Would You Lease To This Mystery-Tenant?

With new legislation continuing to favour tenants over landlords, a landlord has to make very sure that he or she wants to effectively be “partners” in a real estate investment, since a tenant is very hard to remove once the lease is signed and the key is in the door.

I’ve always been extremely diligent when evaluating candidacy for my investor-clients.

Last month, I received an offer on a rental property with a very mysterious tenant.

Let me tell the whole story, and you decide whether or not you’d have this person as your tenant…


Okay, maybe that photo is a bit overboard.

It’s not like we didn’t see the tenant’s face in the story I’m about to tell.

But even when you do meet the tenant, and even when he or she is nice, pleasant, says all the right things, and seems trustworthy, it can blow up in your face.

Last month, there was a story about a “professional scammer” in Liberty Village who had duped at least twelve landlords and/or roommates.  Read the story HERE.

I’m also reminded of another story, this one from 2016, which is a classic “don’t judge a book by its cover” lesson.

As this article reads, a “well-dressed, professional-tenant” had been duping landlords in Yorkville, and gaming the system designed to protect both landlords and tenants.  A 62-year-old man, seemingly-normal, wearing a suit, with tales of his career as a professional, had been moving into expensive condos, not paying the rent, and then forcing the landlords to chase him through the courts for eviction.

As I tell my investor-clients, the professional scammers usually stick to online ads, and don’t look to MLS for their prey.  If they do, they’re looking for an absentee-landlord, with an absent-minded agent, and if and when they’re pressed on personal info, they’ll simply flee, and move on to an easier target.

Nonetheless, I try to be very diligent when looking for tenants for my investor-clients, while trying to avoid doing anything that could be construed as “discrimination.”

What actually is discrimination can change like the direction of the wind, and as the word gets softer, and a lot weirder as we wind down 2017, I think a lot of people would cry “discrimination” if they could.

This is why when rejecting a candidate, you simply say, “We’re going in another direction,” and not answer any follow-up questions, as was the case last month when my investor clients turned aside a rather mysterious tenant.

Mysterious might not be the right word, as I alluded to above.

But “sketchy” is fair.  And I’m sure we could think up some other words to describe her.

But in the end, we just didn’t think she passed the “sniff test,” which is a very inexact science, but one that is often the most useful, nonetheless.

As is the case with many of my stories, I’m going to change some of the details to try to protect anonymity…

I had a listing for a 1-bed, 1-bath condo in the west end, up for lease for $1,995/month.

Surprisingly, it didn’t lease in the first 12 hours like most places in this red-hot Toronto rental market, and it actually sat for a full week!

On the eighth day of the listing, I received a phone call from a rather young agent who said he would be submitting an offer on behalf of his client, and that the client was a “Triple-A tenant with great income.”

He wasn’t wrong, on the latter part – at least not at face value.

Upon receiving the offer shortly thereafter, I scanned through the supporting documents.  Those documents, for those of you that don’t know, are usually the following:

1) Rental Application (OREA document – name, DOB, address, last two places of residence, occupation, present and prior employment, financial obligations, personal references, etc).

2) Credit Check (I always ask for Equifax, full version, with the “FICO Score” and all debt as well as credit inquiries).

3) Employment Letter

Beyond these, however, I insist upon “proof” of employment, such as recent pay stubs, or a screenshot of a bank account showing deposits from the employer.

I also look up the tenant on LinkedIn (any business professional without LinkedIn is suspicious), Facebook (see how they act in their spare time), Instagram, Pinterest, and anything else I can find online.

So upon receiving these supporting documents, the first one I looked at was the employment letter.

That was the first red flag.

Wait, that’s not exactly true.  The very first red flag was the very first thing you’d see on any rental application or offer: the tenant’s name.

Ruby Starr

Yes, this tenant’s name was Ruby Starr.

Now, I don’t think you have to be a regular visitor to websites that would crash your hard-drive to think that perhaps a name like “Ruby Starr” might be one you’d find in the world of adult entertainment.

