10 Ways to Catch Fraudulent Applications

By Robert L. Cain, Copyright 2020 Cain Publications, Inc.

One in three rental applications contain some kind of fraud, reports snappt.com. in 2020, the company surveyed property managers and came up with that figure and others just as telling revealing the carefully generated fake documents landlords see on rental applications.  It’s usually income, but it can be far more devious than that. Of those who admit it, says the snappt.com report, two of every three property managers have been fooled at some time by phony documents.

It’s easy to create a phony document, one that will fool many people, including landlords anxious to get a unit rented.  Time was when tenants had to work harder to come up with doctored documents to prove their rent-worthiness.  Now all it takes is a visit to a website.

Get It Rented!: Little-known tricks and secrets of marketing rental property to attract good tenants in good times and bad by [Robert L. Cain]

I checked out a few of those websites.  Fakepaystubs.net, pay-stubs.com, and thepaystubs.com all promise quick and easy documents to prove whatever you want proved. Fakepaystubs.com, for example, provides instruction and services for

“How to edit my paycheck stub
How to get my check stub online
Create a pay stub
How to edit a scanned document
Online PDF Editor
PDF Editor Service for Paystubs
Editing Scanned Documents
The PDF Editor Service
Editing Fake Paystubs Service
Editor of Fake Paystubs Service”

In addition, beside fake paystubs, they will create bank statements, credit reports, utility bills, credit card statements, and tax returns, running the gamut of documents meant to fool the less than diligent landlord.   Of course, they insist that they are just for fun and should never be used in real life; “Services provided here are only for Novelty, Education and Entertainment purposes.”  Another site even offers two people pretending to be employers and previous landlords to answer calls from anyone checking the application.

All of this has become epidemic recently because of how easy it is to create documents online.  With due diligence, you can easily flush out fraudulent documents and applications. The most important point is: BELIEVE NOTHING ON A RENTAL APPLICATION UNTIL YOU HAVE VERIFIED IT.

Find out after they have completed their fraud and moved in, and you most certainly have the right to evict these tenants, assuming you can actually still evict where your property is.  The average eviction though, reported the Snappt.com survey, costs $7,685.  And that’s just for the cost of the actual eviction.  It doesn’t include the lost rent and property damage done by a bad tenant. Never allowing them move to in to begin with provides the best protection for your investment.

Here are 10 things to do to ferret out a fraudulent application and keep from renting to a lying tenant.

  1. Make sure the application is completely filled out, no exceptions.  If your applicant has a bad attitude about your insisting it’s completely filled out, simply reject the application.
  2. How do the documents your applicant submits look? Are the numbers, account numbers, phone numbers, income figures, everything  the same across all documents?  Look at formatting to see if it is consistent in documents from the same source.  For example, does a bank statement look like the actual bank statement from that bank? Check spelling and grammar. Spelling and grammar errors are a sure sign of fraudulent documents.
  3. Call the telephone numbers on the application and documents to make sure they are working numbers.  Then compare the phone numbers on the application with the phone number of the current and previous employers, the ones you find on the employers’ websites or in the phone book.  No website? Be extremely careful.
  4. Verify start and end dates with employers and landlords to make sure they match what’s on the application.  If they don’t, ask your applicant about missing periods of time. The answer had better be good. Check with the current and previous employers to verify income.  Don’t rely on possibly phony paystubs submitted by the applicant.
  5. Look at Facebook and LinkedIn pages and online databases such as opencorporation.com and sba.gov to make sure the applicant’s employer is real.
  6. Check the applicant’s credit report to see if the dates and addresses match up with what’s on the application.  Don’t rely on a credit report an applicant provides; pull the report yourself. 
  7. Do a Social Search to see if the Social Security information is the same as what’s on the rental application.  People using a phony Social Security Number will show up with different names, addresses and dates than those claimed on the application or not show up at all.
  8. Call previous landlords for references. Check to be sure the phone number you are calling actually belongs to the landlord or manager and not a friend posing as a property owner.  One suggestion I saw recommends calling the numbers of previous landlords and asking if they have a two-bedroom unit for rent.  If they answer that you have the wrong number, that waves a huge, spotlighted red flag. Check county tax records online to see if the name of the property owner is the same as the landlord’s listed on the rental application.
  9. If you still haven’t rejected an applicant after finding inconsistencies, ask the applicant to provide hard copies of the documents or to print out the documents in your office.
  10. Spend the time to do a proper screening job.  The Snappt.com survey reports that property managers spend between four and ten hours on each application. Whatever time spent will be worth it if you find a fraudulent application and spare yourself a bad tenant and an eviction.

You don’t have to check every application if you screen in the order the application is received.  The first acceptable one, the one that meets your strict rental standards and passes muster can be the one you accept. Just be sure to make your rental standards are so meticulous that anyone who meets them will be an acceptable tenant.

Bad tenants, tenants who have a spotty or horrible rental history, are not going to start being good little boys and girls.  They’ll keep up their tricks as long as the tricks work and will learn new ones when the old ones wear out.  They’ve worn out their welcomes everywhere they’ve lived.  Don’t let them add your property to the list.

Written for Zip Reports where they provide applicant screening services.

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The CARES Act Meets FICO Scores

By Robert L. Cain

All of a sudden some people seem to have better credit. That came about because they weren’t paying their bills and so may not really have earned it.  A Market Watch report from February 17, 2021, said that “While millions of Americans were laid off or furloughed from their jobs, lost their employer-based health insurance and skipped debt payments, their credit scores rose to record levels.”  They got “accommodation” from creditors.

According to Experian, the average FICO score was 703 in January of 2020, but by October, it had gone up to 711. That’s all the result of a provision in the CARES Act that games the credit reporting system. You remember the CARES Act with the $1200 per person stimulus money and other provisions that, it turns out, resulted in credit scores rising. What happens is that when laid off people can’t pay their car loans, utility bills, credit cards, or whatever, they can ask the lender for forbearance.  

Because of the forbearance (also called accommodation), lenders must report the debtors as current or “paid as agreed,” even though they may not pay a dime for six months or a year. How does that work?

