Landlording & Rental Properties

How I Broke the Law to Protect My Real Estate Investment

Expertise: Real Estate Investing Basics, Real Estate Deal Analysis & Advice, Mortgages & Creative Financing, Landlording & Rental Properties, Business Management, Personal Development, Flipping Houses, Commercial Real Estate
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It’s sad to say, but it’s true. Today I broke the law for my rental property business. I want to tell the story with the hope that you guys can learn something from it.

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So, my company currently has a rental property that we’re fixing up. It’s vacant, and it’s under renovation.

We had been broken into so many times in that property. So it’s what you would call a D neighborhood. But that D neighborhood is very quickly transforming; there’s a lot of new construction around it and a lot of people renovating.

You might have seen neighborhoods like this that were really rundown—not much attention and a lot of crime—and are now very quickly transitioning to being better neighborhoods. There are more and more people on the street, more and more construction, and more and more landlords coming in and renovating. We’re one of them.

A Bad Situation at One of My Rental Properties

So, we’re in this property renovating, but there’s also some vacant homes around it. That’s just what happens in these neighborhoods. You have abandoned properties. And there’s an abandoned property right around the corner from the home that we’re renovating.

We kept getting broken into, and it became evident very quickly that the people who were breaking into our property were coming from that vacant home. They were squatters who were squatting in this vacant home. A squatter means someone who’s living illegally in a vacant property and just kind of making it their house even though it’s not really their house. They are just making it home for themselves.

In sum, they’re breaking into our vacant home under construction, and it kept slowing us down. It kept causing a nuisance and aggravated expenses. We even put an alarm system in the home, and they broke it. It was a very, very bad situation.

Related: How to Solve Common Apartment Issues—and Make a Profit

Reporting the Situation to the Authorities

First, we, like good citizens, complained to the local town. Then, we said, “Hey, we’ve got this vacant property. There’s people in this property they’re breaking into my property. It’s not right.”

The town said, “Great. We’ll file a complaint to Public Works, and they will go out and board off the property for you.”

So we waited. We called up again to check and let them know that we keep getting broken into. We asked, “Are you guys going to board up that house?”

They said, “Oh, yeah. We’re getting complaints from the neighborhood, but we’re several months behind and we’re not gonna be able to do it for you for a couple more months.”

I also called the police department. The police department said unless we catch them in the act or unless we find people actually breaking the law (and of course, when they went to the house, there’s nobody in the vacant properties), they weren’t able to do anything. And they’ve got, let’s say, bigger fish to fry than people who are living in a vacant property and breaking into our construction site. So, we didn’t get much out of the police either.

I could have just waited until the town came out to board off the property; that maybe is what some of you guys would have done.

But—we’re on a timeline, and there’s a lot of other people around the property who are complaining. Plus, I’m losing money by continuing to have to go back and redo the work that gets undone every time these folks break in.

Stressed sick mulatto freelancer is having headache and thinking how to finish his work. He is in a casual smart, at his home office

Taking Matters Into My Own Hands

So, what did I do? I decided to take matters into my own hands. I’m not advising you guys to do this necessarily, but it just seemed like the right thing to do for us.

What I decided to do is I went and found a police officer friend of mine, and I went and got one of our contractors, and we went over to the property. The police officer just kind of held security just to make sure that everybody was safe and there’s not anybody in the property. And if there was anybody in the property, they would be removed.

We went into the house. There's nobody in there. And my contractor boarded up the house!

Here’s what I did that was illegal: That is not my house. I boarded up someone else’s house, and we technically trespassed to board up this house.

Yes. We broke the law. But what I did was a benefit to the neighborhood, to my business, to the police to keep these folks out of this house, and a benefit to the city. I did something the city had planned on doing that was back on their clock to do.

I had to make a calculation on my own and obviously do what would help my company. But also, more importantly, we will help the neighborhood. I felt like in some ways I was being a good citizen by doing it.

So, yes, I broke the law, but I did it for the benefit of the neighborhood and my business.

Related: The Biggest Real Estate Investing Mistake I’ve Ever Made

Learning From This Experience

Now, for you guys, the lesson learned is sometimes you’ve got to take matters into your own hands. We should always weigh these things out. I didn’t approach this from emotion. This is something I calculated and thought about. I’m not saying you guys should take these things lightly. You should make a calculated decision. I weighed it out.

I needed to do this to benefit the neighborhood to benefit my company. and the city is planning on doing this eventually. They just can’t get around to it.