The name was a bit odd, but I moved along regardless.

I got to the employment letter, and that’s when my spidey-sense really started tingling.

Ms. Ruby Starr, apparently, made $95,000 per year working at a sandwich shop.

But it wasn’t just any sandwich shop; it was one in Niagara Falls.

It really didn’t make any sense to me.

And the letter was on a blank, white, standard, 8 1/2 x 11 sheet of paper, typed in Times New Roman, and signed by a guy whose name was something out of The Sopranos.

I looked up the sandwich shop, and they did indeed exist.  Not only that, they were quite well-known, with five locations in Niagara Falls.

The employment letter said that Ruby Starr was going to head up the expansion plan of this “family company” that sells sandwiches in Niagara Falls, as they look to open two locations in Toronto.

I called the gentleman who signed the letter, and he sounded somewhat legit.  He said that Ms. Starr would be driving around to different suppliers, managing the new locations, overseeing the construction, etc., and it all sounded good until he sort of trailed off, like he was focused on something else but still trying to speak into the phone, and he just started muttering random words like, “direct suppliers…….bakery buns…….you know, cold cuts………like two locations………it’s all good……..salads too.”

I can’t quite explain it, but I felt as though the person I was speaking to wasn’t really all there on our phone call.

I followed up with the cooperating agent and asked for a few recent pay stubs, and he emailed them to me within five minutes.

That was either very helpful, and convenient, or it was suspicious – as in why didn’t he send these over with all the other supporting documentation before?

The “pay stubs” weren’t really stubs of any sort.  They were basically two PDF’s, which contained deposit amounts and looked as though they were typed in Excel.

Anybody could have typed those up, clicked “Save as PDF,” and called them stubs.

But even more suspicious now was the fact that the address on the pay stubs didn’t match the address on the rental application, which upon further research, didn’t match the address on the driver’s license.

And I’m not sure if this matters, but that driver’s license had expired.

So we had three different mailing addresses, and none of them were in Niagara Falls where Ms. Starr apparently had worked for the past six months – according to her rental application.

Oh, wait, one more thing – the guy from The Sopranos said she had been working for him for over a year.

It was all pretty messy, if you ask me.

This girl made $90,000+ working for a family sandwich-chain, in Niagara Falls, having never lived there, and she had three different addresses.

And her name was Ruby Starr…

I looked her up online, and she had no LinkedIn profile.

I found her on Facebook, and she looked……..well……

….well, I asked one of the younger guys in my office, “Hey, what does this girl look like to you?”

He smiled, as though it were a trick question, and said, “I dunno, an escort?”

I asked him, “Come on, be serious.  What do you think when you see this photo?”

He said, “I think that girl is probably at that club (in the photo) to meet rich men.”

He identified the club as Cabana from the background, and then we went through four or five other photos of her at clubs, which he identified.

I felt somewhat guilty, simply judging or labelling this girl because of how she looked.  But the name!  I couldn’t get over the name!  The $95,000 salary too!  It didn’t add up.

I discussed the situation with my landlord-clients, and they said they wanted to meet Ms. Starr.

So I told the cooperating agent that my landlord would be at the condo on Saturday, and she could drop by and say “hello.”

My clients Brad and Allison, called me after the meeting, and they were pretty coy.

“We’re not quite sure what to say,” Brad told me.  “Something was…….off.”

“Yeah, something was off.  That’s a good way to put it,” Allison said.  “The girl just seemed so spaced out, and nervous!  Oh my word, was she nervous!  She wouldn’t look us in the eye, she kept staring at the floor, and she kept fidgeting.”

I asked for them to tell me a little more about her, and they said things like, “She was nice,” and “She seemed pleasant,” but it wasn’t really what I was getting at.

So I said, “Brad, I’m going to ask Allison this question so you don’t get in trouble.  Allison, was this girl attractive?”

Allison said, “Yes.”

I asked, “Very?”

And Allison said, “She was a rocket, David!  A rocket!”