It has to do with the way FICO and Vantage scores are calculated. Payment history accounts for  35 percent of a FICO score.

Thus if payment history shows all debts current or paid as agreed for several months, up goes the FICO score. MyFICO.com lists the criteria they use to calculate payment history. 

  • Payment information on credit cards, retail accounts, installment loans, mortgages and other types of accounts
  • How overdue delinquent payments are today or may have become in the past
  • The amount of money still owed on delinquent accounts or collection items
  • The number of past due items on a credit report
  • Adverse public records (e.g., bankruptcies)
  • The amount of time that’s passed since delinquencies, adverse public records or collection items were introduced
  • The number of accounts that are being paid as agreed

The Consumer Finance Protection Board (CFPB) explains the three possible results when a borrower receives accommodation from lenders.  One, if the account is current and the borrower makes the agreed upon partial payments, skips a payment or whatever else is agreed, the lender reports the borrower as current.

Two, if the account is already delinquent when the borrower makes the agreement, then the creditor cannot report the borrower as more delinquent. So, for example, if the borrower is 60 days late at the time of forbearance, that’s what the lender must report as long as the forbearance lasts.

Three, if the account is already delinquent and the borrower brings the account current, the lender must report the debt as current. That seems to fly in the face of the second point of the FICO score calculation, “How overdue delinquent payments are today or may have become in the past.” Will the past due record not show or does the payment history reflect a paid-up delinquent debt?

How does that help or hinder landlords and business owners looking to rent or hire?  Pay no attention to the FICO or Vantage score and instead look at individual debts and “special comments” by the lender and “permanent comments” by the debtor. That gives an idea of what to expect after the pandemic is over.  The CFPB says that the special comments will say that “the account was affected by a national emergency as a result of the pandemic.”  That note is temporary and stays on the credit report only until 120 days after the national emergency is over and then disappears entirely, never to be seen again. A borrower, absent a comment by the lender, may make a “permanent comment” stating that he or she has “been negatively affected by the pandemic.” That remains on the credit report forever.  The CFPB points out that “a prospective landlord, employer, or lender may take [that] into account.” Ya think?

Forbearance may seem like a good deal for borrowers, but not when we look at the ultimate result once the “national emergency” is over.  It lasts only 120 days after the national emergency ends.  The terms the creditor and debtor agreed to in the forbearance determines how the parties set up accommodation.  If the borrower made the deal that the forborn balance is added to the end of the loan, it extends the original payoff date. So, if a borrower had a car loan of $600 a month and the lender added the missed payments onto the end of the loan, it would change little as far as concerns a landlord or business owner, just giving the borrower longer to pay it off.

On the other hand, if the agreement says the forborn payments total is due and payable 120 days after the pandemic is officially over, that is a concern.  Depending on how many accounts were “accommodated,” that could amount to thousands of dollars  So that $600 a month car payment, if the forbearance ended after six months would be a $3600 debt due and payable immediately, which could result in no rent paid or the vehicle being repossessed, the borrower unable to get to work, and a wage garnishment.

Why would someone agree to a forbearance on those terms?  It could be they don’t understand what will happen, they know what will happen but never do the math, or they are so relieved to get the debt “accommodated” that they will agree to something that onerous and worry about the consequences later.

Thus, when a landlord or business owner looks at a credit report, the telling information will be in the body of the report not the FICO or Vantage score.  Look for a “special comment” by the lender or a “permanent comment” by the applicant.  Then ask what the terms are.  Is the past due balance due and payable in full 120 days after the pandemic is declared over or is it added to the end of the loan?  It’s possible that your applicant may not even know.  If that’s the case, it may make a landlord or business owner think twice about renting to or hiring the applicant.

Eventually, the pandemic will go away and those people with mysteriously risen FICO scores will see their scores fall rapidly, possibly even below where they were in January 2020, and their ability to pay evaporate.

Written for Zip Reports where they do employment and rental screening.
Contact Robert L. Cain at bob@cainpublications.com

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The Perfect Walk—Spoiled (or Maybe Not)

By Robert L. Cain, Copyright 2021

I wish I could plan for it, ensure it, and experience it every time—the perfect walk. But I can’t. The universe might be in the right mind for it, a day the walk gods promise a walk-memory I will treasure forever. But then, in their own treacherous way, turn the tables on me.  I have checked off all the boxes of perfect-walk criteria, weather, feeling great, mind clear and even clearer after the walk, excitement—met all the requirements as a candidate for perfection.  But I can’t fool serendipity and the walk gods. Both have been lying in wait, ready to bushwhack me, testing my walk resolve. All that said, I’ve come to a conclusion about the perfect walk. I’ll tell you about that later.

The perfect walk, of course, is unique for each person.  Moreover, because of their malleability, the criteria can change day to day or even minute to minute. The fact is, one person’s perfect walk might well be another person’s perfect meh.  I can only speak for myself, but that doesn’t mean I’m going to give up on ever walking the perfect walk. Since I love walking so much, I anticipate that every walk will end up good, even if not perfect. Because planning for it is subject to the vagaries of serendipity and the walk gods, you can’t know if a walk is anything approaching perfection until after it’s over.

It may start out with a “yes!!! this will be great.” And all checked boxes hold up for several hundred steps, or a few blocks, or even a mile or so. It started with perfect weather—75 degrees or so—with some shade to walk in, a forest path well laid out and smooth, many beautiful sights to see and the mood to enjoy them, a place to sit and soak in the glorious day, a route with just enough effort to get my heart rate up but no so much to wear me out for the rest of the day, and peace and quiet.  Is that enough?  Well, you’d think that if a walk met all those requirements, it would be nigh on to perfect. But you can count on the unexpected and the angry walk gods. I always wonder what I did to incur their wrath this time  There’s always something, isn’t there?

The walk crumbles like loose dirt on a precipitous hillside when that unexpected, unplanned for, undesired entity jumps out and bites it.  It could be anything, but whatever it is affects the glorious glow of a promising walk. (Of course, the unexpected might mean a better walk.) Did I have all the boxes checked and did I anticipate an exceptionally good experience that day only to have it crumble because of the unexpected?  One day’s interesting and memorable is another day’s irritating and memorable. 

