My 2 Real Estate Horror Stories

Since we are coming up on Halloween, I thought I would share two of my favorite real estate horror stories.  Now, I think different then the common person about when it comes to failures, road blocks, "horror stories" and hiccups.  I see them as often times, the only way we are able to reach the next level of success.  So with that said, please don't let any of these stories deter you from investing in real estate if you are new to it.

I was at the DMV the other day, which is a horror story in and of itself.  It took 4 hours to get in and out, and I've never seen a group of sorrier sadder people in my life then the people waiting in line at the DMV.  And I was the probably the sorriest and saddest cause my wife had me on this juice cleanse diet.  I thought to myself, "I bet there is a hell.  And I bet there is even a line to get in."  And then I thought to myself, "I bet hell IS the line to get in at the DMV".

But I digress... I ended up getting caught in a conversation with a 50 year old fisherman, who spelled of cigarettes and booze, and for whatever reason, he thought that I may be an authority on this topic.  He asked me, "Where can a 50 year old man like me go to get a date around here?"

I don't have 0 experience in 50 year old love connections, but I am a really good real estate marketer.  So I said to him, "Well, as a fisherman, you need to go where all the fish are hanging out.  Where the tide goes in or out.  Around the reefs.  So think of the kind of lady you would like to date...Where are they all hanging out?"

Without cracking a smile, so I think he was serious, he says, "Drug court".  I laughed and suggested Church.  At any rate, real estate is the same thing, except the motivated seller is the fish.  There are many techniques to finding motivated sellers, but one of the best ways is by pulling up the lists of people who have been served public notice that their house is going to go to the foreclosure auction.  These are called "pre-foreclosures".

Most of my "horror stories", which have all been the most exciting part of my real estate adventures come from printing out lists of people going through pre-foreclosure and visiting them at their house. Here is the first one:

The Tale Of the Car That Wouldn't Start

I visited a lady's house the day of the auction because I wasn't able to get to it earlier.  It was a nice house, and definitely one that I would bid on.  But I had made myself a rule that I wouldn't buy a house with someone living in it, cause I didn't want to be "that guy" who kicks people out of their house.  Regardless, I knocked on the door.

After a pretty amiable discussion, we concluded that she knew she had to get out of the house and just needed some time to find another place, and that if I won the house at the sale, we could work something out.  I also got to see the inside of the house which helped me determine any renovations I would need to consider before bidding.  So far, it seemed like a potentially winning situation.

Well, we ended up winning the house at auction and I met her at a coffee shop to discuss the exit strategy.  She asked for a month to get her things out.  No problem.  The house rents for $2000 but we told her she only had to pay $500 to give her some cash to get into an apartment.  She was happy and agreed.  She signed the agreement, and then before leaving......she asked me to blow in the breathalyzer of her car so that it would start.

Turns out she was a raging alcoholic.  Not only that, but her check bounced, and it took 3 months to finally get her out of the house.

LESSON LEARNED: Don't buy a house from a motivated seller and then agree to let them stay for any period of time.  If they aren't paying their mortgage, it's for a reason, and they certainly aren't going to pay you.

The Tale of the Samurai Sword

The next story came about when visited a home that was 3 months out from foreclosure.  Upon approaching the residents of the home, we learned that they were renting from an older ex military gentleman who lived in a boat down by the river.  They were actually screwing him on rent, and hadn't paid him in 9 months or so.

We got his information, called him, and agreed to meet him on his boat.  Upon entering his boat, I started to get worried.  Decorated on the walls of the boat were all kinds of weapons.  He had a samurai sword above the window, antique guns, and other various weaponry.  My tip off that he wasn't "all there" was that on a huge 50 inch screen he was playing the movie "The Matrix" in slow motion, and he said it helped calm him down.

So, whatever, I just wanted to make him an offer and get out.  We made him a subject to offer that would have really helped him out.  We would kick out the dead beat tenants, fix up the property, take over his mortgage payments in his name and pay his back payments so his credit would improve, and give him a little extra cash as well.

He started pacing back and forth, literally sweating bullets.  He shouted angrily at me.  Then he thanked me.  Then he turned around and starting talking to his Samurai sword. Then he turned back to me and accepted the offer.  I shook his hand and got the heck out of their while looking over my shoulder to make sure he wasn't going to come at me with the samurai sword.

LESSON LEARNED: If their is an absentee owner, I always meet them at a neutral location, like a coffee shop.  AND Matrix in slow motion is a dead giveaway for mental instability. Get out!

But above all lessons and takeaways you can learn from horror stories, the biggest one is this: Get out and do it!  It's an adventure that you won't regret!

What are your horror stories and lessons learned?