01 Nov Real Estate Investor Horror Stories
In the over 1,000 real estate transactions I’ve been a part of, I’ve seen some doozies. I want you to learn from the mistakes of others (including mine!) without having to pay the price that others paid.
I bought my first investment property sight unseen at an auction in 2004. It was a 5-unit apartment building in inner city Philadelphia. I wanted so badly to be a real estate investor that I kept raising my hand to bid on the property. After purchasing the building, I went inside to see what it was all about. Four of the five tenants did not pay me rent. The electrical system was comprised of old wires and fuses. The 50-year-old furnace didn’t work. Natural gas was leaking from a pipe that went to a single 40-gallon water heater, which was way too small to supply enough hot water to everyone. The roof leaked. A few weeks after buying the building, one of the tenants murdered another one of the tenants in the building. I had to testify at the murder trial. I did end up improving the building and getting new tenants in four of the units. I sold it three years later and learned a lot of lessons.
Many years ago, a business partner and I conducted a lease-purchase of some multi-unit apartment buildings. I noticed that all the entry doors to the apartments were thin, hollow-core interior doors. I told my business partner that someone could easily break in, and I stated that we should buy solid-core metal doors for each unit. He didn’t want to pay the money, and we argued intensely over it. Sadly, I capitulated and hoped that no one would figure out how thin these doors were. Well, one weekend an angry former tenant drove a box truck to the building. He smashed in the doors for each vacant unit, and he wheeled out every appliance. He then stuffed tennis balls down some toilets and ran the water. The building flooded. While insurance helped somewhat, the process was exhausting. We gave the building back to the landlord-seller, forfeiting a $150,000 deposit.
What’s your real estate horror story? I’d love to hear it. While the story may not have a happy beginning, I hope it has a happy ending.
Tai DeSa is a graduate of The Wharton School of the University of Pennsylvania. He became a full-time real estate investor in 2004 after serving in the U.S. Navy. Tai made colossal mistakes in investing (and learned some things along the way). Tai has coached hundreds of entrepreneurs, real estate investors, and real estate agents on how to increase their income and net worth. He has helped hundreds of homeowners avoid foreclosure through successful short sales. Check out Tai’s books on Amazon.com. Tai may be available for coaching and speaking engagements on a variety of real estate topics. Send an email to tai@investandtransform.com.
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