Rental property number 26 was bought right at the end of 2019. I knew it would have issues when I bought it and it has been entertaining to see how things worked for the previous owner. The property consists of three houses and a commercial building. The houses need work and were rented for way below market rent. The commercial building is not in too bad of shape and is in a decent location. In fact, the entire property is located on a 4 lane highway and is zoned for commercial use. The city will let the houses stay since they are grandfathered in but the property may have some big upside for development in the future.
I have no plans to develop it at the moment.
We were told that all the tenants were paying rent and we even received their deposits from the seller. However, when it came time for rent to show up, nothing was happening. I use property managers for my rentals after we get them stabilized and ready to lease, but I think I might have scared them away if I gave them this job, so Nikki and I have been working on it.
We left notices on all the properties except for the commercial shop to pay rent. The commercial shop called us and said they don't pay rent until the 22nd of every month.
I talked to the tenant of one house who said they don't pay rent. They have never paid rent and their grandpa had an agreement with the old owner because they were related somehow.
I talked to another tenant who also said they didn't pay rent and asked how much the rent was supposed to be.
The last tenant called back later and said the husband is away for a while and she can't pay rent until he comes back in a month or two.
Then there is the camper that I thought was left alter, but I see it in my before videos as well. With all the stuff that was on the properties, I somehow missed the camper with people living in.
We think that all the tenants know each other or are related in some way and also knew the old owner as well and that is why no one paid rent.
We have been able to get one of the houses to pay rent, the other paid about half what they owed and the other is paying a little bit. They all have to clean up the outside of the properties or the city will fine us for code violations. If they can get things cleaned up all the way and pay all the rent we will let them stay for the immediate future.
That also assumes they do not have pit bulls running around off-leash that are not allowed per their lease.
This is an interesting property and I knew it would come with challenges when I( bought it but that is also why it is so cheap! You can't buy one house for less than $200,000 here. They all have water taps, sewer taps, and development potential.
You can see the before I bought it video here with all the junk
Here is the other camper video that went viral!
Here is what it looked like when I bought it
I used a 1031 exchange to buy this and you can learn about that here:
You can get my book on rental properties which tells you not to buy properties like this here:
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