Brad laughed, and said, “Yeah, look, I don’t know what she does for a living, and maybe part of me doesn’t care, but something seems off here.”

Brad then asked if her boss told me what she was doing, and I said yes, that he said she’d be driving around to different suppliers, the various locations they were opening, etc.

There was a pause, and then Allison said, “David that’s so odd, because we asked her if she wanted to see the parking space, and she said she didn’t have a car!”

That was strange.

But even stranger was when Ms. Starr also said she hadn’t seen the condo!  She said, “My agent just made this offer for me; I haven’t seen this place yet.”

Everything that this girl said raised another red flag.

At one point, she said she didn’t know where the two new sandwich shop locations were going to be, and when pressed, she said, “I can’t tell you, we’re not telling people.”

Then somehow or other, her background came up, and she said, “I’m from Russia, but I was adopted by a very wealthy family.”

When asked about the three addresses she provided, she said that she had just broken up with her boyfriend, and the address on her pay stubs were from his place, but she was staying with her parents (the second address), and she simply “forgot” what she was doing when filling out the rental application with the third address, because she was “rushed.”

It didn’t add up.

She made almost $100K per year working for a sandwich shop in Niagara Falls, but had never lived in Niagara Falls.

She provided us with three different addresses.

Her only piece of ID was an expired driver’s license.

She had never seen the condo when the offer was made on her behalf.

Her employment letter was typed on a blank piece of paper, and her pay stubs were just PDF’s from Excel.

She had no car, but her boss said her job involved driving around.

She said she had worked at the sandwich shop for six months, but her boss said over a year.

Her boss was just as sketchy as she was.

She was apparently from Russia, but adopted by a “wealthy Canadian family.”

Her Facebook photos were all of her, very dressed up, at nightclubs.

And her name, was Ruby Starr.

It was just all way too convoluted, and there was no reason for the landlords to take the risk that this wasn’t some sort of scam.

I’m sorry, this girl could end up being the nicest human on the planet.  I could be totally wrong in all of this.  There could be logical explanations for every single red flag I’ve raised above.  But in the end, there is always another renter out there, and with vacancy rates in Toronto at less than 1%, there’s no reason to work with this prospective tenant.

Of course, it helped that later that night – after the meeting between Ruby Starr and my clients, we received another offer on the condo.

This offer was from a 27-year-old who worked for RBC, and had 400 connections on his LinkedIn profile, with a dozen recommendations.  He made $80,000 per year, had a credit score over 800, virtually no debt other than a small credit card balance, and was living in a condo on Fort York Boulevard that his landlord was selling.

He checked out, with ease.  He was the very definition of a “Triple-A” tenant.

The final decision was up to my clients, of course.  But I told them I’d advise them to reject the offer from Ruby Starr, and lease the condo to the young man who worked at RBC.

And that’s what they did.

They felt bad, as did I.

It sucks to have to “judge” somebody, but that’s what we’re doing when “evaluating candidacy.”

Real estate scams are not just something you read about in the newspaper – they’re very common, and I’ve seen agents in my own office lease to people who turned out not to be who they claimed.

I’ve seen friends and colleagues scammed as well.

So when you’re dealing with your own investment property, that you worked hard to purchase, and you’re working harder to look after, there’s nothing wrong with being diligent.

And if your “spidey-sense” is tingling with respect to a certain candidate, move on.

As I said, there’s always another prospective tenant waiting…


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  1. Rachelle says:

    I wouldn’t lease to this person, not because they are a escort, but because they are a liar. They are a liar because most people don’t want to rent to people with a sketchy employment history that is all cash, can’t be garnished etc.

    Regardless I think honesty is the best policy for this tenant.

    Also I disagree, a lot of very bad tenants look for houses on the MLS.

    True Story Time: I used to manage a townhouse complex in Oshawa, and one of the tenants was a terrible hoarder bad credit on ODSP, he was evicted because he threatened me physically during some necessary building work. But he couldn’t find another place, and then he got a realtor and he found a place… so I gave the guy the benefit of the doubt, but I was just happy that they were going to move out. Then I found out that the realtor had signed the lease at their house. That blew my mind because the place was a level 4 hoard, there was no where to sit, and you had to climb over the washing machine to get into the basement. There were two sets of couches with about 10 area rugs piled up on them. To this day I have no idea how anyone seeing that house could ever rent to them. But there you have it.

