In light of Halloween coming up soon, this week I wanted to have a little fun and share with you some real estate “horror” stories from my experience as an investor!
A lot of people spend time talking about the glam, the money, and all the positive sides of this business, but they don’t share the things that can go wrong (or weird).
Let’s have fun this week! In the comments section, share your craziest real estate horror story, and let’s see if we can make some BiggerPockets history. Who knows–maybe this could be the most-commented post of all time!
How I Bought, Rehabbed, Rented, Refinanced, and Repeated for 14 Rental Properties
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My Top 4 Most Shocking Real Estate Horror Stories
1. The “Ash” House
Typically, I tend to always look through houses before I close on them, but one time, there was a property I had gotten so cheap that I decided to buy it sight-unseen.
We purchased that property on a Monday and went to take a look at it for the first time on the following Wednesday. I had an assistant at the time, and together, we went to go scope out the property–and we found ourselves in a war zone.
This neighborhood was so terrible that you’d think we were in Detroit and not Indy. There were cars in yards, a bunch of trash, and crackheads EVERYWHERE! As we turned down the street toward the property, we notice that there was a house on the block that was completely torched to the ground. We could still smell the charred hint of smoke.
I turned to my assistant and said, “Wow, man! This neighborhood is horrible! I can’t believe my eyes. There is a house straight-up burnt down to the ground right next door to our property. No wonder we got this so cheap!”
We were close to our house now, so we began to look for it, and, well, we couldn’t find it. The numbers on the houses on the street seemed to skip, and it looked like our property just wasn’t there.
Then all of the sudden, it hit me.
“OH MY GOODNESS! THAT BURNT HOUSE IS MY HOUSE!”
I was blown away.
I immediately called the agent and said, “Hey, you didn’t tell me the house was burnt to the ground when I bought it. You showed me pictures of it and everything! What gives?”
The agent replied, “Well, last time I checked, it wasn’t burnt. Why don’t you call the fire department and see what they say?”
So I called the fire department, and they told us verbatim, “Oh yea, man. We know that house! It burnt to the ground LAST NIGHT!”
I lost it!
I bought the house on Monday, and it burnt to the ground on Tuesday. The worst part of it was that because the property was so cheap, and at the time my turnover was typically only a week or two, I didn’t bother to get insurance on it.
Lesson I learned: Even though a house is cheap, you might want to get some insurance on it, starting the day you buy it, no matter what!
2. The “Haunted” House
Back in the day, I used to buy a lot of properties off of the MLS, and there was this one particular property that was SUPER cheap. As we were going back and forth with the agent, I couldn’t piece together why it was so cheap. I mean, there was very minimal work that needed to be done, and it was a decent size, but they were selling it for pennies on the dollar.
It just didn’t add up.
After doing some due diligence, we also found out that this house was famous. It had been featured all over the news at some point, and apparently everyone knew about it except us. It was famous in a way, that, well, you don’t really want to be famous for: It was known for being the scene of a double homicide murder case!
So I had to think about it for a while, but ultimately, I didn’t want to buy a house that could possibly be “haunted.”
What about you guys? If you knew what had taken place in this house, would you have bought it?
3. The Fraud and the Injured Man
I had an out-of-state investor who wanted to buy a house in Indianapolis, where I would represent him as the agent, we’d hire a general contractor to do the rehab, and I’d keep an eye out on the property for him ongoing.
We hired a guy to do the work, and, well, the guy ended up being a fraud, and he took our money and skipped town.
The house was about 75% done, and we were pushed for time and needed the rehab to be completed. I knew a guy who mowed grass and did some basic handyman stuff, so I referred him to the investor to help finish up the project.
Now, I wasn’t present when this happened, but the handyman guy went to the property and brought a friend with him. While there, a garage door ended up falling on the friend’s leg and he ended up suing the homeowner–and me.
The lawsuits took about two and half years and many hours of my life. I had to go to court a lot, but in the end I was fortunate, and my insurance I had on another project ended up covering the bill.
What did I learn? Think twice about allowing anybody on your property who doesn’t have insurance!
4. The Poop House
Recently, we’ve purchased a house that needed some renovations. The property had been vacant for a long time, and there were noticeable signs that a squatter was living there.
On our initial walk-through, we saw beer cans, some used needles, used condoms, etc. scattered all over the place. Upon further inspection, we noticed some brown and black “strips” in the corners in most rooms of the house and realized the truth: The person who lived here decided to poop everywhere, except the bathroom!
Later on, we actually ran into the squatter (he wanted to get access to his bike that was still inside the house), and my property manager just had to ask the guy, “Hey, man. Why all the poop in the corners of the house, and no signs of it in the bathroom?”
And the guy told him point blank, “Oh, that’s easy, man! The bathroom is where we smoke, so we don’t want to stink up the place.”
He said it as if it had all the logic in the world!
So those are my top “horror” stories. Now I want to hear from you!
Let’s use this post as a gathering place for the craziest, weirdest and most horrifying stories that the BiggerPockets community has to offer. Ready? Go!
So, now it’s your turn to weigh in! Let us know about your most shocking real estate stories of all time.
Leave your comments below!