But is it as bad as I am making it?

At the risk of sounding Pollyannaish, my mindset at the moment determines how I get the best out of a walk.  For example, today’s walk was good maybe because I expected nothing of it.  I just felt the obligation to set foot out the door and go for a “short” walk. My walk a couple of days ago ended up more strenuous than I would prefer, so my keenness for another involved not exerting myself too much. Today’s walk more than met my expectations because I had none.  And mentally checking off the boxes when I got home, the walk turned out rewarding.  I thought about this column and the ideas gushed like a fire hose.  The short walk rewarded me with four pages of notes, almost all on point.

One of the last things I wrote down is that the event itself is neither good nor bad but what you make of it. That’s one thing every motivational speaker repeats almost ad nauseum, so often you can anticipate when he or she will say it. It’s true, of course, but they don’t need to tell me over and over. Just as most events in our lives can be considered neither good nor bad, they depend on how we approach them. It leaves each event with the opportunity to be turned to either good or bad in our minds. 

That’s the hard part for me when it flies in the face of an expectation I had for the walk, I let it dump cold water on my mood, make me growl with displeasure, suffer disappointment.  The cold water could be I got over-tired, had to deal with people’s damn dogs, endured too much traffic, or even saw too many people, or even more walk-unsettling such as the day I slipped and sprained my knee.  Some days I don’t want to see any people even to say hello, and every day don’t want to have to deal with anybody’s damn dog, or have to wait for traffic before I can get to nature. After checking off the boxes for the near ideal walk, I have my plans for the walk ravaged.  The perfect walk spoiled.

Other days, though, it’s a good walk made even better. It all depends on where my head is.  Even when the walk gods turn on me, often I turn the table on them, and my walks are worthwhile. I get new ideas, refresh my brain, get my blood moving, enjoy the day (well, mostly unless it rains on me—a rarity here). 

Here’s the conclusion I came to: Maybe there’s no such thing as a perfect walk. There may be a walk you remember fondly, think couldn’t be better, that gets put on your 100-year list. A walk is as good as I make it. Every walk has its benefits and in its own way might deserve to be adjudged perfect.  After all, since adjectives have no objective meaning, if someone wants to call a walk perfect, that’s his or her choice and definition and it’s right for him or her. No matter how I remember a walk, I can be grateful for the opportunity for the walk itself. The real question is, do I have to judge every walk? A walk is a wonderful thing, even if all the boxes aren’t checked, or some get unchecked.

#naturewalks #walkers #takeawalk #onfoot #walkingforhealth #naturewalking #walkingbook #bookofwalking https://www.amazon.com/dp/B08BDDP3KC

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Unpaid Rent Threatens Rental Properties

By Robert L. Cain

Today, renters owe $70 billion in unpaid rent reports Moody’s Analytics. We have to assume that landlords will never see any of that unpaid rent. The real story is who owes the money. The vast majority of the $70 billion owed comes from Class B and C properties, while the Class A properties do just fine.

Class A properties, make up the highest quality buildings in any market. Built within the last 10 years or so, they are well-marketed, and built with high-quality construction. They command the highest rents and are rented to top tenants who earn the highest income.  Of those tenants who earn $100,000-plus, only 5 percent are behind in their rent.  That makes sense. What’s more, 93.8 percent of all tenants in Class A apartments had paid their rent in December.

Who is left? Most other rental properties, and they are in trouble along with many of the renters who occupy the Class B and C properties. The overwhelming majority of the unpaid rent is owed for these properties, by these tenants, and to these landlords.  In September 2020, more than one-third, 35.2 percent, of landlords who own class B and C properties didn’t receive all the rent owed them. In October, that number grew to 38.1 percent reported the National Multi Housing Council in its Rent Payment Tracker Survey. That means only 61.9 percent of landlords were likely to receive all the rent in October, a far cry from the 93.8 percent of Class A properties.

The average renter who hasn’t paid rent owes about four months’ worth, or $4625, reports the National Apartment Association. And, of course, with the eviction moratorium, their landlords can’t kick them out, for that anyway.

Class C properties are buildings that are looking at least a little shabby, have a dated exterior and interiors with limited amenities, and may be at least 30 years old.  These are the properties often rented by people who may have less than a high school education and work in industries most affected by government shutdowns.  The Washington Post in a January 27 article reported that less than half, 48 percent, of this demographic had jobs, and continued, “In three of the biggest sectors for lower-education workers, over a million jobs are missing compared to Dec. 2019.”

One-to-four units properties make up virtually all rental properties, some 97 percent, regardless of class, reports the Census Bureau. About three-quarters, 73 percent, are owned by individual investors.  Add those owned by LPs, LLPs, or LLCs and almost nine of 10, 88 percent are accounted for.  And those owners manage them themselves in about the same  percentage as are owned by individual investors, 73 percent.  Agents or management companies manage another 22 percent, to total 95 percent of all one-to-four unit properties.

Bob Pinnegar, CEO of the National Apartment Association reporting on a survey the NAA did said, “nearly one-in-five of two-to-four unit properties said they could not sustain operations for more than a year at current delinquency rates.”

Just as in all multifamily properties, rents pay for the mortgage, taxes, and insurance to keep the properties operating.  When half a duplex isn’t paying rent, that hurts a lot more than if one unit in a 20-unit property isn’t paying rent, and even less in a 100-unit property.  These owners are living on a prayer with their reserves exhausting rapidly while they try to keep their properties functioning.  Add to that the fact that about one-third of smaller landlords are 65 and older, mostly retired, and may not have another source of income besides the rent. Pinnegar of the NAA worries that “There is a risk of losing these units from the rental housing stock entirely.”  Rental owners will let leases expire, evict for reasons that have nothing to do with unpaid rent such as lying on a rental application and violating the terms of the rental agreement, and remove their rental from the market in utter hopelessness and/or sell to owner-occupants.

Efforts at correcting this problem may be coming too little, too late. Urban.org reports that landlords have become more cautious with their screening with 35.6 percent having tightened their rental criteria.  A lot of good that does with so many units occupied by tenants who can’t pay rent and can’t be evicted.  The “new and improved” criteria include a higher credit score and higher income.  But the horse has escaped the barn and just now they are closing the door.

