Today my wife and I went out shopping and on the way home we visited a possible lead. Once we stepped inside this apartment building we came face to face with one of the biggest side effects of being a real estate investor. Learning first hand how poorly some people treat their tenants and their property.
Where we live most the buildings are easily a century old so we are used to buildings in extreme distress. But this was the first one we had been in where it was not due to a hoarder, or an owner too poor to maintain their property. This was due to neglect by an owner, and their property manager. We found this lead through the town tax office. They provided me with a list of their most delinquent taxpayers. We ran the numbers, and figured the owner had made some mistakes in their budgeting. Now unlike some states New Hampshire doesn’t auction off tax liens. You get a few years to pay it off and then the town will start the process of seizing the property for sale. So when you find a lien has been placed on a property you know you don’t have to fight anyone at an auction to make a move on it. Just get in touch with the owner and work the magic there. Skip tracing failed so we figured we would stop by, knock on a door and find out who they pay their rent to.
As we walked up to one of the entrances I spotted it had a combination lock. “Whelp we aren’t going to make much progress today” I thought. The door wasn’t locked, none of the outer doors were. So much for that security feature. As we walked into the first entrance my wife and I were hit with the strong smell of cigar smoke mixed with unknown chemicals. The individual mailboxes were each a different kind and one was simply a cardboard box taped to the wall. We climbed the steep stairs to the third floor, taking notes of damages. Each floor had ceiling damage, closed off doorways where old halls or rooms once existed, missing lights in dark halls or at the top of staircases, or uneven floors. Some of the residents didn’t have bolt locks and had added padlocks to their doors so they could have some security. The most alarming thing for me was how the electrical system for the property had been updated. Outside each apartment were unsecured breaker boxes, with open access to flip the breakers.
On the third floor we finally knocked on a tenant’s door. We introduced ourselves and explained we want to invest in the property. The tenant sounded shocked that anyone would want to invest in the property. A moment later this tenant shocked me when he told me that it wasn’t the owner who managed the property, but a professional management company. My wife and I thanked him for the number to the management company and we left, descending back down the steep stairs and back out the unlocked door on the opposite side of the property. As we climbed back into our car to leave, a young couple with their toddler came out from the building. The young man waved at me, maybe out of courtesy , maybe because we were parked in limited tenant parking and he thought we were his neighbors. As we sat there my wife put the experience into the perfect words. “That was sad”
