Bank Orphans

A tenant just moved out – not the one who tied his toilet seat together with shoe strings. Not the one who left behind 42 gallons of used kitty litter. And not the one who had a freezer full of meat but no electricity.

The tenant who just moved left his space clean. I called my handyman to help me get the house into re-rentable condition. “I’m available,” he said, “but you’d have to pay cash this time.”

When Gary and I became landlords, I learned about bank orphans. For a slew of complicated reasons, lots of people don’t have bank accounts. They pay and get paid in cash. When cash isn’t an option, they purchase money orders, cashiers checks, or similar alternatives at a premium. Sometimes they use debit cards that charge a fee for every single purchase. At first, this lifestyle seemed incomprehensible. How could you carry every dollar you own in your pocket? Over the years, though, I’ve listened to convoluted stories about how people get into that quagmire and then can’t work their way out of it.

One guy told me he hadn’t filed a tax return since he left his wife. They had two children, and remarkably, each of them took one kid after the divorce. His ex was greedy, he said, and he was afraid that if he showed his real income on a tax return, she would try to take his child or sue him for more support. Instead, he went off the grid. When he met me to look at the space I had for rent, he brought a mason jar of cash.

Other tenants avoid banks because they want to keep their food stamp status, their section 8 housing, or their CalWorks ticket. I met a veteran who had a HUD-VASH housing voucher, sold chocolate-dipped strawberries on the side (for cash) and sub-rented his apartment (for cash) while he stayed with his girlfriend. The VA payed the rent, and he made a nice profit.

A section 8 recipient told me he has a rental property in Mexico and has a family member collect cash payments from his tenants. That way, he can live cheaply in the U.S. and still make money.

My friend, Susan, recently asked me if anyone who deals strictly in cash does so for a legitimate reason. I've been exposed to bank orphans for thirty years now, and based on my experience, the answer is no. It doesn't pass the smell test.

Pot dealers, for example, also often pay in cash – cash that smells like pot. According to one outlet, some growers lost $100K in cash during a recent wildfire, and probably a few of them were getting subsidized housing. I know plenty of moms who enjoy a pot gummy every night before bed to help them sleep better. Other friends smoke it, bake it, or medicate themselves with it for legitimate reasons. These people forget that the federal government still hasn’t legalized pot, and lots of mean dogs, guns, and black-market cash come with that product in the weird world of the bankless. Believe me, I've cleaned up the mess they leave behind. But Handyman wasn’t a pot guy, a voucher recipient, or a bank orphan. I’ve hired him for years, always paying him with a check to do odd jobs at rentals. What changed?

He told me his friend filed for disability and got it. Then, his friend filed for in-home health care (IHSS) and got that too. “That’s terrible,” I said. “I hope your friend is okay.”

“It’s actually great news," Handyman said. “My friend is fine, and now that he got his disability, I won’t have to work either.”

“How’s that supposed to work.”

“I’m going to be his in-home health care provider. My income will be low enough that I’ll qualify for food stamps, free medical and the Care program too.” Care is a subsidy the electricity company provides for the needy. Gas and propane companies have a similar offering.

“Will you have to move in with your friend to take care of him?”

“Oh, no. He doesn’t actually need care. We’re going to split my IHSS paycheck fifty-fifty. Now, I just need to get my handyman clients to pay me in cash.” He looked at my gobsmacked expression and laughed. "It's a thing," he said. "People do this all the time. There's even kind of a bidding war for splitting IHSS paychecks, you know, to see who can cut the best deal."

My work has exposed me to a crazy underworld, and I thought I'd heard of all the scams. One aged-out foster kid I rented to said the worst one is when people take in kids for the money, then have them declared disabled so the stipend goes up. She knew foster children who had been put in special ed classes even though there was nothing wrong with them. Their foster families just wanted the extra cash.

Ultimately I decided to go with a different handyman, a guy who pushes back when I tell him what to do. He loves an excuse to buy a new power tool and insists that we drive a truck too big for me to parallel park. But 25 years ago, he promised to show up, for better or for worse, and so far, he's kept his word. If he ever decides to go off the grid, I'm going to make sure he does it in Tahiti. With me. Of course, we’d have to take our kid with us too.