  2. Tommy says:

    Sounds hot. Give me her phone number.

  3. Condodweller says:

    Given other options and the risks involved there is no way I would rent to her. It of course becomes more interesting if there are no other candidates at the moment or if there are, what do you do if she offers $200 more. What do you if your model banker offers $2000/month vs her $2,200? The irony is that if she is in fact an escort and if she is very attractive, her income is probably more secure than the baker who might get laid off at the next round of job cuts at the banks. Food for thought.

    1. Condodweller says:

      baker=banker sometime I type faster than my keyboard can handle… The “do” didn’t even register.

    2. David(Not the David who runs this website) says:

      Condodweller – I wouldn’t rent to her even if I had no other offers, she’s just not worth the risk and trouble she’d cause. If she’s an escort and has a high income, there’s no guarantee that she’s not going to spend all her income on drugs, booze and god knows what else. Not to mention that she may end up using the condo for her “business”. Would you want your condo used for that? I think not!

      I lived in a condo many years ago where one or more units were being used for prostitution and drug trafficking. Contrary to what most guys think, those women were not attractive and were rather gross in person. I was very glad one day when the cops raided the place and put an end to that crap.

      If I had to choose between her and the model banker, I’d pick the model banker. Sure that guy could be laid off but then so could any working person. He’s got a reasonable income and no debts. I’d check to see if he had savings and investments to fall back on if he got laid off. Even if he got laid off, I’m sure he could find other employment. I’d also check with his former landlord. If the guy lived there for a while, paid the rent on time and didn’t make a mess of the place, he may end up being a good tenant.

  4. Kris says:

    Job well done

  5. Rear-view Mirror says:

    As a small-scale landlord, report typical difficulties far more banal than fraudulent tenants, usually relating to poor care of routine household matters and ensuing mysterious ‘failures’ of this or that. Issues too small – but still costly – to be the basis of formal damage claims. Good income, professional status and agreeable social charm are not reliable predictors of tenant competence.

    If I rent a car for the weekend, the fine print has me liable for it’s loss or damage, including lost income from it. If I lease a million dollars of space to a residential tenant, I have – in hand – a deposit equal to the last months rent. To recover more is a legal adventure.

    The deep thinkers at Queen’s Park know, for it is a very old issue, that housing access in Ontario / Toronto could be improved overnight if potential small landlords did not confront the well-known risks and liabilities supported by current law and administration. Property owners are rightly fearful of all the black holes, which have been publicized and are now routine street smarts.

    Though I’m still doing it, know full well the enterprise could sink tomorrow by irresponsible actions of others, from which law and administrative custom prevent effective agreements, or damage deposits or whatever.

    Ontario governments long ago chose sides in this issue. Well, that is understandable – there are more tenants than landlords. Some may even vote. An ethical politician might admit complicity in the zoo whe have now, where to rent part of your house is properly understood by owners to be a risky endeavour. My Toronto neighbourhood has 12 room houses occupied by one or two people. During the post-war era, the inherent flexibility of large old houses were adapted to the very real housing ‘crisis’ of its time. Not today.

    Not complaining, just reporting.

  6. Libertarian says:

    “Real estate scams are not just something you read about in the newspaper – they’re very common, and I’ve seen agents in my own office lease to people who turned out not to be who they claimed.

    I’ve seen friends and colleagues scammed as well.

    So when you’re dealing with your own investment property, that you worked hard to purchase, and you’re working harder to look after, there’s nothing wrong with being diligent.”

    This is why I don’t understand the obsession with real estate investing. If people want to go through this all the time and spend all that money, time, and energy to do this, more power to you. Me, a couple of clicks on my keyboard to buy a stock is much easier, less stressful, and more “bang for my buck.”

