I'll try to keep brief, looking for anyone who has gone through this even on a small level and what their path was.

First time out of state investor, BRRRR'd a property in Memphis (B- area) finished in May 2024. Bought house and did $30k rehab (down to studs) with one company and also agreed to do first year PM with them. Long story short, PM communication non-existent, currently owed 3.5 months missing rent (We have received rent payments but NEVER without hounding them) and overall have been provided no awareness of the property status. First tenant supposedly moved out in May 2025 and I saw a couple pics on Zillow of the property (1 year since full rehab) and the place looked beat up. Since I cannot ever get any reply from them and needed this place rented, I switched PMs.

New PM's first visit to the property they share shocking photos/video that the house is trashed and gutted; ALL cabinets, toilets, furnace, ac unit, furnace, shower heads, gas meter (Apparently removed because of non payment and possible detection of gas leak) ...GONE. Evidence that repairs that were in the rehab contract were not done (hole in new flooring revealed rotted joists that were to be replaced.) $20k estimate in repairs and replacement.

I was never notified by the old PM as to any of this, I have no idea how long the property has been like this, I have a tenant contract from the PM but I don't even trust that. The theories I've considered 1.) The full rehab was never really done or not to contract (It was appraised and inspected during the refi so...)  2.) The company did not pay the vendors from our draws during rehab and the Contractors came and took materials back for no payment? (Both doors have evidence of being forced open and then re-secured) 3.) Vandalism and theft (Why was I not then notified by the PM?)

I also have another BRRRR with this company that is now 4 months behind schedule and I can get absolutely no replies on its status. I'm financially invested but this massive red flag is making me consider my exit strategy.

At this point for the first property I'm filing a complaint with TREC, new PM is helping file a police report, calling my insurance, going to most likely have to lawyer up and I have to move forward with repairs as I need the property rented ASAP. I'm also having the new PM check on the 2nd property under rehab but at this point I'm not sure it even exists:)

Has anyone experienced this? Is this a massive scam in Memphis or just a horrible company? I have to think the old PM has to have some accountability or liability in this? 

I'm committed to real estate investing, but this is a scenario I could never have imagined and I'm looking for any wisdom or guidance.