On this week’s podcast, Dr. Matt Motil discusses the horror stories that can happen in real estate investing. Real estate investing has been proven to help anyone gain wealth and financial freedom, but it’s not easy and all sunshine.
When people are real estate investing beginners, most just assume its an easy invest and there’s appreciation and you get passive income. The truth is that real estate investing has a lot of human involvement and has risks as far as the humans are concerned. Some tenants are good and some terrible. Some property managers are amazing and some do the bare minimum. Despite all these things, real estate investing is still a great investment and an amazing way to build wealth.
This week Dr. Matt, in the spirit of Halloween, talks about some infamous real estate investing stories. You will hear of the mistakes and crazy things that can happen when you are on your way to financial freedom.
Spooky Story #1
My friend closed on a property that was empty and set up a property manager for it. The house sat vacant for a couple weeks before the property manager went over to change the locks and everything. When the manager gets there, he sees that there are tenants in the duplex. The property manager tells the tenants that they are there illegally and the tenants tell him this:
The tenants had a lease, but it was with a fraud who claimed he was the property manager for the duplex. The fraud moves people into this property and gets their first month’s rent and security deposit. It was quite the elaborate scheme. The tenants filled out applications and filled out questionnaires and were given the keys to the place. The fraud broke in, changed the locks, and then advertised the place for rent on craigslist.
Spooky Story #2
We bought a triplex a few months ago and planned on wholesaling it. Wholesaling is when I double close on a property. I buy the deal and then I planned on turning around and selling it for a higher price. I had to evict 2 of the 3 tenants in the first couple of months of owning it.
The universe knows when you’re going to do something fun and have something good come your way and sometimes it really wants to put a dent in that. So while I am on a mini vacation in Arizona, I get a text from the tenant saying she had no heat and couldn’t get into the basement. Ohio will do a seasonal turn on for things like gas-fueled heat. I called the contractor to check the gas line. The tenant starts threatening to call the news and whoever else to make it look like I am denying her the right to heat. I had my handyman go out and buy some space heaters and take them over to the tenant to use until the contractor can fix the line to get the heat going.
A few months later, the gas is shut off because they aren’t paying the gas bill. One of the other tenants called me and told me she thought someone was in the basement. The tenant who complained about the lack of gas had a relative that broke into the basement, stole the copper water pipes from the unit and shut off their water line. We had to take this tenant to eviction court for all the damages to the unit, the basement, and all the back rent she owed.
Listen, all these things I had to deal with could have been avoided if I hired a property management company. Dealing with the tenants was a waste of my time and an annoyance I could have easily passed off to the management company. I cannot stress getting a property management company to handle your rental properties.
If you can read/hear these horror stories and think that real estate investing is still for you, congrats! I highly recommend using real estate investing to build your wealth. Making money takes effort, but real estate investing can be started with little money.
If you love the returns of real estate investing, but don’t want to deal with any people, you have the option to be the bank. You can be part of a trust or a fund. Right now, I have a fund set up for accredited investors with over $5 million in assets. The fund has preferred interest and 70% profit sharing. Visit me at investwithdrmatt.com to find out if you have the opportunity to invest with us.
Subscribe To The Cash Flow King Podcast
Never miss an episode of the REALEST Real Estate Podcast on the web. Subscribe where you like to listen.
It would be awesome if you could take a few moments from your day and write a review for “The Cash Flow King” on iTunes by clicking here.
Get Yourself A Free Copy Of Man On Fire Book
Get a FREE copy of my best-selling book “Man On Fire” Lessons From A Perpetual Burnout For Creating Alignment For Success. Click Here.
Listen To The Cash Flow King Podcast On YouTube:
If you love this content and want to see more, check out our other show notes from previous episodes. You can also catch me on Twitter at @CFKingPodcast , Facebook at Cash Flow King Podcast, or Instagram at @cashflowkingpodcast. Feel free to use any of the socials to ask me questions!