One solution, which is easy for individual landlords, costs little or nothing, and sends unqualified applicants away, is a professional image.  That’s one reason Class A properties attract top tenants. It starts with retrofitting a Class C property to look as much like a Class A as possible. Look at what Class A properties do to keep them in tip-top shape.  It’s property packaging: curb appeal; professional-looking For Rent signs rather than a hand-scrawled piece of cardboard or sign bought from Office Depot with the phone number messily written with a felt-tipped pen; a professional-looking website and/or Facebook page with photos; appealing-looking marketing materials such as property flyers; and carefully crafted and written rental policies and standards.  Those tell less-than-qualified applicants that they would be dealing with a businesslike landlord, and says “run to the next one who may not be as careful.”

There’s not much we can do about the $70 billion in unpaid rent that’s growing every month and most likely will never be paid. But we can discourage unqualified applicants with a professional image and careful screening.

For complete information on how to market a rental property inexpensively but effectively, read the book Get It Rented by Robert L Cain. Available on Amazon

Written for Zip Reports where they do employment and rental screening.
Contact Robert L. Cain at bob@cainpublications.com

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Kool-Aid and the Examined Walk

By Robert L. Cain, Copyright 2021

He meant well but had drunk the Kool-Aid. The doctor told me that I should get at least 30  minutes of exercise a day to ensure I would keep a relatively strong core.  My response was that if that was all I got, I could well go backwards because I got more than that already.  I didn’t find out about his Kool-Aid sipping until after I started writing the Book of Walking.

I discovered more Kool-Aid as I researched the various chapters for the book.  I learned that most of the advice we get about exercise, walking in particular, are just made up numbers.  I could find no scientific basis for any of it. Even so, it all has become mantra, the big lie. Those who advise about exercise repeat so often that these numbers, all this advice, all these recommendations, have become “fact.”

The advice always implies that we should go big or stay home when nothing could be further from the truth.  Keep track of all our walks they say, steps, distance, heart rate, weight loss or gain, and anything else that allows us to examine how well we are doing with our exercise. Most important, pay attention to their dicta. Socrates is credited with saying right before his execution for corrupting the youth of Athens that “the unexamined life is not worth living.” I would reverse that about walking: the unexamined walk is well worth taking. But unexamined data are not worth believing.

Let’s look at a couple of these recommendations that dictate examining every walk.  First, the 30 minutes a day, five days a week mantra.  As I was writing The Book of Walking, I went looking for the study that showed that was the magic number.  I literally spent months trying to track down the proof.  I never did find the study, but I eventually did find its first mention.  It’s in the 1991 report by the Centers for Disease Control, Healthy People 2000 on page 73 (look it up if you don’t believe me). It states without citing any evidence that 30 minutes a day, five days a week is the magic amount of exercise.

No evidence, no studies, just unproven recommendation.  Yet we see that “magic” number repeated over and over again.  We start to believe it.  We also believe that if we don’t get those 30 minutes a day in, we are doomed to slugdom, should feel guilty about our slugdom, and so we should maybe just give up going for walks lest we are overcome with guilt.

Then there’s the 10,000 steps mantra.   That was made up out of whole cloth by a Japanese company before the 1964 Tokyo Olympics.  One Dr. Yoshiro Hatano began selling a 10,000 step pedometer known as “manpo-kei” (translation: 10,000 steps meter).  He had found that the average Japanese walked 3,500 to 5,000 steps a day. He calculated that if someone walked 10,000 steps a day, it could burn up 20 percent of a person’s daily calories. Well maybe, but that reasoning is circular because the evidence is “proved” by the conclusion. The magic number was to sell pedometers.  But so what? If the goal is just better health, that’s one thing. If it’s to lose weight, it doesn’t come close to losing a pound.

Later he admitted the entire notion was just a marketing ploy.  Ten thousand steps is a nice round number and easy to remember. Now it has become gospel. 

The facts arising from actual research are different. One study conducted by the UCLA Semel Institute for Neuroscience and Human Behavior found that 4,000 steps is enough to help brain health, for example.  Those findings were published in the Journal of Alzheimer’s Disease.  Each member of the study group had complained of memory problems at the beginning of the study. 

The researchers did an MRI to determine the thickness of the hippocampus, the room in the brain where memory is stored.   Hippocampus thickness is a predictor of how effective memory will be. The study found that people who walked 4,000 steps a day had thicker hippocampi and related brain regions than did those who walked fewer steps.  I don’t know why the study used the cutoff of 4,000 steps.  Would 3,500 have been just about as effective? Maybe 5,000 would have done an even better job.  The researchers have yet to do a longitudinal study to find out if walking 4,000-plus steps a day continues to keep memory intact. And 10,000 steps is an admitted complete fabrication.

Blood flow to the brain is the determining factor.  A study conducted by New Mexico Highlands University mostly “concentrated on running’s effects on carotid artery blood flow as a result of heel impact.”  They found that foot strike exercise—both walking and running—pushes more blood to the brain and that helps our brains work better.  Dr. Ernest Greene, first author of the study, said, “What is surprising is that it took so long for us to finally measure these obvious hydraulic effects on cerebral blood flow. There is an optimizing rhythm between brain blood flow and ambulating.”  All that was needed was blood getting to the brain better.  It doesn’t take 10,000 steps to do that.

What’s wrong with just going for a walk and taking pleasure in it?  Even if it’s just 15 minutes or only 2,000 steps?  We can miss the pleasures of a walk if exercise goals overshadow the enjoyment of the walk itself.  If you let Fitbit rule your walks, if you obsess about getting those 30 minutes in or those 10,000 steps, it blows away the pleasures of walking, seeing the sights, breathing the fresh air, stopping to look at a beautiful sunrise or sunset, enjoying the company of a good friend. 

There are no magic numbers for walking or exercise. it depends on the individual’s condition and motivation. Walk as much or little as is comfortable, no Kool-Aid drinking, and enjoy the walk.

