TLDR: "Great Deal" was a money pit ... an absolute nightmare. Almost every problem you can think of happened.....
So there I was, a seasoned real estate amateur. I say amateur, because although I have had multiple SFR rentals for nearly 15 years I was new to the multi-plexs and new to the area that I was buying. I also have just recently broken through having a dozen doors. The quad was about 4 hours drive from my residence.
So my bird-dog wholesaler (good dude) who has given me some great deals in the past, finds a rundown quadplex in the South. It was priced at $105K.... in fair/poor condition... it was still an amazing deal. I was seeing similar properties in the area $300-$400K. I paid cash, because it was going to move fast... so I thought.
1. First Issue, three vacancies. So I started $60k in renovations to boost rents. Had first GC walkout on it midway.... not fun. Had to have another come finish the three units but more $$$. The other unit was occupied and she refused to leave or move to other unit. She had a valid lease and was on time. So it remained as is. Hired a property management company.
2. Septic. PM said septic issues and hired had a guy quote me some ridiculous number like $50k, said they were collapsed, but they weren't. I found another company and Paid $1200 for cleanout from another guy.
3. Upper Unit got broken in and they stole the new hotwater heater, new appliances, and air conditioner..... damage flooded upstairs and downstairs units.
4. Got new renter, but the 2nd contractor cut some corners, took about $10k to finish it and the others. So now 2 renters. And got the upper/lower water damage fixed and repaired. Good Renters hard to find in this neighborhood.
5. The same upper unit got broken into again, and I get a squatter. There is no power to the unit. Squatter crawls through the attic to hook up to my new tenants' branch line. Obviously didn't work well as it blew the panel and almost started a fire.
6. Hired a electrician (top of google page) who said the whole building was out of code and needed to be rewired at $18k/unit. I told him BS, but he called the electric company to have the power cut for "safety reasons" without asking on a Friday Afternoon. Power company would not turn on without certification from an electrician... of course it was Friday. Found out later, he was technician with not even a year of OJT. Got my electrician from about 3 hours drive to go over and fix everything in the entire building for $7k and had the electric turned back on.... (that week took about 5 years off the end of my life in stress). Electrician was a buddy who scared the squatter enough that he left and never came back.
7. Get a call that the lower empty unit had been crowbarred open and A/C (window units) and appliances stolen... but they left the Hotwater heater and only damaged the door. Buy a new A/C, but wrong plug. Have Lowe's replace it with the right one, but it was stolen since it was left on a porch. Finally the third A/c was right and installed. PM was to blame for the A/C unit fiasco.
8. PM drops me because the property is a pain. Get a new PM. Old PM will not give back escrow deposits until I threaten them from my RE lawyer.
9. Incumbent tenant catches kitchen on fire. She did pay for some of the damage and insurance covered some as well less the deductible which the tenant paid. Lucky that it was localized to the kitchen and one external wall.
10. Found a good stormdoor guy who was a handyman. He secured all four doors with heavy deadbolt storm doors and fixed a hole in the roof. I should have started with him, if I knew about him.
11. Drug dealers start camping in the backyard (kept using extension cords and water from my units). Had the cops come about 12 times... then had the stormdoor guy build a fence and post no trespassing, so they went somewhere else.
11. Got fed up with the property and listed it for sale under market value $180k. Got a bid and went with it. Guy was getting a hard money loan for property and construction (don't know the details of the loan) only that the bid was accepted in FEB and the lender totally dragged his feet until it finally closed in August. Even though I listed it as-is... we had so many inspections it was truly mindboggling. My realtor was super patient with me and was super professional though he probably ended up making $1.50/hour with all the hours and phone calls he had to make to close the deal. Oh and the original Incumbent tenant dies of natural causes in the unit one month prior to closing in June which delayed it again.
Needless to say... I now have some unintended seasoned experience and lessons in a manner that I did not expect or want. I did walk away basically breaking even (probably out a few grand, but not losing my shirt) and with a much better respect and eye for a "great deal." More things happened than what was listed above, but I think my mind has blocked them out to protect my sanity. Be careful out there folks.
That said, I cannot say enough good things about rental properties overall. They have helped my parents retire comfortably, paid my kids way through college and been a great way to store and build wealth.
