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Updated about 2 hours ago on . Most recent reply
Avoid Revolution Properties LLC at all costs
When I acquired a 6 unit property in Hartford, CT in 2022, the neighborhood appeared as just working class. Soon after, the neighborhood went from class C to class F. I stuck with the same PM, owned by Tom Kopchick, because they knew the building and neighborhood quite well. Unfortunately, things went South really fast. I thought, let me evict the non-paying tenants and replace them with paying ones. Well this was like pulling teeth. Units were not flipped because the PM blamed it on the bad neighborhood and said that govt programs were the way to go if I wanted a consistent rent roll. He never told me that it would take several months to get funds from these entities. I ended up with 4 empty units and 2 paying tenants, then only 1 paying tenant. I still paid the mortgage on time, but was a struggle at times borrowing money from friends and family just to do so. A veteran was finally put in one of the units (the one paying tenant), however, the PM failed to tell him to open his own electricity acct and after 6 months, ended up with over $2000 of charges under my LLC. When I went by the building one day, they refused to let me into another vacant unit because they said once a govt program takes over while they find a tenant, I as the owner cannot have access to it. This unit ended up costing my LLC over $1800 in electricity charges when it was supposed to be vacant. The electricity shot up to over 3000 kw over the winter prompting me to think they had a grow house in there or a squatter the PM was collecting rent from himself.
In a neighborhood like this, you need a very competent PM. Instead, I ended up with the worst and most incompetent in the state, if not the whole country. They never got back to me on anything. It was, "yeah I'll take care of it" and I'd never hear from them again. Some of the problems were not taken care of at all. Homeless people were shacking up in the basement and breaking windows on the ground level trying to get inside one of the units. The PM had a manager who stuck her "friend" in one of the units prior to my acquisition and because they had a fall out, she stopped paying rent so I got no revenue from that unit for 7 months. The PM was horrible at trying to evict her and she finally abandoned the place, costing me over $9000 in lost revenue. When I attempted to replace them with another PM, Tom begged me to keep him on. Like an idiot and a firm believer that everybody deserves a second chance, I proceeded to continue on with them. Huge mistake. Things got much worse. He deliberately used a plow to destroy my driveway when there was snow, prompting my insurance company to come after me. In the two estimates I got to repave the driveway which were around $7000, Tom wanted 15K for it. It seemed to me that things were broken so they can make money off of the repairs. A PM could easily get away with this. There was a leak in the skylight above the inside hallway and they implied that I needed to redo the entire roof because of that one leak. That would've cost me over 20K.
In trying to get another PM to come on board which none would touch with a 10 foot pole and my hemorrhaging money left and right, I decided to put it on the market. Tom the PM got upset because he wanted to sell it for me, but I told him that if he was inept as a PM, what made him think he would be great at selling my building? All reviews of this PM on the internet are all horrible. Goes to show you that before you contemplate hiring a PM, ALWAYS check their reviews first. Most lie through their teeth. Additionally, he never charged me a "percentage" of the rent roll as stated in the agreement. It was always a flat fee of over $600 whether I had 4 tenants or 1. With the appreciation, I didn't lose as much money as I thought, but had I held onto it, I would've gone bankrupt and had the building go into foreclosure, all because of their incompetence. Again, I tried my best to find another PM, but there were no takers. It's PMs like these that ruin the reputation for the others. I truly believe that they can steal from under you and get away with it. Even the REIA in CT was of no help. An entity that supposedly "helps" investors, but said nothing on how to avoid bad PMs. Besides them, I contacted the AG of CT, the mayor and an attorney to see about suing them. I got no help whatsoever. The state literally has enablers that allow rogue PMs to get away with a lot and I'm sure this is like this across the country. The Dept of Consumer Protection was a joke and was of no help either. Everyone assumes landlords have bottomless pockets so they don't really care about them. I sought advice on Biggerpockets, only to get berated and spoken condescendingly by other investors. It's as if I was supposed to have a crystal ball and why didn't I do this or that. Were they successful on their FIRST INVESTMENT? Crickets. It was more like "look at me, everything I touch turns to gold". Yeah right. Now, I'm focused on fixing and flipping. An endeavor I look forward to, as I refuse to get discouraged in my real estate journey.
