TENANTS FROM HELL #1 Deplorable living conditions. PICS INCLUDED!

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James-- great job with the renovations.  Maybe I am weird, but I get a great sense of accomplishment from turning a sad place into a bright, clean, attractive space.

Did the renovations take care of the bedbugs or did you have to do a special treatment?

Originally posted by @Bettina F. :

James-- great job with the renovations.  Maybe I am weird, but I get a great sense of accomplishment from turning a sad place into a bright, clean, attractive space.

Did the renovations take care of the bedbugs or did you have to do a special treatment?

 After you get the junk & filth cleaned out you need to do several bug treatments to kill them all. Not the hardest thing in the world but a serious infestation like that is going to cost well above $1k & take multiple treatments to completely eliminate them all.

@James Wise Thanks for posting this. I work in the same industry and we see these types of situations 1-2 times each year and even worse. When I first started investing (not real estate, forex actually) I remember reading a book on the difference between the institutional investor vs the retail investor. The retail investor makes decisions based on rewards. Wholesalers know this and prey on people who get suckered in on an unrealistic proformas and deceptive marketing tactics. Then the new investor over pays for a bad home in a horrible location because the numbers look like a 25% ROI. They don't understand the risks involved. I do have a couple of local clients who purchase the C-D Class properties and do ok, but it's not all that passive of an income. They are almost as involved with the management as we are, the management company that they hired.

In contrast, professional investors evaluate opportunities based on the liabilities and learn to manage those risks. If you are in the game long enough... there will always be a bump in the road, even in the most exclusive locations, greatest homes, and best tenants... but some areas, homes, and tenants are always going to be problematic. I always try to steer my clients and prospective clients away from those problematic areas and homes when possible and will even turn away the worst of homes.

Second is tenant screening. When you can identify potential risk factors and screen them out, you can eliminate a large amount of problems. I am certain that your company adequately screens, and as I mentioned before... if you stay in the game long enough, you will always hit a bump in the road regardless of screening too.

I like that @Matthew Paul  mentioned inspections. While I think that Bi-monthly may be a little excessive, we do our every 3 months and we have clients who want us to waive them or only do them once or twice annually. Of course we are willing to do that, but many times after the unauthorized pit bull that we didn't know was there for a year finishes destroying the home, they realize that they could have saved thousands of dollars by being more proactive and controlling potential liabilities.

Point of the matter is this. We all love the success stories and I love that BP is a great place to learn and network, but new investors need to understand the potential to get taken advantage of and realistically lose everything if you do not take heed to these types of possibilities and work with the right teams.

Oh, my. Definitely an eye opener for someone like me who hasn't had that kind of experience (yet). I appreciate you sharing this with other investors and giving us insight to what the ugly can look like.

@James Wise Thank you for pulling back the curtain! I'm a total newbie and these photos disturbing to say the least, but I get the feeling that this is par for the course and nothing to be afraid of. I do have a question...... What's the turn around time and cost to get a unit like this rent ready again, and are these costs transferred to the landlord or absorbed in the PM fee?

Originally posted by @Ciera W. :

@James Wise Thank you for pulling back the curtain! I'm a total newbie and these photos disturbing to say the least, but I get the feeling that this is par for the course and nothing to be afraid of. I do have a question...... What's the turn around time and cost to get a unit like this rent ready again, and are these costs transferred to the landlord or absorbed in the PM fee?

 That unit was probably in the $4k-$6k range. The PM fee for a property like this is around $100 per month for a property like that. As such 100% of those costs are paid by the owner. If it were any other way there would be no PM companies in business. Remember your PM is providing you a service. You will be paying for everything that they do. Just like you pay for cable, internet, netflix etc...

Thank you for the speedy response. These posts really help. I actually stumbled across this while searching for suggestions regarding the amount of reserves an investor should hold "just in case" outside of CapEx, vacancy etc. I never would have thought unit turn around costs could be in the $4K-$6K range. This post and BP in general is a treasure chest of information.

Thanks again!