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Thinking Critically While Screening Applicants

by Robert L. Cain

As far as New Year’s resolutions go, this one is easy.  It’s one that we need no reminders or extra incentives to keep. Even if we do nothing,we enjoy at least a 90 percent chance of success. The resolution: No bad tenants.

That’s one resolution every rental owner and manager wants to keep every year. Renting only to good tenants goes a long way toward ensuring a profit in the rental business.  Because 90 to 95 percent of tenants can be considered “good,” depending on your own definition of “good,” we need only worry about weeding out a small minority of applicants.  But they can be “good” at worming their ways into rentals. Critical thinking can ferret out the most ingeniously designed plans to fool landlords.

How do bad tenants get to rent from us?
There are only two times a landlord gets into trouble, when he’s in a hurry and when he feels sorry for someone. The less ingenious applicants rely on landlords’ good natures and for their wanting to get the place rented. Thus, these less-than-honorable people concoct stories that melt the hearts of even the most stony-hearted landlord.

After all, a black cloud follows them around everywhere they go.  They have a knack for going to work for companies that are about to lay people off. Their children often need to be rushed to the emergency room, costing these people hundreds of dollars that otherwise would go toward paying the rent. And their landlords? Oh, these are people who just aren’t “understanding” and demand the rent be paid on time every month and that their tenants keep their homes clean and tidy.

The result is a melting heart. The landlord thinks about the mortgage payment that’s due and no tenant to provide the payment for it, and wants to “give them a chance.”  The rental owner neglects to use the three-step process for applicant screening.  More about that shortly.

Well-crafted stories are just one tool unqualified applicants use to slither into rentals.  The more ingenious bad tenants use. And they all depend on rental owners and managers being less than diligent in their screening.

Often a rental manager gets an application, glances at it briefly to make sure it “looks all right,” maybe gets employment verifications and picture IDs from all applicants, sticks the application in the file, collects the first month’s rent and the security deposit, and hands the applicant the keys.  Who know what they think “looks all right” means.  Possibly it means their gut feeling, backed up by 20-years’ experience that enables them to tell a good tenant from bad by just looking. But probably it means something different than what the more diligent rental managers mean by it,

The three-stop process. BE SUSPICIOUS!
Check the application to ensure that it’s completely filled out.  That means no blank spaces where names and phone numbers of previous landlords and employers go, and all previous addresses for the last five years or so are listed.

Verify that each employer and landlord exists and that the dates match up with those on the application. You can do that with a credit report, which tells the current address and employer of the applicant, and a Social Search, which tells every place the applicant has lived from his or her Social Security Number.

Verify that each employer and landlord reference is accurate.  That means checking to see that the phone numbers and names match with those on the application.  I know this is hard to believe, but some people will have their friends pretend to be employers and previous landlords.  I know, it takes your breath away.

Even the most devious bad tenants, practiced at the art of deception, give themselves away to landlords who are critical thinkers, suspicious and verify absolutely everything.  These suspicious landlords are sometimes even more suspicious of an application that looks “too good to be true” than of one that has some dings in it such as late payments on credit cards and empty dates between jobs.

Thinking Critically
Ignoring dings may well work out favorably with an exemplary tenant, but people don’t tell the whole story. They “remember” only the less-than-bad parts.  Critical thinking is the most important skill any interviewer can have.  Along with suspicion about verification of everything comes the “yeah, but” response.  What aren’t they telling you?  How do they keep ending up in situations where they can’t pay the rent, where they lose their jobs, where they have to keep taking their kids to the emergency room, and any number of other black-cloud events.  Do they lack impulse control or the ability to imagine what causes these black-cloud events?  Can you expect that behavior to change if they rent from you?

The three-step process ensures that even the “best” applicants get checked thoroughly because the most profitable rental owners and managers have set-in-stone procedures for checking every application, procedures that take nothing for granted, and who believe nothing they see on an application until they have verified it.

Just think, no bad tenants! That’s a worthwhile and easily achievable New Year’s resolution.  All we need to do is be suspicious, verify absolutely everything, ask questions, think critically, and set up and follow procedures for the entire application process.

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How to Keep from Tripping on the Final Step

By Robert L. Cain, Copyright 2020

Just one more step.  But overlooked trip hazards endanger that step. Trip hazards are things you would avoid if you saw them, but you don’t because you aren’t paying close enough attention. Trip on one, fall on your face, and who appeared to be the “best” applicant could prove to be the worst.  Everything checks out, the applicant meets all your criteria; you pull a credit report. But when you read the credit report, what trip hazards are you missing? Sure you want to find out if he or she pays bills on time, has judgments, is in collection, and those are important and can indicate how responsible that person is.  But some items on a credit report often get overlooked. And those can tell as much as or more than the payment history and judgment history and might be oft-overlooked tip hazards.

Let’s look at them.

The top entry on a credit report is the name or names of the consumer. If you see multiple names, check carefully.  Of course, they could be a married name and a maiden name, so that’s no problem.  But what if you see completely different names?  That requires investigation.  It could mean identity theft, but whose, your applicant’s thievery or the actual person whom the credit report belongs to?

Reported addresses come second. Two things to check here. Do they match up with those on the application? Do addresses appear on the credit report that the applicant didn’t list?  Does one address overlap in time with another address?  If that’s the case, it could again be identity theft, but whose?  If there’s no issue with identity theft, did the applicant report all the addresses on his or her application or is one left out?  The one left out will be of particular interest and will require an acceptable explanation from your applicant.  Was it a simple error or was he or she trying to hide something?  Regardless, investigate further.

Carefully examine employment records.  Those consist of the names of current and previous employers and the dates of employment.  Do all of those match what’s on the application? Especially missing dates because if a time period is unaccounted for, that requires considerable explaining.  What was your applicant doing during that unaccounted for time period?  We can speculate, but only further investigation answers the question.

Public records tell a story as well.  Those include data from court records and run up red flags.  Look for bankruptcies.  They stay on a credit report from seven to 10 years from the filing date, depending on the type of bankruptcy.  A Chapter 7 bankruptcy stays for 10 years while a Chapter 13 disappears after seven years. A Chapter 13 bankruptcy is a payment plan, and a Chapter 7 wipes out all debts (except student loans, of course).  Your applicant could still be paying on a Chapter 13 bankruptcy after seven years and that could affect his or her ability to stay current with other debts.

