Stop Writing Off Move-Out Debt — Start Profiting From It

Pete Neubig

All right, welcome everybody. Appreciate you taking time out of your busy day to listen to Robert and Tony on Rent Recovery. This is a big one, guys — we had over 100 people register for this one, so it sounds like a pretty important topic. Thanks, everybody, for jumping in, appreciate you. Just like always, we keep this super lean, 30 minutes.  I've known Robert for a long time — he's been a mainstay at NARPM, one of the OGs for property management. He has forgotten more about property management than I've ever learned in my life. He's one of the top people in the industry who knows everything about property management. Tony and Robert created a company called Rent Recovery. I'll let you guys take it from here.

Tony Locke

Thank you so much. That's called stolen valor. Stolen valor, man. Who's the OG, buddy? My mistake, sorry about that.

Robert Locke

Thank you for letting me share this, I appreciate it a lot. Our story begins back in the late 80s, when we started the business. We were in a city—

Tony Locke

Were you guys using AI back then? In the 80s?

Robert Locke

Hey, hey, hey — we didn't even know how to spell AI back then. We had judgments, and we moved people out of our rental properties, and they owed us money, and we didn't know what to do with it. First ten years, we just threw it in the bottom drawer. Second ten years, we drove it over to a consumer debt collection company — there's a thousand of them out there. Pretty frustrating experience. We'd have people who owed us 5 or 10,000 bucks, and we'd give it to a debt collection company for three, four, five, six years, and they'd collect a hundred bucks a month or a hundred bucks a quarter and send it to us — wouldn't even tell us who it came from.

So in 2000, I met Monica Gilroy. Monica's specialty is creditor's rights — you and I call it debt collection — but she's really good in this space. I said, "Monica, I want to learn this space, I want to figure this out myself and do it in-house." She warned me: different learning curve, different body of laws, different trade association, different software — all my property management training wasn't going to help much. I said, "Yeah, okay, but I've got a little time on my hands, I'm going to go ahead and do this."

Here's what that looked like from a success standpoint. Bottom left of the screen says 2000 — that's when we started doing this in-house. Going up the left side is how much we collected. Our first 5 or 6 years was our learning curve. We started with 300 doors, so we weren't a giant company by any means, but we collected 40, 50, 60, 70 thousand bucks a year until we started — this was just from our own properties, we didn't collect for anybody else yet. We were figuring out the laws that regulated the business and how to follow the rules. We learned some big lessons and it jumped to 80, 90, $100,000 a year. So in the first ten years we collected 700 grand, and we were growing the company the whole time — 700 grand over ten years is not nothing, but it wasn't a monster amount either.

Then we learned some more things and it jumped to $130, $150,000 a year. Then we sold out to Coldwell Banker. So: first ten years, 700 grand; next five years, 600 grand; by the time I sold to Coldwell Banker we'd collected a million and a half dollars just from tenants who'd moved out of our company. We had a premium model — we were north of Atlanta, average rent for us was about $1,400 a month [note: the figure that follows, "that relates to about $2,200 a day," isn't fully clear in the recording], and we required a 620–625 credit score, and we only had 5 or 6 evictions on 1,100 doors. So, a premium model, and we still collected a million and a half dollars.

But when I sold to Coldwell Banker, they made me sign an agreement to stop doing it — because I would have been collecting on what had become their tenant, and they didn't want that. They were stepping into a toxic area called property management, they didn't know what they were doing, and they certainly didn't want me pursuing those tenants post-move-out.

About two years ago, Monica and I were having dinner, and she said, "Robert, I have two or three managers a month asking me when you and Robert are going to do that debt collection thing for the rest of us." So two years ago, we resurrected Rent Recovery and started collecting for other property managers. All told, we've got 20 years in it, and I've personally collected a couple million dollars.

So what we bring to the table: first, 35 years of property management experience. I know everything you guys do — move-in, move-out, security deposit transmittal forms, normal wear and tear — I know your space inside out. We started in our basement with five rental properties we owned, grew to 150 doors, and sold it to a Fortune 500 company. We had 8,000 or 9,000 tenants go through our system, and I've got the scars to prove it.