I'm beginning to think that being a parole officer for the last 12 years is indirectly great preparation for being a landlord, after all many times you are walking into the worst of the worst living situations.  About the worst I've seen was an offender (rented second floor duplex) allow her three rottweilers to use one bedroom as an outhouse with no attempt to clean up.  The cops I was with told me it was the first time they actually saw someone "turn green" (me) and the kicker is the landlord was absentee and had no idea what was going on.   And don't get me started on how every time I'm in the elevator in public housing I have to step over the puddle of urine and hold my breath for 19 floors.  It's truly incredible how people live and how they have no regard for themselves and certainly not for property they live in.

Originally posted by @Ryan L. :

I'm beginning to think that being a parole officer for the last 12 years is indirectly great preparation for being a landlord, after all many times you are walking into the worst of the worst living situations.  About the worst I've seen was an offender (rented second floor duplex) allow her three rottweilers to use one bedroom as an outhouse with no attempt to clean up.  The cops I was with told me it was the first time they actually saw someone "turn green" (me) and the kicker is the landlord was absentee and had no idea what was going on.   And don't get me started on how every time I'm in the elevator in public housing I have to step over the puddle of urine and hold my breath for 19 floors.  It's truly incredible how people live and how they have no regard for themselves and certainly not for property they live in.

 A bedroom as the bathroom, that's rough. Most of the time they just let the dogs use the porch.

Originally posted by @Steve Hodgdon :

Tenants always look like the property. Want better tenants? Own better properties.

 Absolutely. While it's possible to get a bad tenant in any property they are much more prevalent the lower the asset class. Often I get clients who think i'm speaking another language when I tell them to buy the $80,000 duplex that rents for $1,500/mo instead of the $40,000 tri plex that rents for $1,500/mo.

Originally posted by @Janine Covello :

Wow. This is pretty eye opening but as I go and look at more "fixer uppers" I am actually pretty surprised to see the conditions that some people choose to live. Combination of gross and also sad.

I am starting to see a correlation however between people who don't put a sheet on their bed...and the state of the unit following the individual who is sleeping without any sheets.  

 No sheet on bed & or a mattress on floor usually tells you you've got a savage on your hands. Not always, but usually.

Originally posted by @Ryan L. :

I'm beginning to think that being a parole officer for the last 12 years is indirectly great preparation for being a landlord, after all many times you are walking into the worst of the worst living situations. 

Probably the best training you can get. 

Originally posted by @James Wise :
Originally posted by @Steve Hodgdon:

Tenants always look like the property. Want better tenants? Own better properties.

 Absolutely. While it's possible to get a bad tenant in any property they are much more prevalent the lower the asset class. Often I get clients who think i'm speaking another language when I tell them to buy the $80,000 duplex that rents for $1,500/mo instead of the $40,000 tri plex that rents for $1,500/mo.

 Yes, but the proforma provided by the wholesaler/realtor/seller makes the triplex look amazing. A make ready of $4k-$6k actually sounds pretty reasonable. The worst that I've seen was about $11k, but that was on a larger home and the tenants had lived there for 4 years so some of it was normal wear and tear and updates.

Originally posted by @Mindy Jensen :
Originally posted by @Ryan L.:

I'm beginning to think that being a parole officer for the last 12 years is indirectly great preparation for being a landlord, after all many times you are walking into the worst of the worst living situations. 

Probably the best training you can get. 

 🤣🤣🤣🤣🔥

Originally posted by @Ross Denman :
Originally posted by @James Wise:
Originally posted by @Steve Hodgdon:

Tenants always look like the property. Want better tenants? Own better properties.

 Absolutely. While it's possible to get a bad tenant in any property they are much more prevalent the lower the asset class. Often I get clients who think i'm speaking another language when I tell them to buy the $80,000 duplex that rents for $1,500/mo instead of the $40,000 tri plex that rents for $1,500/mo.

 Yes, but the proforma provided by the wholesaler/realtor/seller makes the triplex look amazing. A make ready of $4k-$6k actually sounds pretty reasonable. The worst that I've seen was about $11k, but that was on a larger home and the tenants had lived there for 4 years so some of it was normal wear and tear and updates.

 nahhhh, That excuse isn't gonna cut it with me. I put out tons of content explaining the risks associated with lower class properties. This thread is just 1 example of the many pieces I have put out through various media talking about this type of stuff.

It's common sense really. If the rent is the same why would the property be half as much? To account for the additional risk of course.

Yeah I tried residential long ago and didn't like it. Some of my friends do well with it though.

