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Wild Ups & Downs Of Real Estate Investing

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“You can’t be serious!” I told my real estate manager.

“Unfortunately that’s what he said,” my property manager replied.

The former rehab coordinator was just informed that we had just been fired and didn’t really help, but were kicked back by at least two contractors who were using it. ..

“Well, can I fire him again?” I asked.

Unfortunately, I couldn’t.

Shortly thereafter, we came to a similar conclusion about the exact same real estate manager who told me about the rehab manager kicking back. She had a deal with her lover to her son-in-law who worked as our handyman. For multiple jobs I declined, she approved him anyway and moved the cost from one property to another in order to make the budget look right. That led us to dismiss her and win the dispute over her unemployment.

Random acts of nature

Then I returned to work as a rehab manager. One week we started receiving calls about one of our properties: the sewer was backed up. It doesn’t make sense,I thought. I just set the scope for that line and there were no holes, bellies or roots.

Now it turns out that the line didn’t fall enough (that is, the sewage was too flat to flow through the pipe), and we had to dig into the entire line. Oh, and the ground happened to be made of rock and hard clay. The exchange would cost us $ 10,000. And during the last two weeks of trials, no tenant was satisfied.

After a while, the largest apartment we owned was flooded. The unit was spared, but the basement was almost submerged, ruining all of the hot water heaters, boilers, gas pipes, and doors, pushing in what looked like a few tons of mud.

Good times.

Related: Seven types of tenants that cause headaches for major landlords

So I started working while listening to complaints from tenants one after another. It was difficult to blame them because we couldn’t turn their gas back on because the city needed an updated gas line before they signed off. However, we replaced those lines with hot water heaters and doors and hired a contractor to clean the entire basement. They brought all the equipment there and were ready to start the next day.

After that, it was flooded again.

All their equipment was destroyed and the water heater and door had to be replaced again. This time the floods were even more intense and the electrical panels were damaged. So all of them had to be replaced. And I had to deal with two separate flood claims.

Even better times.

Unexpected problem

Then the real estate manager we hired managed one of the 12 apartments. HAP contract Due to the ongoing dispute, we decided to cancel the management contract. The property wasn’t kept in good condition (although it was much better than the previous apartments that hit the ground by the management company).

Have you ever set foot in a vacant unit in the heat of 90 degrees in the middle of winter? I have Have you ever been charged $ 150 to “show your tenant how to use a thermostat”? I have I’ve been told that the manager has to decline 14 out of 15 applicants, but after taking over the building, did you just accept one out of two yourself? I have Have you ever been told by a management company that refused to run Craigslist ads that “Craigslist doesn’t work in this area”? I have

Anyway, I deviate. The biggest problem here is that the HAP contract is not certified to manage real estate. Also, as in most government-related cases, it is very bureaucratic and complex. To learn, the process included a three-day course and became familiar with several HUD handbooks, including: HUD Handbook 4350.3Clock in for free 794 pages!!

All of these manage one 12 unit building.

The person is the person

And there was a receptionist who got drunk and started going to work. Or a maintenance technician who brought beer for lunch. Or the receptionist who fell asleep during the meeting and filled out a job application at work. Or a maintenance technician who didn’t know how to use a tape measure.

Some tenants were drunk and yelled at all their neighbors (or us) all day, especially all night. There was a tenant who paid his neighbors and our staff every time he saw them. He also grabbed the car as it passed by. The other had two prostitutes quarrel with him trying to push each other out of the balcony on the third floor.

At another time, the tenant’s boyfriend had to break the windows to get into the building (?), And he was bleeding all over the carpet in the hallway and almost died. Another resident, a son (or such person) required by law, appeared and police blocked the street in front of our apartment. Of course, many A / C condensers stretched out and left, and in one case, after being evacuated, the tenant decided to steal our toilet for some reason. I’m not sure about the resale value of used toilets, but I don’t think there is anything.

What about the apartment we bought in Skidrow? It was very cheap — we had to buy it, right? We ended up crazy about it for $ 120,000 and it was only valued at $ 100,000.

Related: 11 problems that only real estate managers have

Then there was the house where we doubled my little $ 25,000 budget and spent $ 50,000 rehab to go all-in for $ 75,000. I didn’t want to try refinancing because I was convinced that the appraisal couldn’t exceed $ 60,000.

At one point our loan failed and we had to drop out of the house we had a contract with Fannie Mae. We kissed $ 4,500 goodbye that day because they need 10 percent serious money. And there were times when our loan didn’t come in at all many years ago, and there were creeping concerns about running out of money altogether! It was especially fun.

Also, one lender requested hundreds of documents, lending us a large amount of money and letting us pay for dozens of assessments in a process that took more than six months.In the end, he proudly offered us a full percentage point, just 65% of the loan, than promised. LTV And something like 2.5 points (compared to the promised 75 percent) (not just one). We were told that it was because our property was “not in the best area we expected”, even though we were telling you exactly where it was from the beginning.

I was able to continue, and then. Real estate investment sounds like it all at once.

Oh, by the way, we are millionaires now.

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