Second, we know credit reporting. Back in the early 80s when I got into the business, there were no tenant-screening companies, so I had to figure out how to get a credit report. I stumbled into a relationship with Equifax way back in the early 80s, and I reported every tenant, every month, to the credit bureau for 30 years. I know what putting a negative mark on a tenant's record does to their credit score. We did a bunch of lease purchases — I could raise a tenant's score by 70, 80, 90 points within a year and close on a lease purchase. So I know the credit reporting space really well, and we bring that post-move-out collection experience to the table.

So Monica and I started a couple of years ago reaching out to other property managers, like the viewers on your channel today, and doing this for them.

Robert Locke

So, flip gears — I'm going to keep going fast, you're going to feel like you've been drinking out of a firehose, so let's keep it moving.

Three buckets of money to pursue. The first, most obvious, is past tenants. If they moved out a year ago, that's an easy one. We can go back two, three, four, five years — the problem is the older it gets, the less percentage you'll ever collect. So the low-hanging fruit is tenants who moved out in 2026. The first thing you want to do when you get off this call: run a report in your software for past tenants for 2026 — you're looking for something called "unpaid balances" or "delinquent accounts." Pull that report, write the number down, then do it for 2025, 2024, 2023, and add them up. If you've got tenants out there who owe you a total of ten grand, you don't need us. But if you're managing a couple hundred doors, you're liable to have $100–150,000 out there. We've got clients managing 5,000 doors with $1.3 million sitting out there that we're pursuing. So we deal with small managers and big managers.

The second bucket is current tenants, as soon as they move out. If you turn that business over to us 30 to 60 days after the tenant moves out, we can push the collection rate up to 50, 60, 70%, because we know how to collect and tenants are learning how these processes work.

The third bucket — and this is the other thing we bring to the table — I'll call it "enhanced lease." Over the decades, Monica and I have figured out five, six, seven new things you can put in your lease that expand the amount a tenant owes if they move out under bad circumstances. We'll give you language to consider adding, so that when you evict somebody, or somebody abandons the property, instead of them owing $5,000 under your current lease, an enhanced lease might take that number to $6,000, $7,000, $8,000, $9,000. We know how to make that number bigger, so we can grow the pie.

Now I'm going to get into the weeds for about ten minutes. Seven stages of pursuing tenants in this space.

First: selecting the tenants worth pursuing. Not every tenant is worth pursuing. If you rent to a tenant who doesn't care about their credit score, you're not going to have success collecting from them. If you took over management from a self-managed owner who didn't do a move-in inspection or have an application on file, it's going to be much harder to collect. We'll give you training, videos, and checklists for exactly which tenants from the past are worth pursuing.

Second, we teach you how to deal with the owner — and this is where we really bring some intellectual property to the table. Nobody wants to do this, because historically there's been no money in it for the property manager. For 30 or 40 years, if a property manager chased a tenant after move-out and collected $5,000–5,500, that money belonged to the owner — it's unpaid rent, it's property damage. The property manager might get a couple of late fees, bounced-check charges, maybe 8% of the amount collected. There's really no incentive for the industry to do it. We did it that way ourselves for the first 5 or 6 years. Then we realized some owners didn't want to be bothered, and we figured out how to collect that money and keep it — going from a 30% profit margin to a 75–85% profit margin. So our mission is to show property managers how to do post-move-out collection and put that money in their own pocket, with the owner's full knowledge and agreement. I'm not talking about anything dishonest or unethical — we've figured out how to make post-move-out collection profitable for the property manager.

Once we locate a tenant, we start by sending a letter or two — these come from Monica Gilroy, my partner in this. The Fair Debt Collection Practices Act requires that we send a letter with eight specific ingredients in it, to make sure they've received it — certified mail, certified email, knocking on their door, whatever it takes, kind of like serving someone in a lawsuit. If they don't respond, we start reporting to their credit score. There are companies out there that claim to do this, but most only report positive information, or only report unpaid rent and not contract charges or property damage. We're direct members of Equifax and TransUnion — we're the actual reporting service to those bureaus — and we report unpaid rent, contract charges, property damage, everything. We did this for 30 years; when we were at a thousand doors, we were reporting 1,800 social security numbers every month.

