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Jennifer Y. Park
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The Forever EVICTION

Jennifer Y. Park
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Posted Apr 5 2024, 20:39

Hi BP community, I'm looking for any support, encouragement, wisdom, because I'm feeling pretty defeated as a newer investor. School of hard knocks is costing me quite the penny, and now I'm questioning REI altogether.

I purchased a SFR in Independence MO, was $80K. I put too much into renovations because of the classic found a bad contractor story, so had to get another contractor out, and after 9 months holding cost and about $60K in repairs, $3K in appliances, I got the place rented. ( I also refinanced and was able to get about 133K out, which I paid off my HELOC and credit cards I used to pay for all the renovations and PP).

And if that wasn't bad enough then I paid a leasing agent to find a quality tenant, and of course this tenant paid only once, in Sept. 

November pre-eviction process was started, December got an attorney to evict. JAN hearing set, but was canceled because of weather, rescheduled for FEB. Tenant appears in court and requests for a trial. Prior to trial date, tenant make a deal to pay rent - so gives a check - and we dismiss the case, BUT THEN THE CHECK BOUNCES! 

So, now we are waiting on court hearing to set aside the dismissal - hearing set for APRIL, and likely (hopefully) I can proceed with trial for eviction in MAY!! 

So many rookie moves, and so many things I'm kicking myself over, but I share this story so others can learn as well, that even in landlord friendly states, things can take a long long time. (Yes, I should've only accepted a cashier's check, I'm also reading that even cashier's check can be forged?) Only reason why I accepted was because attorney said if he writes a bad check, then that would be a felony. 

Yes, I've reported to bad check unit, but not sure that there's going to be any success in getting money back from that. And now I'm concerned that this tenant is going to file for bankruptcy. 

Any other blinds spots I'm missing, or ways tenant can get away scamming out of paying rent?

I've thought of cash for keys, but out of principle, I want it want his record so this does not happen to any other landlord. 

I am considering selling the place, but not sure if I should given that I have a 142K loan in place with pre-payment penalty, or if I should just see this eviction through and just try my hand at getting another tenant in there vs possible lease optioning the home out. 

I'm hoping one day this will make a good story, but if there's any other words of advice, I'm open to it all. Thanks. 

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JD Martin
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JD Martin
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ModeratorReplied Apr 5 2024, 21:34
Quote from @Jennifer Y. Park:

Hi BP community, I'm looking for any support, encouragement, wisdom, because I'm feeling pretty defeated as a newer investor. School of hard knocks is costing me quite the penny, and now I'm questioning REI altogether.

I purchased a SFR in Independence MO, was $80K. I put too much into renovations because of the classic found a bad contractor story, so had to get another contractor out, and after 9 months holding cost and about $60K in repairs, $3K in appliances, I got the place rented. ( I also refinanced and was able to get about 133K out, which I paid off my HELOC and credit cards I used to pay for all the renovations and PP).

And if that wasn't bad enough then I paid a leasing agent to find a quality tenant, and of course this tenant paid only once, in Sept. 

November pre-eviction process was started, December got an attorney to evict. JAN hearing set, but was canceled because of weather, rescheduled for FEB. Tenant appears in court and requests for a trial. Prior to trial date, tenant make a deal to pay rent - so gives a check - and we dismiss the case, BUT THEN THE CHECK BOUNCES! 

So, now we are waiting on court hearing to set aside the dismissal - hearing set for APRIL, and likely (hopefully) I can proceed with trial for eviction in MAY!! 

So many rookie moves, and so many things I'm kicking myself over, but I share this story so others can learn as well, that even in landlord friendly states, things can take a long long time. (Yes, I should've only accepted a cashier's check, I'm also reading that even cashier's check can be forged?) Only reason why I accepted was because attorney said if he writes a bad check, then that would be a felony. 

Yes, I've reported to bad check unit, but not sure that there's going to be any success in getting money back from that. And now I'm concerned that this tenant is going to file for bankruptcy. 

Any other blinds spots I'm missing, or ways tenant can get away scamming out of paying rent?

I've thought of cash for keys, but out of principle, I want it want his record so this does not happen to any other landlord. 

I am considering selling the place, but not sure if I should given that I have a 142K loan in place with pre-payment penalty, or if I should just see this eviction through and just try my hand at getting another tenant in there vs possible lease optioning the home out. 

