Real Estate Investing De-Motivation… A readers landlord story…
I tell you what. 2008 has been huge for our little real estate investing website over here.
- Traffic is doubling almost every month
- Readers are emailing me every single day with questions and comments
- Our website redesign demo will be ready by this weekend
- We have a ton of awesome resources in the works for you
Wow!
Anyhow, one of our readers emailed me a couple weeks back telling me about his trials and tribulations in real estate investing… and what has gone wrong in his investing endeavors.
This will be the first part of a 2 (or 3… I haven’t decided yet) part series where I will present the readers story, his problems to date, and… how you can avoid these real estate investing problems yourself.
Without further adu… here is the readers real estate investing “nightmare” story.
Enjoy…
“In your last E-mail you asked for trials and tribulations with regard to motivation. Well, the worst “demotivator” that I know of is failure. Especially when it seems to be something that you are responsible for, but yet cannot control. Hence my story.
My first REI properties were two condos I bought in different parts of the same town in a southern state.
One of them never rented out for a single day over the ten months or so that I owned it. The property manager I had signed on with (a one year contract) said that they could not understand why. I was twenty five dollars below the prevailing rent in the same building, people who looked at it loved it, (it truly was beautiful) yet no one would sign on the dotted line.
After I sold it last year, the value had increased just under $900 for each month I had owned it. If it had rented out in a timely fashion, I would have made about $7K or so.
Of course, if it had rented out, I would probably still own it! * Grin *
The second condo had taken a while to rent out, but it finally did. The following December and January the tenant paid no rent. The property manager did nothing, and, unfortunately, my life was in a turmoil at the time and I did not notice it myself for a couple of months.
When alerted, the PM “made an arrangement” for the back rents and penalties to be paid, but did nothing to enforce it when it was not. The tenant skipped a couple of months here and there during this time.
Just at the time when I was going to call and insist on an eviction, the PM dropped out of the residential field to focus on their commercial property management, so I chose another PM who seemed a real go-getter.
It took a little over a month to get her evicted and he took over the property last October. Despite a number of calls, as of last January first, a full three calendar months after getting it clear, he had gotten it painted, but the carpet had not been cleaned and the place was still a smelly pig sty complete with a BIG pile of bugs around the fridge, having never been cleaned.
The place is on the market now. That tenant took a beautiful little condo, which I would have been happy to live in, and turned it into a smelly mess. I have spent almost every dollar I received in rent just to renovate it to a reasonable condition to sell. Even if I get my full asking price I will have lost thousands of dollars over the year and a half (more or less) that I have owned it.
Yes, I have learned some valuable lessons, but that does not help in the motivation department. Yes, I am continuing to invest, but with several friends and family watching to see how I do, it was difficult to make that choice. I figure that I will give it one more Honest-To-God try.
If that does not work out, I will throw in the towel. At age fifty five, I do not dare risk any more than I have set aside for this purpose.
I would suggest that a (blog?) lesson on how to manage your property manager would be valuable. In the mean time, wish me luck.”
C-ya;
Gary
Unfortunately, I think a lot of first time real estate investors have some similar stories. However, there are specific reasons that Gary’s situation has ended up like this… and specific ways that you (and Gary) can avoid this in the future.
Property management companies are a blessing if you find the right ones. However, as Gary found out… if you come across a crappy company… you’ll get crappy results.
I have a system to find credible and effective property management companies as well as ways to keep them accountable. However, in the end… the success of owning and managing rental properties lies in your lap and your abilities to manage a real estate investing business.
Just like any business, you need to learn how to properly manage people, vendors, your finances, marketing, and your assets. Without knowing how to properly manage all of these things… owning rental properties (or any business for that matter) might be a real pain in the ass.
Right now I’m working on a follow up article to lay it all out for you so you don’t make these mistakes again.
I just got to thinking…
It would be way easy to run a free teleseminar on this topic with me and another successful rental property owner if there are enough people who are interested.
If you would be interested in free all content... no sales pitch… teleseminars on specific topics that you suggest… shoot me an email through our contact form. If there is enough demand, we’ll set one up and I’ll let you know about it through our newsletter (so be sure to join our newsletter through the box at the top of this page).
Real estate investing is an extremely rewarding way to build your wealth… but if you don’t use the right systems… it will be way more difficult.
So…
- Let me know if you would be interested in free, no sales pitch, all content teleseminars on this topic and other topics that readers suggest
- Send in your questions on your specific hang-ups as far as your success (or lack of success) in REI. I’m here to help. Just head up to the contact link at the top of this page.
Why do I want to do all of this for you?
Because The REI Brain is on a mission to change the Real Estate Investing world. You with a little bit of me… we’re changing the REI world (thanks Gary V. for the slogan!)
Hey, my name is Trevor and I'm the founder of The REI Brain and a real estate investor since the age of 21. Right now, my focus in real estate investing is multi-family income properties and I have plans on moving more into the commercial real estate investment world in 2008 and beyond. 
I would ABSOLUTELY be interested in webinars, newsletters, etc. And for Free? That would be a blessing!
Hey Melissa,
Thanks for the comment! Great, what specific things are you stuck on right now in REI, life, biz? What is holding you back?
If you’d answer those questions that would give me a great idea of topics to cover.
Thanks again!
Also, be sure to join our newsletter if you haven’t already.
Cheers,
- Trevor