This is a marathon. Reporting to the credit bureau takes a while to have any effect — the first report often does nothing, because the tenant has other positive credit reporting and the amount owed might only be $1,000–3,000. Report month after month for four to six months, though, and you start dropping their score and waking them up. About 50% of the money we collected at Crown came from these first two stages.

The next stage we do with the property manager's full cooperation: we go to the county where the property was located and file a legal action to get a judgment against the tenant — wherever the property was, not wherever we are. That takes the manager's staff bringing us the lease, the move-in/move-out inspection, the security deposit transmittal form, and our attorney. We can get a judgment against the tenant in your geographic area because of our partnership with Monica Gilroy — she's a creditor's-rights attorney with clients all over the country, whether it's a mortgage company, a bank, a finance company, or credit card companies. She's got a national platform for post-move-out collections, and she's a co-founder of Rent Recovery. Once we get a judgment, we go out and perfect it — we've put liens on probably a hundred car titles.

Pete Neubig

We've got a question here from Aaron Hamm — does this include California?

Robert Locke

Yeah — this is federal, not state. Think of debt collection like fair housing or lead-based paint — it's federal, no state boundaries. If you're in Texas and the tenant moved to California and the owner lives in Michigan and we're in Atlanta, there's no boundary at all. It works for the state of California — it does not work for the country of Canada.

Pete Neubig

[To Robert] You caught me, I didn't catch that — [attendee's name transcribed as both "Christina Mulder" and "Krishna"] caught you, she asked if it includes Canada.

Robert Locke

I've never been asked that question, I've never done that before — you caught me. This is federal to the United States, so it's not Canadian, that would be my assumption. That's a great question.

Pete Neubig

You got him — you stumped Robert!

Robert Locke

Well, I didn't say I was stumped — I said I don't know, and I don't want to give a knee-jerk answer. Good question.

Anyway — perfecting the judgment. This takes time. Sometimes there's no response, no reaction, for six to nine months. We don't set the expectation that this happens fast.

Now I want to show you what Tony built, because this really is impressive. Tony is a WordPress master, a full-stack developer — he's been doing technology since he was about ten years old. When we decided to do this a couple of years ago, Tony said, "I know what we need for a website."

Robert Locke

When you join Rent Recovery, you get access to our dashboard. The first thing set up is a manager dashboard — on the right are all the tenants the manager has under one category, tenants we're sending letters to. This is the property manager, this is the tenant's name, the address they rented, and the amount they originally owed the manager. I'm looking at the admin view here, so you can see different property managers. All the tenants for a manager that are in stage four — where we're reporting to the credit bureau — are listed here. Each tenant gets their own code.

When you click into a particular tenant, the case file page comes up — on the left is all the information you've given us, then for that tenant: how much they owe, their move-in and move-out dates, the tenant code or manager code, the manager's email, the tenant's email and phone number. Any interaction we have with the tenant — a call, a letter — we log it in an event form: a one-sentence description of what we did, a promise, a payment agreement signed, a dispute, whatever it was. Then we note the email for the point of contact at the management company — could be the broker, could be the bookkeeper — hit submit, and they get an email. Read it or don't, we don't mind, but that's how we keep the manager notified of activity on that tenant. The manager can come back to this page any time and review every message we've sent from the start of the relationship — an ongoing record, so the manager doesn't have to call us or wonder what's going on.

Pete Neubig

Another question here, Robert — is this information that can be pushed into your PM software, or is it just the other way around?

Robert Locke

We don't need an API into your system. You'll pull a report — say, for 2026 — hit CSV, and send it back and forth with your information. When you're talking to the resident, can that get pushed into the property management software? Tony, you want to answer that?

Tony Locke

We could definitely write — we could send you a file that you could upload and push into your property management software, but we're not using an API, because it doesn't require that kind of communication. It would just have to be a request, and we could do something for somebody.

Robert Locke

Thanks, Tony — we've never had that question, good question.

