Do Your Due Diligence!
Check this out:
In 2003 I bought a small 2 bed/1 ba 900 sq ft. 1 car garage house.
Fast forward 9 years to 2012. The tenant was not happy with me. I had the audacity to ask him to pay the $1100/mo rent on time… If you will pardon my rudeness.
He called the city (Portland, OR) on me. ‘Unsafe domicile for his family’. Portland area actually has people giving classes for tenants, teaching how to literally get away with free rent by filing complaints against landlords.
So… during the process the city inspector discovered that the family room had actually been a porch that was closed in without permits or inspections.
I had purchased in good faith 9 years prior in 2003. This was 2012. Mortgage meltdown 2008.
Between the realtor (still around but no recourse), inspector (no longer in business), title company (now defunct with the mortgage meltdown) and seller (passed away) I had no fall back. So now it’s my problem.
18 months of $550/mo city fines. If you’re keeping score the rent was $1100 and fines of $550 = $550/mo net.
So the city requirements called for work that 3 contractors gave bids at $25,000 minimum. So we ended up kicking the tenant out to do the work. Actually had to do $1000 cash for keys.
He was bold enough to ask us to put his family in a motel for 2 months while work was in process and let him move back in…
Uh…no!!
So to satisfy the code requirements, stop the fines and resolve things we TORE THE ROOM OFF. Finished off the back wall, sliding door and had a 700 sq ft smaller 2 bed/1ba 1 car garage that actually rented for the same monthly.
But we lost $$ thousands in the process. Including a couple thousand for my attorney.
Bottom line? DO YOUR DUE DILIGENCE!!!
Here’s someone else’s challenge. This one is much worse than mine was.
Wrong lot! (with video)
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