I'm hoping one day this will make a good story, but if there's any other words of advice, I'm open to it all. Thanks. 

Real estate is a numbers game. If you do it long enough you will always end up with a bad tenant. I think it can work out best if you get your horror stories over early; some people get roses and rainbows with their first tenant, think "this is easy street", pick up a couple more properties, then get a bad run or two and lose everything. You're learning some expensive lessons but you'll come out of the other side. I lost 6 figures on a new construction build (listen to my podcast, in my signature). I came out the other side. I got an expensive schooling but I was able to put all of those lessons to work down the road to build a pretty nice little empire. 

As for advice, get the tenant out of there and start again. If you are local self managing is not that difficult, you just have to have the mind for creating and following a process. Renting a house is like painting a car or house - 90% of the work is in the prep work. By the time you get the tenant in the house virtually all of the real work should be done. That means effective showings, effective applications, checking references, background checks, collecting cash or cashier checks for first & deposit and waiting for them to clear, starting the eviction process immediately if they are a no pay, etc. 

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Eric Gerakos
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Eric Gerakos
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Replied Apr 6 2024, 07:35

You bought a very cheap(undesirable) property in a cheap(undesirable) neighborhood. Those properties typically only attract undesirable tenants. Real estate pricing is based on demand and desirability so very cheap properties are often money pits with high maintenance and high vacancy. They look great on paper but the reality is often quite different. Better to pay more and buy property where people actually want to live. Better appreciation, higher rents, lower maintenance etc. best of luck to you.

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Bruce Woodruff
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Bruce Woodruff
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Replied Apr 6 2024, 07:43

Sorry this all happened to you! But don't blame Real Estate alone for the horror story, and stick with it. 

Look at it this way - you did just about everything wrong that a new investor could do and you still survived! You started off with a BAD Contractor and a BAD tenant...

Just learn from the mistakes (as you are) and carry on, Make back your losses and tell us your success story next time.

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Steve K.
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Steve K.
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Replied Apr 6 2024, 08:27

I’d sell and start over again in a better location. 99.9% of the failures I see in real estate are due to buying in a bad location. You pay more for better locations, but they are so much more forgiving and so much more likely to be profitable over time. The initial returns are lower on paper in better locations (lower cap rate, less initial cashflow according to the magic spreadsheet), but the overall returns in reality are much better including all the different ways people make money in real estate (gained equity through natural and forced appreciation, principle pay-down, increasing rents= higher cash flow when looking at the big picture if you buy and hold, depreciation tax benefits, plus way less of the big profit killers like turnover, non-paying tenants, property damage and theft, dealing with bad contractors because good ones don’t choose to work in bad areas either, etc.). Good luck! At least you’re “in the arena” out there doing it gaining experience and learning the hard lessons. If you start over in a better location with higher rents, you’ll have a much better chance of success IMO. 

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Calvin Thomas
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Calvin Thomas
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Replied Apr 6 2024, 13:34

Stop buying real estate in sh!tty areas. Invest in quality, not quantity. Don't feel bad or be too hard on yourself. We've all been there once. If you do it again, we can help you, but once you get a pass.

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Theresa Harris
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Theresa Harris
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Replied Apr 6 2024, 13:40

If you got an attorney to evict in Jan and they failed to tell you to get a cashier's check or money order and wait for it to clear before dropping anything, then your attorney sucks.

Real estate is a marathon, not a sprint.  I had two bad tenants back to back in one place-one was good, but not sure what happened, but she stopped paying and it took a bit to get her out (eg a month).  In the long run, I was able to rent it for more and that helped recoup the lost rent.

I don't know what a $80K house looks like, but if it is a super cheap home, they look good on paper, but attract bad tenants and cost you more in the end.

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Jennifer Y. Park
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Jennifer Y. Park
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Replied Apr 10 2024, 09:33

Thank you all so much for the advice and encouragement! Sharing what feels like a failure is not easy, however, I must say, I have learned a lot through this process....and at least it's a cost I'm able to absorb. So I did at least stay within my risk tolerance - but of course hoped for better outcomes. I'm heeding everyone's advice and will go back to the drawing board. 

ARV was $195K then, but will reassess and see if it's best to sell, or hold for a little longer but have better systems in place for tenant screening.

@JD Martin your story is so inspiring, just listened to it. Thanks for showing me there's light at the end of the tunnel.