Now, this is the manager's document library — training videos, document downloads, options for dealing with the owner, housekeeping issues, what documents to archive for future use, lease enhancements that can increase what a tenant owes, how to handle disputes. We've got downloads and documents prepared for you to tweak and use in your model — tenant ledgers, reporting, financial reporting, payment agreements, training videos. Everything you need to make this work. One of the reasons this works is that we've been doing it for 25 years.

Pete Neubig

Another question here, Robert — if I have an individual property owner, can I refer them to you, or do you only work with property managers?

Robert Locke

We don't like dealing with owners directly, because they don't understand the issues — fair housing, normal wear and tear, the regulations and best practices property managers work under. So we prefer working with the manager. We've had a couple of managers ask us to get on Zoom calls with the owner to explain how the debt collection process works, but honestly, I want to work with somebody who understands move-outs, lease language, contract charges, property damage, move-in and move-out inspections. I want to deal with somebody who's on my level.

Pete Neubig

Another one — what if somebody already has a debt collector? Can they still use Rent Recovery, or would you replace that debt collector?

Robert Locke

Two ways this works. Some managers stop giving new accounts to their current debt collector because they're happy with what that collector is getting them, and just give us their new accounts. But honestly, we can't find many managers who are happy with their current debt collector — I'd say the next person who tells me they're happy with their debt collector will be the first.

Tony Locke

Yeah — and not only do they never collect any money, but when they do, they take like 80% of it. It's ridiculous.

Robert Locke

Yeah — a lot of our clients had accounts with, say, Hunter Warfield, and those are easily terminated. Monica sends an email to Hunter Warfield, we've done that for a couple of years, and they never push back — they know they do a bad job, most debt collection companies know that. So the manager can terminate them, hand those accounts to us, and we can start working them again.

As far as payments — it's a percentage, just like managers collect rent. We give the tenant a payment portal — different software, you can't use your property management software for it, it's a separate collections platform, kind of the industry standard for debt collection software. When someone wants to pay off an account, we open a portal, they send it to our escrow account, and we report to the manager, just like the manager reports to an owner — a tenant ledger to take in money, an owner ledger to send money to the manager. It's similar in structure to a portfolio, or Rent Manager, or Rentvine, but the software itself has different ingredients. It's 50% of what we collect.

Pete Neubig

Is that even on the older stuff?

Robert Locke

It's just 50%. I know it's usually a sliding scale elsewhere, but it's 50% — and yes, we will collect from owners as well. We have very little experience with that, though.

Pete Neubig

I'm going to tell you a quick story, Robert — when I sold Empire, I had to write a check for $37,000 because owners had owed me that money. I highly, highly recommend you don't let it get to that.

Robert Locke

We had a manager come to us with about 300 tenants and about 25 owners, and the total for the owners was $280,000 — over eight years of owning the property management company. It just proves that over time, it can catch up on you. So yes, you can use this on owners too.

Pete Neubig

Another question — what happens if I don't do a move-in inspection? Does that make it harder? Can I still send it to you guys?

Robert Locke

Sure you can. Without a move-in inspection you can't pursue property damage on the move-out, but you still have two other categories: unpaid rent and contract charges — and it's the contract charges we can beef up a lot: late fees, early termination fees, default charges, eviction charges, all of that.

Pete Neubig

We have one more minute — Robert, do you have anything for a sign-up?

Robert Locke

Go to Rent Recovery — rentrecovery.com — I just put that in the chat for everybody.

Pete Neubig

Question here — do you know what percentage he charges?

Robert Locke

I think Monica said 50% on anything collected — let's double check that. Yep, 50%.

By the way, you do not need a judgment. A lot of people think they need a judgment against the tenant for us to do this, and you do not. Our claim is whatever we can defend in unpaid rent, contract charges, and property damage.

Pete Neubig

Excellent to hear. Sarah's got a question — what's your success rate on how quickly you've seen recovery happen, once a tenant sees a third party is collecting and not the property manager? [To Robert] You're going to have to ask that again — Sarah's asking whether you see a difference in getting money faster from a third party versus the property manager collecting it themselves.

