way to earn money.
 

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Isn't there a fastlane opportunity here? It's easy to jump on the bandwagon and complain that renting sucks, too many millionaires have been made to overlook it though...renting out your condo on airbnb is a convenience for the owner of vacation properties/second homes, not a business strategy. The $5000 to evict etc may be money that would have been spent anyway had it not been occupied in the first place.

The 30 day rule seems to be the kicker here...but if you are in the business of depending on state regulations to protect you, that's not much different than depending on the rules of a pyramid structure to be your wealth cashflow. Real estate still follows other rules...make money while you sleep, you can hire property managers and still come out positive cashflow, you have leverage of other people's money, it still has real asset value, whether it is sold for profit or loss still depends on where you bought it at and why. As for cashflow/margin of safety with rental properties...you kinda need to act like the insurance company and put money back for freak things that can happen...when you buy a car you don't just budget for the payment, you budget for gas, repairs, maintenance and freak things like flat tires and carpets rolling off trucks on the highway which happened to me this morning. When you don't, that's when the horror stories manifest.

One issue with real estate is that you can put most of your net worth into just one vehicle which can go good and bad for you, but still dependent on fastlane principles. It also takes more hours of work and upkeep than you may be willing to offer (compare worth of working X hours more on the plumbing business vs 2 hours managing rents, fixing up places, long-term leverage/compounding).

I do not own a rental property but I just feel like there's a devil's advocate argument here that's pro-Fastlane. Seems like a lot of the horror stories are for low-income tenants with individuals who are doing this as a hobby on the side, not a main business. On the fastlane side, you can earn substantial cashflows with like 35% return on capital for low-income housing, more than enough to hedge on legal expenses etc to flush them out. Still comes back to why you bought in the first place.

One thing about real estate and stock portfolios are these are ways the rich maintain their wealth...not necessarily how they make it. The initial burst of cashflow still needs to come from somewhere. Outside of leveraged cashflow, homes are otherwise risky forced savings vehicles and that mentality still evades people.
 
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