Compare that to, “I’ve got to do something that I’m not supposed to do to get it done.”

You should not come at this thing from emotion. This was a calculated decision that I made to get this done. I calculated, and I made sure there was safety involved and made sure there was an off-duty police officer just in case somebody was in the property. That way, we could be safe.

But breaking the law is not something that you guys should take lightly if you’re considering doing something like something like this yourself.

I’m just giving you guys a glimpse into the landlording business. There will be times—especially if you work in neighborhoods that were D neighborhoods and are on their way to C or B or just rebirthing and becoming a better neighborhood for everybody, including the people that already live there—there may be times when you might have to take matters matters into your own hands. The town might be overwhelmed with dealing with larger issues than people living in a vacant property.

This is a glimpse inside the life of a landlord—sometimes you’ve got to do whatever it takes to advance your business.

In this case, it was technically doing a little bit of trespassing and working on somebody else’s house that isn’t mine. We did what we did. Hope you guys forgive me.

Have a great profitable week.

Do you have (or have you heard) any similar stories to mine? How do you feel about what I did?

Leave your comments and stories below. 

Matt Faircloth, Co-founder & President of the DeRosa Group, is a seasoned real estate investor. The DeRosa Group, based in historic Trenton, New Jersey, is a developer and owner of commercial and residential property with a mission to “transform lives through real estate." Matt, along with his wife Liz, started investing in real estate in 2004 with the purchase of a duplex outside of Philadelphia with a $30,000 private loan. They founded DeRosa Group in 2005 and have since grown the company to owning and managing over 370 units of residential and commercial assets throughout the east coast. DeRosa has completed over $30 million in real estate transactions involving private capital including fix and flips, single family home rentals, mixed use buildings, apartment buildings, office buildings, and tax lien investments. Matt Faircloth is the author of Raising Private Capital, has been featured on the BiggerPockets Podcast, and regularly contributes to BiggerPockets’s Facebook Live sessions and educational webinars.