Robert Locke

I don't know how to answer that — I'm going to speculate, I don't have a hard number. Tenants kind of think they can give the property manager the finger and walk away — that's the reality, because the industry hasn't been very successful pursuing money post-move-out, so the public doesn't think property managers have any collectability power, and they think they can dispute it, walk away, and ignore the property manager. But once their credit score starts taking a dive — it's going to take a little time for this to work. It's a marathon, it takes time, but it does work. They go to buy a new car, or refinance their house, try to get money from a bank, and suddenly they're stuck because of this on their credit. Then they call and ask how to get it off their credit, and that's when we negotiate and get them on a payment plan.

Pete Neubig

If anybody has questions, put them in the chat. For our next webinar — go ahead and register if you'd like, it's October 6th. We're talking with my business partners at Weekly Media — Heather Park and her right-hand, Julie Durante — about SEO, or really the new version of SEO. What used to work for SEO and Google has been changing rapidly, so that one's October 6th. Later in the month we're also talking with Alex and Lacey at Clear Digital on something very similar — it's a big topic, getting the most out of your money on how to get found in AI.

Robert, let me see here — I've got a bunch of thank-yous. Are there any costs besides the 50% of what's collected?

Robert Locke

Yes — reporting to the credit bureau costs money, we pick some of that up, it's $2 per tenant for reporting. So if you've got 20 tenants being reported every month, that's $40, and we take that out of collected funds.

Pete Neubig

And you said 50% of your collected funds is kind of in that stage four/five range — remind me, what's your typical percentage of collected funds overall?

Robert Locke

We've only been reporting to the credit bureau since spring of this year, so we're ahead of our own metrics — the only numbers we really have are from our 20 years at Crown, where we collected a million and a half bucks. Back then I didn't keep metrics on percentages — I didn't think we'd ever do this for other property managers. We're at the front end of it now. We've got about 35 managers, and we're collecting on about $10.5 million right now.

Pete Neubig

Well, if anybody else has questions, we're going to let Tony and Robert go — I appreciate it, last chance though. Robert, thanks so much for building this — I know a lot of us have collection agencies, but honestly, that money for me just went down a black hole, never to be heard from again. Having somebody following up, that you have visibility into, who actually has a program and is actually collecting, is pretty good.

If we wanted to do this in-house, where could we learn?

Robert Locke

You could go to rentrecovery.com and probably learn as much from us as you can. We did a breakout session at Broker Owner this last year — how to build a post-move-out rent collection program in-house — and we went through the steps. When I was done, I couldn't find anybody interested in doing it on their own. It's a different set of laws — the Fair Debt Collection Practices Act, the Fair Credit Reporting Act, the Telephone Consumer Protection Act — it's a whole different area of study. You'd have to do workshops, get designations, just like with us. It's harder than it looks — different software, different rules. But anybody can do it — I graduated from Michigan State with a solid C-minus, took five years to get a four-year degree. Brilliance isn't what's required, you just have to decide to open another business, learn it, and figure it out over time.

Pete Neubig

I'll say this — Robert's one of the most giving people out there. He's got tons of videos on his website. Go to rentrecovery.com and you'll see all of Robert's videos — he gives back so much to this community. You'll have a lot of information there.

One last thought — this is a diminishing asset. What's sitting on your books today — after 90 days you're not putting anything new on the table, the older that debt gets, the less chance you have of collecting it. So this isn't something to put off until January 1st.

Last question, from Ryan Harkins — for monthly reporting, is that something we should consider as an option for current tenants? Who's the 800-pound gorilla in this space?

Robert Locke

The only company really worth dealing with is [company name unclear in the recording]. There are other players out there — RentBureau, for instance — but the one to deal with is [same company], and it's cheap, and they're very good at it. Tell them I sent you — they'll waive the $500 setup fee.

All right, thanks for the question.

Pete Neubig

All right, guys — thank you, Robert, Tony, thanks so much for being here. I'll see you at NARPM Nationals in Vegas.

Robert Locke / Tony Locke

Yes — Vegas, yep, we'll be there.

Pete Neubig

I'll stop by your booth, you can stop by mine, and we'll pal around. Appreciate you guys, thanks so much for being here.