    1. Condodweller says:

      To each their own. If you are better at picking stocks than you are at picking tenants then more power to you. There is no right or wrong answer here. Having said that, turning $35,000 into half a million in 10 years is pretty difficult to do in the stock market. If you can do that consistently you should definitely stick to stocks.

  7. L.H. says:

    Great article David!
    Check out this article too:
    It looks like the realtor did not do what they were hired to do nor does it look like there are ramifications for someone who fraudulently obtains (rent) property.

    1. Ralph Cramdown says:

      The landlord who rented to the “well-dressed, professional-tenant” in David’s second linked article above is a realtor at a swanky Toronto brokerage.

      But think about the big picture. If home ownership is a Canadian obsession, with many parents willing to bridge the gap for downpayments and cosigning, who’s left to rent to? Losers, scammers and fraudsters, substance abusers, people who spend or party away all their money, the poor, recent immigrants without established credit or, worst of all… housing bears. That’s the cohort being combed through by large, professional rental companies and REITs, AND by all the amateur landlords who’ve watched a bit too much HGTV and want to start “taking cheques to the bank.”

      Look at David’s idea of a AAA tenant: Spends 40% of his take home pay on rent. Maybe he’s just starting out and will have a DP saved in his RRSP in a couple of years. But with such a great Linkedin profile, it doesn’t sound like it. Life of the party? Or housing bear?

      1. David(Not the David who runs this website) says:

        Ralf Cramdown, I couldn’t help laugh when I read your comments. So you think that anyone who rents is a no good, low-life, loser? Believe it or not, there are some of us out there who rent who are not scum. In the many years that I’ve rented, I’ve never missed my rent or bounced a cheque, ever!. There were times when I was out of work and it was a long time until I found work but I still never missed my rent. I’ve also taken very good care of the apartments I’ve lived in. Also most of my neighbors are reliable and seem to pay their rent on time too.

        You mentioned that David’s AAA tenant spends 40% is his income on rent, well I’m not surprised given how expensive housing in Toronto is. That doesn’t make him a loser, it’s just the way it is. Oh and having lots of Linked In contacts is a bad thing? How can you make that sort of judgement when you don’t know that guy? I have 100+ Linked In contacts. Most of them are people that I’ve made friends with from work that have come and gone over the years and I just wanted to stay in touch with them.

        Contrary to what you think, I’m not partying every night. It’s more like I come home from a long hard day and then get to sleep at a reasonable time, so that I can keep my job. And not everyone who rents is a real estate bear. I prefer investing in stocks and REITS, so that I’ve got my investments to live off of in lean times. I don’t like the idea of having all my funds tied up in a house, not to mention having to spend money fixing up a house and all of the other related expenses. I’m not anti-real estate, it’s just not for me.

        1. Ralph Cramdown says:

          Dear fellow bear:
          I rent, too. It’s OK, really.
          My point, which I may have exaggerated for effect, is that in an environment of easy credit and real estate bullishness, it is MOSTLY only scum who rent. And (this was somewhat implied but not explicitly spelled out) of those renters who aren’t scum, many of them are saving feverishly for a downpayment, meaning more vacancy and another acquisition cost for the landlord soon.

          1. David(Not the David who runs this website) says:

            Ralph, I’m not a bear. I’m not one of those people waiting for real estate to crash so that they can finally afford to buy. I’m also not saving up for a down payment either, I just have no desire to become deeply in debt. I don’t want that kind of stress.

            I’ve been to many open houses and I’ve seen so many old houses that are in bad shape, that are listed for insane prices. I just don’t see the value in them but to each their own. I’m very grateful that I don’t own a condo unit in a nearby condo building which has seems to have power outages that last for days, and this has been an on going problem in that building for years. No doubt that problem has affected the resale values in the building. Good luck trying to sell.

            So I’m not a bear, I just see what’s going on out there and I chose not to play that game but I don’t judge those that do. They must see value where I don’t.