A bankruptcy might not automatically disqualify your applicant if it was a prompted by medical bills.  One study in 2009 conducted by David Himmelstein found that 62.1 percent of bankruptcies were the result of medical bills. Having gotten out from under the medical bills, he or she can have restored credit worthiness.

We don’t see other court records on credit reports anymore since the credit reporting agencies removed them in 2017. So if you’re so inclined, you’ll have to obtain those directly from the county court records. But the rest of the information on the credit report will likely tell you enough.

You probably looked at collections first.  Those can be telling about how well a person pays his or her bills but check the dates.  If some of the collections come from medical bills, that is an important consideration just as the “medical” bankruptcy is.  Unpaid collections may just sit there waiting for the collection agency to take action.  Then all of a sudden your new tenant gets wages garnished and will be short on money for rent and car payments. Some collections will have been discharged so the person no longer owes them and they won’t affect the ability to pay other bills.

Now figure out the Credit Utilization Ratio (CUR)—reported use of revolving accounts, credit cards, usually. That tells how much of a person’s available credit is in use.  For example, suppose someone has a Visa card with a $2500 limit and currently owes $1200 on it. That’s a CUR of 48 percent.  Do that with all revolving accounts to see how much your applicant has to dish out every month for credit cards.  Now add in the installment accounts, such things as student loans and car payments, bills where they borrow a specific amount and make monthly payments.  Lenders recommend keeping CUR under 25 percent, and rental owners want there to be money left over from all debts to pay the rent.

Finally, look at credit inquiries.  There are two types, hard (regular) and soft (account review).  The “hard” inquiries are for companies the applicant wants to get credit from.  Those can turn into bills.  It’s worth asking your applicant about them. “Are you planning to buy a new car?” “Did you apply for a new credit card?” “Where else have you applied to rent? Did they turn you down? Why?”

Each of these trip hazards can negatively affect your business if you fail to pay attention to and account for them.  There may be adequate or even acceptable reasons for each of these items, but there also may not be. Just pay attention and keep from tripping.

Written for Zip Reports where they do employment and rental screening. Contact Robert L. Cain at bob@cainpublications.com

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A Joy, An Adventure, A Walk

A Joy, An Adventure, A Walk

  • Published on November 18, 2020

By Robert L. Cain, Copyright 2020

Boredom had set into my four-year-old brain. My mother, father, and I were moving into a house in Burns, Oregon. Well, my parents were, with me in the way. What with all that adult activity I got bored quickly. Across the street from the new house sat an expanse of sagebrush and high desert that went on farther than I could see and begged my insatiably curious, four-year-old brain to be explored. Of course I went to see what I could see. Then it got dark and I couldn’t see where I had come from. Maybe it was the sagebrush that was head high or just the dark. Now what to do? I spotted a house with a light on and knocked on the door. I told them I was lost and my dad worked at Penney’s. My parents came to fetch me. I don’t remember what reprimand awaited me, but mostly my parents were relieved I didn’t get bitten by a rattlesnake or eaten by a hungry coyote.

That was only my second exploration that I know about. I may have explored other times before that and have satisfied my curiosity without having to knock on a stranger’s door. Thinking back, that adventure set me off on a lifetime of adventures and explorations in walking.

 My explorations have gotten me into difficulty more than once in the decades since then, but most often they resulted in joy and inspiration. Almost all those explorations have been on foot since that is my preferred method of travel. All were treasured adventures.

“Every walk is a new adventure.”—The Book of Walking

Adventure: “A remarkable or unexpected event, or series of events, in which a person participates as a result of chance; a novel or exciting experience.” –Oxford English Dictionary

My walks provide discovery that’s more than physical. They often reward me with unexpected events such as mental or psychic discovery. I may come up with an idea, solve a problem, or think of a place I want to discover next. The inspirations of a walk have been limitless so far. Best of all, they involve far more than just discovery: they are meditative, energizing, fun, competitive (with myself), and awaited with eager anticipation.

Compare me to the “walk-ecstatic dog” of Harold Munro’s poem, “Dog.” I don’t dance around breathlessly, leash in mouth, yipping with excitement. Well, not usually. But there’s ecstasy to a walk just the same—if you let it. That’s what I look forward to with every walk, and most times it works.

Think of it as a gift I can give myself every day. Think of it as a new adventure, an anticipation of seeing new things, of having new experiences, of enjoying the sunshine, the breezes, and clouds dancing in the sky, of hearing the birds singing and warning each other of my presence. The benefits? Innumerable. Experience them for yourself, and you will appreciate the adventures, the rewards, and the joys.

  “Guilt is a falsehearted, perfidious motivator.”—The Book of Walking

I don’t walk for exercise. If I did, I would miss out on so many joys, so much pleasure, so much anticipation, myriads of new things, all those new places, and the adventures. Walking for exercise just spoils it. I wouldn’t dare stop lest it interrupt the exercise. People with exercise trackers such as Fitbit, feel guilty as the devices report that they haven’t exercised enough, burned enough calories, kept their heart rate high enough, inhaled sufficient oxygen, and walked “fast” enough. Oh, the guilt.

Think about guilt. It’s a negative, demoralizing emotion. Negative emotions keep people from achieving what they want. People beat themselves up over and over, but nothing changes. Sure, they’d like to walk but they let the step counter and Fitbit rule their lives and tell them they aren’t “good enough,” when in fact they’re plenty good. They’re just focusing in the wrong direction, a self-defeating direction. Take the exercise piece out of walking and replace it with the many ways to simply enjoy a walk, and walking takes on an entirely different appeal, one that can make every walk a joy, rewarding, something to look forward to. 

It’s not their fault that they feel guilty because just about everything we see in articles, TV shows, books, and videos pushes exercise as the only reason for walking. They think, “Go big or stay home.” No reason for that. A walk around the block can be every bit as rewarding as a five-mile hike if you let it. You forget about any guilt for not having done “enough,” whatever “enough” is.

