Investors Unite! By Mike Rukivina

Mike Rukavina is the past president of Ohio REIA and Stark County REIA and is an investor and landlord in Canton, Ohio. He’s come up with an interesting idea here that, if we could create a nationwide movement to accept it, would have a verrrry interesting effect on landlords...
I just wanted to share with you how we try to go the extra mile when we can when dealing with potential tenants and while simultaneously looking out for other housing providers. As you know, the current soft market has left us with an absolutely deplorable reservoir of tenant candidates from which to choose our next renters. The vast majority of them have horrible credit, evictions, judgments, etc., yet they are looking for that ‘second chance’ to start fresh with us. After doing our due diligence and then sometimes offering possible tenancy on a probationary basis (…extra criteria and stipulations as mutually agreed upon to avoid Fair Housing claims for going outside of our normal treatment of tenants) to some of these candidates that we truly feel are deserving of that ‘second chance,’ we often find that they left their last residence owing a judgment to the last housing provider or unofficially owing him money where a judgment was never actually sought, but nonetheless, both parties agree that money was yet owed. This usually occurs where the amount owed is $500.00 or less.
In these cases, we have offered tenancy to the candidate based on his agreement to make total restitution to or payment arrangements with that previous housing provider prior to agreeing to sign a lease with us. When they do not have enough funds to take care of the last housing provider as well as rent and deposit with us, and where the owed amount is small (about $200.00 or so), we have even gone so far as to let them make payment to the prior housing provider first; pay our deposit second; and then pay the balance of their remaining funds toward the first month’s rent (in that order so we can still move to evict for non-payment of rent if needed) to us with promise to bring the remainder current by no later than the next month’s due date; and of course, we follow up with that fellow housing provider to see that it actually happened. If they actually do these things, then even though I have risked a partial month of rent, I have educated a tenant as well as another housing provider; and I have done a service to our industry. As far as my partial month of payment risk, I believe it has been minimized if this person actually did the responsible thing by paying the past housing provider, as they then truly are trying to correct their past mistakes and should now become a better tenant for me and all future housing providers.
Now I just started doing this less than a year ago, so I don’t have a lot of history yet, but the little that I have will probably hold true statistically. I have tried this about 8 times so far (with a 9th in process now) with 2 (25% - but you probably figured that)) success stories; a couple of others left my interview saying that they would do that and be back in a couple of days…and of course, we never saw or heard from them again. That is okay for us because they probably would have stiffed us also, but no doubt some less diligent housing provider down the road will take them, eventually get stiffed, and the cycle continues to perpetuate.
I am also attaching my recent letter to Vivian. Vivian spent six years with one housing provider (whom I know personally), then 3 years with another housing provider (whom I know personally), and then she bought a house which she subsequently lost 2 years later after 2 back-to-back family deaths (husband and mother - which I verified). Both prior housing providers said that they would not classify her as a ‘great’ tenant, but both agreed that she was far above average, especially in today’s market…and both indicated that they would not have a problem in renting to her again, though the most recent one said she left owing them $180.00. When I confronted Vivian with this information, she knew exactly what I was talking about and immediately and confidently said that she remembered making that payment to Lucille – even indicating that she had a receipt for the same, though it was packed away somewhere now that they were preparing to move…questionable, but plausible. If it were not for her confident statement and the plausibility that it would be packed away right now, I would have demanded that she make payment to that prior housing provider before I rented to her. So instead, I simply asked her to provide me with a copy once she got into the house and got unpacked.
Vivian moved in on April 7th, and she sent me a receipt copy on April 16th. As a 21 year veteran investor, and having spent 15 years on the police department, this was not my first time around the block…and it did not take a rocket scientist to suspect that this receipt was not the real thing. From here, the attached letter will speak for itself, and I will have to let you know how it turns out.
In conclusion, I am sharing this with you so that you might share it with your students and readers as you see fit. I know that you already urge (pound into their heads is more like it) housing providers to conduct due diligence on a regular basis, but if we could get a movement like this started across the country to let tenant candidates know that they are going to be held accountable before they can rent their next domicile, we would accomplish one more step in improving our industry for all of us. Success stories would certainly only inch along for some time, especially in soft economies, but with persistence, who knows, maybe utopia could someday be attained.
To: Ron & Vivian Smith Date: 21 April 2006
1650 Easy Street
Canton, OH 44706


Dear Ron and Vivian,

I am in receipt of your letter of 4/16/06 in which you enclosed a copy of a receipt from Nancy Mccoy for that $180.00 in question at the time of your application. Upon my own initial inspection, I was very suspicious of this receipt: you told me that Lucille Mccoy wrote the receipt – not Nancy, yet the receipt is from Nancy; the Mccoy’s do not capitalize the second ‘C’ in Mccoy; there is no detail as to what the rent was for; and after showing the amount owed on the account, the bottom line still reflects the same amount due; and finally, just as I conducted my due diligence at the time of your application (how else did I know about the $180.00?), I also forwarded a copy of your receipt to Nancy Mccoy who confirms that that is not her signature; that Lucille is the one that collected these rents; that they do not capitalize that ‘C;’ and that is not the same type of receipt form that they use in their business. If there is some other plausible explanation for this event, please inform me of the same.

Vivian, I know about 80% of the landlords in the Canton area, and I happen to be personal friends with Sam and Nancy Mccoy. Sam and I worked on the Police Department together…and this is not my first year in business as a landlord. On the contrary, I ‘teach’ many other landlords how to become better and professional landlords. When I questioned you about the $180.00, the best thing that you could have done is told me the truth instead of giving me a fabrication, and then going one step further by forging a receipt. Previous landlords have indicated that you were a ‘better than average’ tenant, and I believe that you probably will be a pretty good tenant, but you are not starting off on the right foot with the cats (even temporarily) and with this phony receipt. We are good landlords that provide clean, safe and healthy homes at reasonable rental rates. In return, we expect our tenants to be honest; we expect them to pay their rent on time; and we expect them to take care of our property. In that manner, we each provide the other with something that the other one wants or needs.

At the very top of your Application for Tenancy (which becomes part of your rental agreement), it states that “Misrepresentation shall be cause for immediate termination of agreement.” We are not looking to terminate your tenancy for this particular misrepresentation, but we are looking to hold you accountable to this past housing provider, just as we would want any other housing provider to look out for us. Please submit a money order or certified funds in the amount due to the Mccoy’s, made out to: S and N Love LLC, and remit the following to my P.O. Box so that I can forward it to them; or you may send it to them directly, requesting that they notify me of its receipt. This is the responsible thing to do. Take care of this small matter, and we can all put this behind us and move forward on to a mutually beneficial landlord/tenant relationship.



Sincerely yours,


Michael A. Rukavina
General Manager


Bcc: Sam & Nancy Mccoy