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It wasn't overnight. According to the PM, the city was making efforts to clean up the streets around my neighborhood. When they got to my street, they stopped. Funds may have run out. Police force reduced. I don't know. Hartford has pockets of bad areas. My street had a crack house across the street and a brothel a few doors down. You cross the avenue onto the other block and it turns nice. This wasn't anything I could control
Now look at what you wrote. There was a crack house across the street. C NEIGHBORHOODS DO NOT HAVE CRACK HOUSES!!! Then you say there’s a brothel a few doors down. Most C neighborhoods don’t have brothels, and if they do, they are discrete and the girls are pretty.
Bottom line: You bought into an F neighborhood, not a C neighborhood. It remains an F. Whoever sold to you unloaded a bag of s**t on you. I have to question your mental acuity first, though. How could you think that a neighborhood wits crack house was class C?
Your ignorance is so typical of what exists in this industry. Are you from Hartford? Do you make assumptions on places and base them on where you live? Are you saying that I'm a liar and that when I bought the place the crack house and brothel were already there?? No they weren't, because I didn't see them when I inspected the neighborhood. They get chased out from other neighborhoods, but it seems you lack the basic common sense to realize that. Why can't you accept the fact that they MAY HAVE come after I bought the building? Is that not possible to you? Cities run out funds all the time. They allow their neighborhoods to tank because their focus is on more upscale areas that pay higher taxes. Were you perfect in your first investment? Does everything you touch turn to gold? How many mirrors do you own? Just wait when Karma catches up to you sir. Good luck is like bad luck. It has a beginning, middle and end. I'd have to question your mental acuity too and wonder how you speak to your wife or kids like you do to other investors here. Get a life instead of harassing other investors from behind a keyboard.
Knock off the histrionics about lying. You made a serious error in judgement. Once the real, initial condition of the neighborhood is accounted for, what does that tell you about the performance of the property manager?
I simply pointed out that your analysis was wrong: neighborhoods don’t decline that fast. The fact that the city ran out of money may mean that a neighborhood doesn’t improve, but it doesn’t crater a neighborhood two levels “soon.” The simplest explanation is that you missed your analysis of the neighborhood because you were too eager to get into the game.
I sold my first investment 8 years after buying it, doubling the purchase price and making multiples of my investment. I had good tenants and house hacked. I spent a lot of time checking out the neighborhood before I bought.
Oh, and it had a finished basement.
So you succeeded in your first investment. Not everyone does. The difference between you and I, is that I'm not afraid to share my nightmare on Biggerpockets, because I learn from other investors that are respectful and don't need to berate me. I deal with reality instead of tooting my own horn so that everyone can see what a wonderful and successful person I am. Everyone makes mistakes, but at least I own mine. So you've never made a mistake in RE in your life. Woopee!! Maybe RE isn't for me, but I'm not about to let someone's pessimism get in the way as if that's a reason to give up. RE is different for everyone. Experiences are different and cities are different, but I'm sure you're old enough to know that. So YOU"RE WRONG about Hartford, some neighborhoods do decline quickly there. You're just comparing the areas you have your investments to Hartford, CT, which is seems ignorant to me. Ask anyone who knows that city and they'll tell you the pockets that can change a neighborhood from C to D to F, just by going to the next block. I got knocked down and now I'm getting back up. That's all. I now know which questions to ask, which areas to stay away from. Mistakes are to be learned from, so save your arrogance for someone else please. You'll fail big time one of these days. Trust me.
Paving what street? Do you even bother to read my posts? I never said anything about paving a street. Are you proud of your ignorance? We need to speak to each other like adults, not like high school kids, which means face to face. The PM, if competent, could've turned that building around because they knew that building and neighborhood like the back of their hand. Yes, I absolutely made mistakes with this investment, but if you were able to be successful despite your negativity and pessimism, well then so can I. You're a walking example. Don't hold your breath with your good luck and fortune, because things can come crashing down like you've never seen. What makes you any different? Where are you located? It would be better to continue this conversation in person instead of from behind a keyboard like a coward don't you think? I'm pretty sure you wouldn't use that tone with me in person. Most cowards wouldn't.
this is sad.. !! Everyone makes a mistake in RE over time myself included..
not to make you feel any better but in the GFC I lost 90% of my net worth and that was an 8 figure sum. What I did not lose was my good standing with my commercial bankers and my know how. . Its taken me 15 years to get back to a happy place. My days of wanting to own a jet went right out the window in 08. :) hang in there.
- Jay Hinrichs
- Podcast Guest on Show #222