Stop thinking of a walk as exercise and start thinking of it as enjoyment. Forget all those articles, videos, books, and presentations that tout exercise. The exercise will take care of itself if you just lace up your walking shoes, set foot out the door, and relish the walk itself.

  “Curiosity could conceivably get you in trouble, but the satisfaction of what you discover makes it memorable.”—The Book of Walking

I created a 30-day walking plan that provides a reason to go for a walk every day, but which has nothing to do with exercise. Instead, each day describes one of the many different things we can do on a walk that make it memorable and remarkable. I conceived that walking plan on a walk, by the way.

I will never give up the uncountable sights and adventures that await me on my walks no matter if walking in nature (which has its own additional advantages), on city streets with numerous urban sights, or even in a mall. And I will never feel guilty about not walking enough or without exercise intention. A walk is what you decide it’s to be.

The Book of Walking: An exploration of the many adventures of a walk explains what I have learned about the joys and adventures of a walk and offers descriptions of and ideas for walks that make setting foot out the door a joy, an adventure, a walk. Available on Amazon at https://www.amazon.com/dp/B08BDDP3KC.

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How Careful Screening Makes a Difference

By Robert L. Cain

CNBC reported on October 2 that 34 million people may be at risk of eviction in October.  That’s 33 percent of the 103 million-plus renters in the US. But here’s a figure that is more telling.  The National Multi Housing Council (NMHC) reports that 86.8 percent of renters who live in properties managed by professional managers had paid their rent by October 13.  Professionally managed properties account for only about 22.9 percent of rental properties. But the vast majority of their tenants have paid their rent. Most renters, 77.1 percent, live in properties managed by the rental owners of the properties, landlords reports the Census Bureau. A far greater percentage of them are in danger of eviction.

Why the disparity in people behind in rent between the two types of managed housing?  Without question, both kinds of properties have suffered from their tenants losing their jobs because of the pandemic. The difference is that professionally managed properties are sticklers for screening,  They rent to people who believe that paying rent comes first no matter what. Before professional managers even think of renting to an applicant, they check credit, rental history, references, and verify income.  That eliminates marginal applicants instantly and sends them to private landlords.

Private landlords may not be so diligent about applicant screening or might even believe there’s no point in screening since the “applicants just lie on their rental applications, anyway.”  It makes you shake your head in disbelief.  Yes, they do lie on their rental applications, but they are easy to catch in their lies.  It’s just that many small landlords may not know how to go about screening and catching applicants. 

At least one website even suggests that applicants with spotty rental history don’t even bother with professionally managed properties since “large property management companies typically require a credit check on all applications. These property managers will most likely turn you down if you have bad credit,” reports thebalance.com.

“Instead,” they suggest, “aim for properties owned by individual landlords, who often don’t check credit or who may be more willing to take a risk on a tenant who doesn’t have the best credit history but has good rental history and solid income.”  Is it any wonder that the vast majority of tenants who can’t or won’t pay their rent are living in properties managed by landlords?

The only two times a landlord gets into trouble are when he feels sorry for someone or is in a hurry.  Marginal tenants move a lot and so are practiced at the art of deception. The vast majority of landlords are nice people and want to give people the benefit of the doubt, so they may believe the stories applicants tell them.

Oh, they’re good.  Professional bad tenants, you know, the ones who only pay rent when they are facing eviction (and maybe not even then but sneak out in the middle of the night), and who are bad neighbors, count on landlords not being as diligent as a professional property managers and have an entire bag of tricks to get the keys to a rental property.  You think they must hold nightly training sessions on Zoom to learn all the latest shady tricks and techniques for fooling landlords.

They describe in detail the black cloud that follows them around everywhere they go, dooming them to bad luck.  They have a knack for going to work for companies that are about to lay people off and renting from landlords who insist on prompt rent payments and taking good care of their homes and then evict if they don’t pay the rent or trash the place. “We said we’d fix all that stuff we broke!” they cry in anguish.

And their story is creative.  They may use the same one on every landlord they rent from or tweak it a little for different people.  But it’s always a “poor me” story. And the landlord feels sorry for them and actually lets them move into his or her rental that day!!

Another trick takes advantage of a landlord whose mortgage payment is due and doesn’t have a rent-paying tenant.  He’s is in a hurry. These folks have a wad of cash and will pay the landlord three months’ rent right then. 

Here is the difference in response between a professional manager and a private landlord who wants to give “people a chance” or is in a hurry.  The professional manager will say, “that’s nice, but we need to check everything on your rental application to see if you meet our rental standards.”  That’s what marginal or actual bad tenants don’t want to hear.  They head for the nearest private landlord to try their story on a more sympathetic ear.

Rental standards provide one of the keys to successful landlording.  Too many landlords rent on “gut feeling.” Their magical power, they believe, allows them to decide who will be a good tenant and who will not.  Written out rental  standards eliminate gut feeling and put managing rental property on the business basis it needs to be.

Rental standards show professionalism. Even seeing rental standards can send a marginal tenant to another property and landlord. And screening properly eliminates the ones who will try to slither through.  Careful screening, what all the rental management companies do, eliminates the unworthy renters.

That means doubt everything until you have proof.  Check credit, call references and previous landlords (and verify they are real and not just friends masquerading as references), and verify employment or source of income.  You decide what’s acceptable, not the applicant.  You must take charge of your rental properties if you are to make a decent profit and pay the bills.

With careful and diligent applicant screening, you can have the same results as the professionally managed rental properties and get the rent on time.

Written for Zip Reports where they do employment and rental screening.
Contact Robert L. Cain at bob@cainpublications.com

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USPS Woes–What’s the solution?

Mr friend, Dean Shyshlak, who lives in Portland, posted this yesterday, and he told me I could share it with my readers. I believe most of this problem has to do with an individual letter carrier and not the USPS as a whole. In fact, the attitude of the letter carrier to whom Dean complained is typical of people in the Northwest with the chips on their shoulders. Even so, I believe this story is worth passing along and our being prepared to complain to the appropriate people..


