BRRRR Unexpected Issues

[Adam Jason]

What are some unexpected issues you guys have come across in your investing either with tenants, property managers or contractors that you really wish you could have anticipated but that caught you off guard on a project?  Any uncommon unknowns we do not all always think about?

[Will Fraser]

Hi @Adam Jason, this is a fun question to think through. I look forward to seeing the rest of the lessons others have learned on this.

For me, the biggest thing I've learned that was a surprise is that, when buying portfolios, there is a direct correlation between the quality of the operator you are purchasing from and the quality of the product.  For example, I bought a package of homes from an older gentleman who was, for lack of more flowery language, a cheap shady dude.  You see it in every nook and cranny of the properties: from the maintenance that should have been done 10 years ago but was taped over to the tenants that NEVER should have been placed, it's everywhere.  

On the flipside of that is another package of properties purchased from an older gentleman who did things excellently.  He didn't spend extravagantly or jump every time a tenant clapped, but what I found is that things are largely the way they should be (minus the systemic degradation that happens over time with all properties) and the tenants are TOP NOTCH, because the operator was top notch.

I wish I would have understood this earlier, because it is a great thing to know in the underwriting process.