How a 3-Year Real Estate Nightmare Turned into a $300k Profit

[Jeremy Beland]

In August 2020, I took on what seemed like a great deal—a three-family property in Manchester. The seller was a terminally ill man who needed cash quickly to support his family before he passed. The lead came through one of our absentee equity mailing lists, and after meeting with him, we locked up the deal. At the time, the price was a bit high for us, but I was eager to take another property down for myself after years of wholesaling for other investors. With private lending secured, I bought the property, excited to add another rental to my portfolio.

What I didn’t expect was just how much of a nightmare this property would turn into.

After closing, we began the renovation. The house needed more work than I initially thought—especially when we discovered the entire plumbing system had to be replaced from top to bottom. Once the renovation was complete, I started searching for a property management company, as I don’t manage my own properties. I vetted a few companies and hired one that seemed like the best fit.

This is where the real trouble began.

The first tenant they placed fell behind on rent by the second month. After a series of delays, they were eventually evicted. The second tenant wasn’t any better. Within two months, they were causing disturbances, fighting with neighbors, and creating an unsafe environment for other tenants. Another eviction followed. The third tenant just disappeared one day, leaving all their belongings behind and causing more headaches.

At this point, I had already gone through two evictions and was starting to lose faith in the property manager. So, I switched to a second company. Unfortunately, this change didn’t help. It was around the time of COVID, making it incredibly hard to find reliable tenants. This new property management company was just as ineffective, and for nearly two years, I struggled with bad tenants, constant repairs, and growing losses. By the end of the second year, the property still wasn’t cash flowing, and the situation felt hopeless.

Finally, I decided to switch to a third property management company. This time, things started to improve. They found solid tenants and stabilized the property. But the damage was done—I had already gone through three management companies, three evictions, and a lot of lost rent and legal fees. It wasn’t until 2023 that the property finally began to cash flow.

Then came an opportunity to sell the property in August 2023. After everything I’d been through, I decided to sell. Despite all the headaches, I managed to sell it for a $300,000 profit.

So what did I learn? First, not all property management companies are created equal. No matter how well you vet them, sometimes you won’t know how good they are until it’s too late. Second, real estate can be incredibly forgiving, even when things go horribly wrong. I lost tens of thousands in missed rent, eviction fees, and attorney costs, but in the end, I still made a significant profit.

Would I do it again? Absolutely—but with better property management from the start. Real estate is a long game, and as this experience shows, persistence pays off, even when things don’t go according to plan.

[Drew Sygit]

@Jeremy Beland great it worked out for you!

Going to guess your PMC vetting didn't include asking questions about HOW they would execute their services.

Below is part of a standard copy & paste advice for those looking for a PMC. Curious as to how much of it applies to your situation? (so we can improve our advice!)

-------------------------------------------------------------------------------------------------------

Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator – so, they often select the first PMC they call or that calls them back!

So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.

EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!

This also leads owners to ASSUME simpler is better when it comes to management contracts.

The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!

A well written management contract should clearly spell out what is expected of both the PMC and the owner, to PROTECT both and avoid misunderstandings. Why do you think purchase contracts are so long and have such small print?

We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