Worst tenant I ever saw was an inherited tenant. Kept saying kids were not feeling well so would not let inspector in.

After property is purchased tenants were at end of the eviction process. The front door opens and place is vacant. Waterfall of roaches comes pouring down from front door onto sidewalk. Could not even go inside. Pest control comes out and wears hazmat suits and films a video for future company training.

Over 5 months population had to be knocked down with multiple treatments a week just to get into cleanable shape. This was in a multi unit residential property. 

Being a residential landlord is not for everyone. An investor might want to look at just buying one to dip the toe in the water before going ( all in ) and find out it is not what they thought it would be.   

Originally posted by @Joel Owens :

Yeah I tried residential long ago and didn't like it. Some of my friends do well with it though.

Worst tenant I ever saw was an inherited tenant. Kept saying kids were not feeling well so would not let inspector in.

After property is purchased tenants were at end of the eviction process. The front door opens and place is vacant. Waterfall of roaches comes pouring down from front door onto sidewalk. Could not even go inside. Pest control comes out and wears hazmat suits and films a video for future company training.

Over 5 months population had to be knocked down with multiple treatments a week just to get into cleanable shape. This was in a multi unit residential property. 

Being a residential landlord is not for everyone. An investor might want to look at just buying one to dip the toe in the water before going ( all in ) and find out it is not what they thought it would be.   

Tenants from hell really do love them some bugs!

.

Rent one of those carpet shampooers at the grocery store and get some Windex. It will clean right up!

Imagine that James amplified by the thousands crawling on the walls,,ceilings,counter etc. The big ones in size.

Big company said they had never seem anything like it.

At least with commercial tenants I know most of them want to keep the places clean because people can see in from the road and walk into the retail businesses.

It's not fool proof but the percentages are in my favor. 

Thanks James, the newbies need to see that. My response though was "Meh" you just can't convey the whole impact without the smell.

I had a residential appraisal business in the Cleveland Metro area for a decade and survived the foreclosure crisis doing foreclosures. If you get there before the trash out crew, lots of them looked like this. Out in the suburbs too, not just in the inner city.

Originally posted by @Joel Owens :

Imagine that James amplified by the thousands crawling on the walls,,ceilings,counter etc. The big ones in size.

Big company said they had never seem anything like it.

At least with commercial tenants I know most of them want to keep the places clean because people can see in from the road and walk into the retail businesses.

It's not fool proof but the percentages are in my favor. 

 lol, I have 1,000's of tenants. I don't have to imagine it. I've seen it all. I've literally got 100's of these tenants from hell photos on my cloud. I'm gonna be launching one of these threads every couple weeks. Some real doozies coming up. I'm debating on going with my collage of toilets from hell or my tubs from hell. I may even switch things up & go with the mini van that exploded in one of my garages. Who know's, choices.

Originally posted by @Anish Tolia :
Originally posted by @James Wise:

Do you really believe that people living like this can blame anyone but themselves?

Actually yes. If you work a minimum wage job your whole life and pay 50% of that small income in rent, struggle for food, one illness makes you homeless do you think you would maintain the hygine standards you do now? Of course there is some personal choices here. But our economy and society is making more and more people desperate. And we will continue to see more and more of this.

 I've worked a 11/hr job and supported myself in the bay area, actually it was 3 jobs and 7 days a week. It was terrible and nearly destroyed me, but never not once did I let my rental ever get anywhere near this. Did I skip out on some loads of laundry sure, dirty dishes that say far to long yes, mold in the shower yea that happened, but again that was a FAR FAR FAR cry from what was pictured. 

@James Wise awesome that you're showing the dark side of owning property out there. A lot of folks only see the returns and don't take into account all the risks and headaches with the lower asset classes. I'm not naive to the fact that I'm doing the textbook version of what not to do as a new investor by buying properties across the country in a lower end market. But I'm also well aware of the risks and I'm prepared (at least I think) to handle them. I likely wouldn't do what I'm doing if I wasn't able to get on a plane any minute and go straighten things out over there as needed. and I keep plenty of cash on hand to deal with the unexpected eviction, sewer backup, and blown furnace that I know I'll have to deal with some day. The midwest isn't definitely isn't for the faint of heart! 

Actually looked better than most of the foreclosures I buy

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