  8. Marina says:

    I would guess not an escort, but just fronting for someone who does not want to be identified. Likely her current boyfriend. But what the heck do I know.
    I actually think the Ontario gov’t is shooting themselves in the foot with all the tenant-friendly legislation. I actually know someone who sold a condo to get rid of a bad tenant. It’s what’s holding me back from buying a rental property. Although we likely will take the plunge.
    And for the record, I wouldn’t rent to her either.

  9. Andrew says:

    100% escort. Maybe web-cammer too.

  10. Appraiser says:

    Bravo! David. As a landlord, I can concur that the use of a reputable and diligent realtor when leasing your property is solid advice. One month’s rent isn’t cheap, but neither am I.

    1. Ralph Cramdown says:

      I find using realtors as rental agents to be an odd compromise between the full service of a property manager at 1 month/year and the DIY ethos of hands-on landlording. Sure you’re paying your agent 1 month, but he splits it on MLS, and who isn’t going to prioritize any whiff of a 2% sales commission versus 2/5 of a month’s rent — your business, sadly, isn’t top priority. Plus the property manager knows she’s going to have to deal with it if she finds you a bad or demanding tenant. The realtors (both landlord’s and tenant’s), not so much.

      I’m not saying realtors can’t diligently handle this business, just that the incentives are poorly skewed. Nobody gets into the residential business (at least in Toronto) hoping to be the king of leases — if they did, they’d be working commercial properties.

      1. Professional Shanker says:

        What baffles me is the compensation involved to an agent to lease vs. sell a place. Speaking from a Toronto condo perspective I don’t believe the work involved in each instance is correlated to the compensation paid. Under a leasing scenario an agent would get roughly 10 times less compensation but certainty would not do 10 times less work. Begs the question are agents under paid for their services when leasing or are they overpaid when assisting with a sale?

        1. Not Harold says:

          As a buyer’s agent you tend to do far less work on a rental than sale.

          Just the hours involved – see a few places, then make an offer over email for rental. Can be done very, very quickly and all over your iphone.

          A successful sale has far more effort and so much has to be done in person. Presenting the offer then waiting around for a few hours to see if accepted or not. Not to mention that you can fail over and over again.

          But you also tend to see junior agents doing rentals – it’s the minor leagues, accidents suck but aren’t catastrophic for the client, agent, or agent’s boss. Getting 2% off a $2MM sale is far more than the $800 you get for a rental (using that 40% of $2k figure) but you need to provide a more sophisticated service, the negotiations are harder, and you want someone who has substantial experience.

          Even when I was just out of school and getting screwed over on business trips and client meetings because I was too young to be in the room but not too young to do the work, I wanted experience in people I was doing business with. I wouldn’t have worked with a broker who was under 35 and I wanted financial advisors, lawyers, etc who had decades more experience than I did. If I’m paying for advice, I want to get something for my money. If you are incorporating a drycleaner you can and should use the most affordable lawyer you can find, if you’re getting legal advice on an investment from a US VC firm, you need to hire a big law firm since this isn’t the first time they have gone through this process.

          So while there might not be a 50x difference in effort there’s probably a 20-30x difference and the rest is made up of experience, sophistication, and market knowledge. If you’re working with David or some of his team, you don’t even need to ask for the status cert in certain buildings because he’s already pulled it 5x this year. You can rule out certain buildings, developers, streets just based on past experience of clients from purchases and showings.

        2. Condodweller says:

          “Begs the question are agents under paid for their services when leasing or are they overpaid when assisting with a sale?”

          This is a rhetoric question correct? All I am going to say is hat home prices have doubled over the last 5-8 years or so and if anything the amount of work required to sell a property has been reduced. Does this justify a 100% commission increase? As for leases I believe most agents provide it as a service to their investor clients otherwise it wouldn’t be worth their time except for new agents. If you asked me, as an investor I think leasing out the unit should be included in the buy commission at current prices. I know an agent who also manages properties for his investor clients. But he has clients with multiple properties. If I gave four deals to an agent in one building he had better included leasing out the units.