It’s that spooky time of year … so here’s our annual spooktacular collection of gruesome tales of terror, resolution, and lessons! No rainbows and nice fairy tales … all brutally honest real-world investing horror stories as told first-hand by the party involved.
Of course, all the best wisdom comes out of tough times, so listen and learn at discount from those who paid full-price for the lessons.
Just remember, when things don’t turn out as planned … keep in mind that you’re building your experience resume and becoming a stronger investor!
In this episode of The Real Estate Guys™ show, hear from:
- Your scary good host, Robert Helms
- His cryptic co-host, Russell Gray
- A cackling collection of ghoulish guests telling their terrifying tales
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The Case of the Clever Criminals
People can always learn from the experiences of others … and real estate investor Sep Bekam is back from previous years to tell us yet another frightening tale from the world of real estate.
An issue for investors in low-income areas can be thieves stealing copper and other valuable things like air conditioning units. He was losing a lot of money on HVAC units, which have to be outside … making them very vulnerable to loss.
He and his team tried everything! Prevention methods like a rebar cage around the unit didn’t even work … but he finally discovered that a concrete pad with the cage bolted into the concrete was successful in reducing about 80% of the vandalisms.
Some still even found a way around that!
Finally, a solution that worked … he and his team thought of an alarm system that triggers an alert to police that sensed when the thieves were cutting off power to steal it.
Lesson learned … an ounce of prevention is worth a pound of gold.
The Costly Confidence Crusher
Billy Keels from Spain has the next Halloween horror story to share with us!
Billy was purchasing his third rental property, a duplex, and may have been over-confident because he had some previous success.
The problem started when he got the inspection report … but failed to read it.
Around 8 months later … the city did a routine inspection of the property and found problems with the roof and the overhang. There were already tenants living there.
Now Billy was scrambling to find a contractor in America while he was back in Europe. It was very stressful and affecting his life and was inconveniencing the tenants.
But Billy says everything is a learning experience … it cost him over $20,000 but now when he gets an inspection report he and his team absolutely read through it.
Apartment Fire in Abilene
Buy and hold investor Randy Hubbs is sharing our next frightening tale!
One time while out of town, Randy learned that there was a major fire in one of his investment properties in Abilene, Texas. It turned out one of 12-unit buildings had burned almost completely to the ground. The building was connected to another, which led to a lot of smoke damage to the building next door.
The good news is that no people were hurt. The bad news was … Randy was two weeks away from putting the property up for sale!
In the midst of trying to figure out his next step … Randy got a call from an insurance adjuster out of Texas. He offered to take all the headaches of dealing with his insurance company off his plate.
He decided to work with the adjuster and he says it was a great decision.
“Sure enough, these guys went to battle and it took quite a long time, but were a big help. Big relief for me on that deal,” says Randy.
It’s incredibly valuable to have an adjuster on your side.
The Mysterious Missing Money
Lender and investor Billy Brown is back again to share a real estate horror story with us.
While he says 2020 hasn’t been all that terrible for real estate investing … there is always something.
He bought an apartment complex last year. The first issue was that he had a construction loan on the building … and when he went to talk to the lender about getting reimbursed … the lender was nowhere to be found!
Three months later, he found them and was finally able to get the money.
His trials were far from over. He discovered he was being double-billed and overcharged on a lot of construction items … COVID happened … and a tenant accidentally started a fire with a blanket and a space heater.
What were Billy’s lessons learned?
He says he definitely could have called out the construction company earlier on the missing money. He says he should have interviewed a few more property managers. Know who your team is!
Pay Attention to Details
Next … Michael Flight is back. He was on our previous show to talk about retail … but his horror story doesn’t have to do with retail.
Years ago, Michael had been fixing and flipping houses with a partner, Jim … and Jim’s brother was their contractor. They weren’t paying close attention and he started asking for more money in advance.
But Michael discovered projects that weren’t getting done … they were way behind schedule and investors were involved. He had to spend a lot of time replacing the contractor. And it cost not only time but money too.
Michael says, “I personally lost around $35,000 because we had not only paid him for work that he hadn’t done, but we had to pay other contractors to come in and fix it, so it was a painful learning experience…”
What lessons does he say he learned from this?
He says he got too busy and took his eye off the ball. He should have been focusing more on what they were good at, which was re-developing retail shopping centers.
It’s so important to not bite off too much and to stay focused on any project you’re taking on.
For more details and to hear even more Halloween horror stories, be sure to listen to the full episode!
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