As far as handling non-paying tenant/buyers, actually this is very rare for me these days. I make sure that people udnerstand that they are BUYERS. I also collect a NON-REFUNDABLE deposit of 3-5% of the purchase price, which goes a long way in motivating people to stay current on their payments.

Also, I make all my payments due on the 25th of the month. That way, I have time to collect all payments before my payments are due on the 1st. If someone is late or stops paying, I can file an eviction before my payment is even due! This usually motivates them to get the payment to me as well.

I also tell all my tenant/buyers that I am the easiest guy in the world to work with IF they stay in touch with me. If they are going to be late on their payments for any reason, I tell them to call me and we'll work it out. The problem only develops if they don't pay and don't call.

Here's an example- I had a tenant/buyer call my office and tell me that he was going to be late with his payment. He told me that he remembered how I told him that he just had to call if this was going to happen and I would work with him. He sounded a bit scared and sheepish, so I immediately put his mind at ease and told him I appreciated him making the effort of calling.

I then asked what the problem was. He said that his wife had just had a baby and they had some unexpected expenses come up because of it. He said he was working some overtime to make up for it, but was going to be 2 weeks late on the rent. I congratulated him on the new addition to their family and told him not to worry and I wouldn't be charging him a late fee or anything.

Well, 10 days later, his check arrived at my office along with pictures of his new baby in the envelope! He had even paid me 4 days before he said he would. After I closed my office for the day, I went to Walmart and got a gift card for $50 and a "Congratulations on your new baby" card. I mailed this to him with a note saying that the $50 was to help with any new baby expenses like diapers or clothes.

This is the type of relationship I establish with my tenant/buyers and why it is VERY rare that anyone just stops paying. Now of course, if they did and did not communicate with me, I simply file the eviction and get them out. If they have done damage (NEVER happened to me, again because of how I treat my people) I would get a judgement against them for the amount, but I also immediately have their deposit to help pay for it.

That's how I handle my business.

Matt Bowman
Related link: www.REItoolbox.com