Owning commercial real estate is a totally different game than residential. Especially when dealing with small businesses. The people that I’ve dealt with are unbelievable. This is one of the many stories.
Sometimes I’d get a corporate tenant in one of the commercial spaces and it would be great. I’d receive rent on time every month and they wouldn’t mind about small increases. Usually they were headquartered in a different state and would have minimal contact with me. But that’s not the case every time. The stores were in a tertiary market, so not downtown, not in an upscale suburb. But in a decent blue-collar area.
Dealing with small business owners as tenants can be extremely challenging. They always try to test you. If you have a small check cashing place or sandwich shop as a tenant. They might not always be making the most money or be the most ethical. They constantly try to challenge you.
I had an off brand non-standard insurance company there and it was going well for a little over 2 years which made me suspicious. Then the complaints and excuses eventually started to roll in. I have managed this mini mall on my own and have used a management co. it was much better using the company which I always advise. So, this insurance salesman would tell me that he only uses half of his unit and he should only have to pay half the rent. Right then I knew his business wasn’t doing well and this wasn’t the last of the BS I’d have to put up with. I laughed at him at told him no, he has to pay the full rent. He did for a while, then the problems started.
The months went by and he’d be late and later with the rent. I knew the end was coming. I always dread having a vacancy in this strip mall. Its always hard to fill them. He eventually stopped paying. He gave me every excuse in the world. I was cool with him for a month, so he could get his money together, but as I always learn, when I’m nice I always get taken advantage of. The second month he didn’t pay I told him he needs to get out. I filed for eviction. I immediately knew I needed a property manager and hired one right away too. As my portfolio grew I would never go back to self managing. This manager really wasn’t the best but that’s another story.
So not only did I not receive rent for a couple months, I was going through an eviction, and would have a vacancy soon. I talked to the tenant one last time and told him my manager is dealing with this from not on. I told him he hasn’t been paying rent that’s why he’s being evicted. I told him its fine, just leave. I actually remember this conversation, I was at work at one of the shitty corporate jobs I had on the second floor of my office. I was in a quiet hallway talking to this loser tenant. He was telling me he has money and he has 100K in his checking account and that he can pay. There’s no way I’m falling for this. No, you have to leave. He said fine. I was professional about it too. A week later I went there and the place was vacant. I looked for damage and it looked ok. He left some huge heavy desks that I would keep there for the next tenant. There was some office equipment there too. I thought great, I saw some phones, printers, copy machine. I went to grab them and take them to my car and realized this loser cut all the cords on them so I couldn’t use them! Instead of throwing them out in the dumpster he left them for me to clean up but didn’t want me to benefit from them. This guy is such trash. I was glad to get him out. I went to the back door to throw out the useless office equipment in the dumpster and when I opened the back door the alarm started blaring!
It was never disconnected. So, there I am in a vacant store front with the alarm blasting. The cops never came because he wasn’t paying the bill so it wasn’t in service. The neighbors came by and stared at me, I waived at them and told them it was ok. It was pretty embarrassing. I called the number on the alarm box and walked outside. They walked me through what I can do but the alarm wouldn’t stop. They knew the system wasn’t in service so they didn’t call the cops. I hung up and went back inside and started ripping everything I could see out of the box, off the door, out of the plugs, everything. It kept ringing for a few minutes but then just stopped… I couldn’t be more relived. I think the damn siren just burnt out, or there was a set max time on it. I called back the alarm co. and told them it stopped, they gave me a few suggestions for the alarm and also told me something interesting. They told me the agent who owned the franchise said his franchisee went out of business, not him and he was being forced to close up. He still owed the alarm company money too! I laughed and told them, he owed everybody in town money.
I eventually got everything cleaned up and rented again, but when it was all said and done, I probably lost out on $10,000 worth of rent and touch up on the building when this loser moved out.
This was a difficult situation, it could have been much worse, at least he didn’t completely trash the place. I instantly knew that when the excuses start coming, and you can detect lies, just get the tenant out as quickly as possible.