Dean Shyshlak

My issues with the USPS are legendary and have gone on for decades. Until today, my most recent problem has been missing mail, in particular, an original document being sent to me by the Columbia County Recording Office. I had been expecting this document for weeks and each time I have confronted my normal mail carrier she simply says she is tired of me always complaining about my mail. Well on October 9th I contacted the Columbia County Recording Office who informed me that they mailed the document to me on September 15th and that the document had not been returned to them. This past Sunday I saw my old mail carrier doing special deliveries in the neighborhood and after hearing about my problems and the fact that due to Covid-19 my office building currently has vacancies for the first time in decades and that many tenants were working from home and infrequently checking their mail he agreed to open the mailbox which is shared by all tenants in my office building. Well, after opening the shared mailbox we discovered my mail in 3 different vacant mailboxes not to mention that the mail of another tenant was also in 3 different mailboxes. So, last Tuesday I filed a complaint with my local Postmaster who took my complaint very seriously. Well, on October 15th I received my election ballot, completed it and placed it in the mail that same day, but not at the outgoing mailbox at my office building but at a local mailbox which I place all my outgoing mail in. When I checked my office mailbox today, to my shock and disbelief the USPS had mailed my completed election ballot back to me. As you will note from the pictures I have posted, everything was properly completed on my election ballot return envelope. It also appeared that someone had attempted to open my ballot envelope. Needless to say, I will be contacting the media, my local Postmaster and the Washington County Election Division.

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How You Gonna Pay?

By Robert L. Cain

Since the beginning of the pandemic, 76 percent of businesses have done it and 82 percent are changing a process, while 51 percent are transitioning clients to it.  Some 70 percent, say they’re “willing to invest in the technology required to advance their payment system,” reports mastercard.com. It is something that both businesses and consumers will have to deal with.

That, of course is digital payment: its growth unstoppable. “It’s been clear for some time now that the cashless society would eventually become reality, with new technologies and adoption trends accelerating at a steady pace,” opined a July 28,2020 blog by mobilepaymentstoday.com. They further claim that “cash is no longer king” and cite the example of Sweden, which has announced its goal of attaining a cashless society by 2023 with countries such as Argentina, and The Philippines not far behind.

“Consumers,” reports TDC Research, “have reduced their physical currency to half of what it was before the pandemic” turning to cashless transactions.  Worldpay reports the 30 percent of in-store cash purchases today are expected to drop to 19 percent by 2023.  And today, 48 percent of in-store purchases are by card and expected to increase to 52 percent by 2023.

Banks and credit card companies love it and governments salivate. Senator Tom Cotton (R-Ark.) quoted in a July 1, 2020 article in Forbes said, “The U.S. needs a digital dollar…The U.S. dollar has to keep earning that place in the global payments system.”

Every business and rental owner can look forward to dealing with this “modernization” as cash disappears.  Plans have been in place by companies such as Mastercard and Visa to completely eliminate cash for some time.  Central banks already have in place  digital payments or are testing it to discover its feasibility, reports Mastercard.  They call it “modernization” and a “level[ing] of the playing field for everyone.” Why it is either is a good question.

What is digital currency and what effects will its increasing use have on small businesses and rental owners?

Generally, digital currency is any medium of exchange that doesn’t involve the direct exchange of cash.  The Better Than Cash Alliance (Betterthancash.org) defines them generally as “an umbrella term applied to a range of different instruments. . . .”  Even checks can be considered digital since “they require the payee to have an account and are also traceable.”

All of the cashless methods require that no untraceable money, dollar bills, coins, etc. be exchanged.  The key is traceable, and we’ll get to that in a minute.

The professed advantages of digital payments are efficiency and speed, accountability and tracking, reducing corruption and theft.

How is it more efficient and faster?  First, money goes directly into the payee’s bank account, no deposit slips, no trips to the bank, no question that the money’s available.  Of course, it reduces theft in retail because there’s no cash to steal and any digital transfer is easy to track.

Eliminating cash also benefits the tax authorities because every transaction is recorded and easy to follow.  No more under-the-table payments to handymen, contractors, and illegals. 

Going cashless requires special equipment and bank accounts for the payee, but not necessarily for the payer.  We’ll get to that in a minute, too.  The particular issue involves small businesses and sole proprietors who receive cash payments.  They may not accept credit and debit cards now. That means buying special equipment so they can accept credit and debit cards. It can be as easy as an attachment to a smart phone that enables card scanning. Then, of course, they have to pay the discount on every transaction, 2.5 to 3 percent interest plus a per transaction charge.

It can present a difficult situation for handymen, and small rental owners and managers. When an applicant pays a deposit, it can be by check, but for many properties serving lower income tenants who are part of the 25 percent of people who are “unbanked” or “underbanked” that can mean they could not pay cash for their security deposits and rent.

Then there are transactions between individuals such as garage and Craigslist sales.  Most individuals don’t have a way to accept any payments except in cash (or checks).

People worry about having their every move tracked by government and businesses.  Since every purchase made with a card or contactless Apple Pay transaction is tracked.

Look for the burner-card solution. Just like burner phones, these are cash cards that are refillable and make payments anonymous.  Options from gift cards to prepaid Visa and Mastercard refillable cards are available.  That anonymity quest will become more prevalent at least until government finds a way to crack down on them, too.

Stores such as Target and Walmart offer them.  Some cards are refillable, some not, so if refilling is intended, read the terms and conditions carefully.  Others are refillable but require the person with the card to provide their Social Security Number.  So much for anonymity. One of the more interesting ones is the Starbucks card. Starbucks’ card is one that doesn’t require anything but plunking down the cash at a Starbucks and having the clerk and refill the money on the card.

People use them today for online purchases because of the limited amount of cash available put on the card, so any hacker who tried to use it would be sorely disappointed.  There are also the unbanked folks who use them when a credit card is required such as renting a car or buying a plane ticket.

The goal is to completely eliminate cash.  It won’t be this year or next year, but little by little we slide down the slippery slope to a cashless society. Banks and credit card companies say the elimination of cash makes it easier and cheaper for them and provides them with an entirely new way to keep track of purchases and thus add a new profit center by selling personalized ads, as Google does with searches on its website. 

Written for Zip Reports where they do employment and rental screening.

Contact Robert L. Cain at bob@cainpublications.com

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