    Carli Cummins Investor from Fayetteville, North Carolina
    Replied 16 days ago
    Love your honesty when you speak or write an article.
    Ryan Lin
    Replied 16 days ago
    Thanks for sharing, It was one great lesson from your experience!
    George Xenos
    Replied 16 days ago
    I think you did the right thing! I love this site, i am just now starting to learn about Real Estate, i am trying to help a friend of mine promote his real estate in Greece, guys Greece will be No1 investment in 2020 mark my words! I made a small blog, read here if you want why this will happen. In fact it alread started! Mark my words! :-) my English is not perfect buy hopefully you will get the idea
    Wenda Kennedy JD from Nikiski, Alaska
    Replied 16 days ago
    I have done similar things over the years -- painting out graffiti... trimming trees, brush, and tall grass... picking up trash and cleaning neighboring lots, streets and alleys... replacing boards or securing them on vacant properties... I was doing flips in the Los Angeles ghetto when we still called them Equity Purchases (I started in 1976). The whole area around my projects looked better by the time I finished. We usually had a block party around the time that the new people moved into our project. Those parties were a celebration of hope. I was a hero since I had usually rehabbed the vacant property that was the "drug house" on the block.
    D'Andre B. from Cincinnati, Ohio
    Replied 16 days ago
    Thanks for sharing. Did your police officer friend have any legal authority to remove the squatters had they been present in the house? Had they been present how could your police officer friend have removed them without also breaking the law? I'm not passing judgement but only questioning what you have stated... "And if there was anybody in the property, they would be removed." I'm glad it worked out for the best but this seems like it had the potential to escalate very quickly and become a disaster had the squatters been present at the property. What if they were armed and fired shots after you "illegally" gained access to the property that they were squatting in. Does a a squatter have tenant rights to a vacant property via adverse possession rights? This is a very interesting story and i'm interested to read other's thoughts as well as your thoughts on my questions. Worst case scenario.......someone is shot and killed during this entire ordeal. would you have been on the hook for murder or manslaughter. Again i'm glad it worked out but have we really reached a point in society where police officers knowingly help their friends or private citizens break the law? uncle is a sheriff and I had tenants that were squatting and damaging my property but I couldn't go grab my uncle and my contractors to take back the unit by force. I had to go through the painfully slow process of evicting them to gain possession of the unit.
    Mary E Copas
    Replied 14 days ago
    Sounds like they inspected the derelict property and determined that no one was inside it. He does not address the question of what they would have done otherwise -- I assume they would have left.
    David G. Rental Property Investor from Mosinee, WI
    Replied 16 days ago
    Hey Matt great story and by the way you're one of my favorites on BiggerPockets. In 2010 my new wife and I were looking at a foreclosed ranch home on a dead-end street in a great neighborhood. it had mold on the walls in the basement due to the numerous hydronic copper heating pipes broken due to freezing. We were buying it on auction. we were the winning bidder but I knew it wouldn't pass inspection in the shape it was in. The back door had been broken open by someone previously so I decided to put my own deadbolt on and secure the property. I was going to go in to clean up the mold and fix the pipes. It passed inspection and we got the house everyone in my family was worried that I was working on a house that I didn't own but I was improving it and I knew I had to do it in order to make the deal happen. Whew!
    Adriane Allard from South Jersey
    Replied 15 days ago
    I agree with your decision. You need to protect your investment and clearly was not getting anywhere using the proper channels. Thanks for sharing.
    Ariel Lisogorsky from Waltham , Massachusetts
    Replied 15 days ago
    Hey Matt, while I understand why you did what you did (and would have probably done the same thing...) The question is who draws the line on which law can be broken?
    Aaron Stanford Investor from Atlanta, Georgia
    Replied 14 days ago
    I had a similar experience in 2010. We wanted to purchase an FHA owned property in our area, and we were going through the FHA 203K process. All was well until the FHA representative came out to do an inspection to ensure the house qualified for the loan. The report required the seller to repair a screen on the front porch, add a front door lock, and repair some flooring... all things that were in our rehab budget. We took the list to the seller (the FHA), who refused to do the repairs. We were pretty lucky, though. That Sunday, several neighborhood vandals trespassed on the property, repaired the screen, added the front door lock, and just happened to repair the flooring specified in the report. After the criminals completed their heinous deeds, we were able to close on the loan the next week.
    Davido Davido Rental Property Investor from Olympia, WA
    Replied 14 days ago
    Aaron that was well said. There appear to be some good thinking high quality trespassers in your area.
    Davido Davido Rental Property Investor from Olympia, WA
    Replied 14 days ago
    Thank you for the post Matt. You not only stepped up to get it done, you did so thoughtfully. Well done. Seems to me that it might have been possible to contact the owner of the property next door and get the owner's permission? As a side note for you and other BP readers, if that neighboring property were actually abandoned, in the legal sense, there would be no trespass. "Abandoned property in a legal sense is that to which owner has relinquished all right, title, claim, and possession, with intention of not reclaiming it or resuming its ownership, possession or enjoyment. Jackson v. Steinberg, 186 Or. 129, 200 P.2d 376, 377, 378." From Black’s Law Dictionary No one can trespass against an owner who intentionally abandons real estate, because abandonment is defined as the owner relinquishing all right to and interest in the property. Abandonment of real property follows the same principles that govern abandonment of personal property. If a person puts an item out on the street with a sign that says "Free" then that item has been expressly abandoned. If the item has no sign but is put out on the street along with the household garbage, then the owner has implicitly abandoned the item. In either case, when another person comes along and takes the item, our courts will not recognize a claim by the previous owner that their property has been stolen. Abandonment of real estate is similar. The owner cannot intentionally walk away from his rights and responsibilities and then later claim that he/she was trespassed against. In my state, Washington, this reality is specifically recognized in our criminal trespass statute. RCW 9A.52.090 which states in relevant part, “it is a defense that:(1) A building involved in an offense under RCW 9A.52.070 (trespass in a structure) was abandoned;” Nice post, particularly with the video added. Thank you.
    LINDA WETZEL from Sebastian, Florida
    Replied 13 days ago
    I wonder if the owner and the town would have given you permission to board up the house, if you had asked. If yes, that would have removed any illegality for you.
    Stephan K. Rental Property Investor from Clearwater, FL
    Replied 9 days ago
    Trespassers have installed a water heater and a heating coil in the AC unit just a day before a four-point inspection in an empty bank-owned property with a totally unresponsive property management company. Such a coincidence. (Even in Florida you only need to provide heat for a four-point - no cooling. So if the outside unit is stolen, you can still heat with a heating coil. And if there is no power, the inspector does a visual inspection.)
    Gordon Cuffe Investor from Roseville, CA
    Replied 2 days ago
    when will you skip trace to find the owner of the property so that you can contact them and buy it?