The Accidental Landlord & Landlord Horror Stories Podcasts

The below is transcribed from an episode of The Accidental Landlord Podcast. Listen to the full episode, here. 

Peter: All right, welcome to another episode of the Accidental Landlord podcast. Today we have Dan from the Landlord Horror Stories podcast. Dan, welcome to the show.

Dan: Peter, thank you for inviting me. And I don't know if I'll have the "the" in the podcast title. Right now it's not, but I'm not too picky.

Peter: Yeah. So why don't you introduce yourself to our listeners? Tell us, you know, how did we arrive at this Landlord Horror Stories podcast? Maybe a little bit about yourself.

Dan: Sure, absolutely. I host the Landlord Horror Stories podcast. It is a show where I have real landlords on, and we explore the wild side of the business. Being a landlord, you're not in the spreadsheet Excel business; you're in the people, the hospitality service, right? A lot of craziness happens in this profession. I've been doing real estate for five years now. The first three years were me really trying to understand how I could get into the business, saving money, earning enough money, and learning all I could about the investment class. So far, we've got five doors. We are about to move into our house hack, and I'm all about real estate and love talking about real estate.

Peter: Awesome, awesome. What part of the country are you in?

Dan: Midwest. So I live in Chicago, and my properties, for the most part, are in Milwaukee.

Peter: Gotcha, gotcha. Okay, perfect, well let's get into it. I think it's really important to highlight when things go wrong, right? We don't want to paint this picture where everything's great and nothing bad happens, and people just get rich off of real estate, which does happen, but there is, I guess you can call it an ugly side. It's not always great, and things don't always go well. If you've been doing this for any length of time, you are gonna run into problems. That's okay, that's part of the business that I think everybody accepts, but it's wise to learn from other people's mistakes because there's information, content, shows like yours that are out there to help landlords learn. So what would be fun today is to go over some of the horror stories that you've highlighted or that you're aware of and see what lessons we can pull out for our listeners. Does that sound good?

Dan: Sounds great. I think that there is a middle ground, and that's what I try and do and what I try and talk about. Bad things can happen, and you should expect bad things to happen, but there are always solutions. You're not the first person to have gone through that problem.

Peter: Yeah, exactly. Just for context, we own a property management company and manage roughly 350 homes. Bad things happen, we had a fire in a house. I'm happy to talk about it at some point. There were definitely lessons learned. Great for whoever is saying they've never had anything bad happen, but it's gonna happen eventually. Let's dive into the horror stories. So why don't you share the first one with us?

Dan: Sure, I put together three stories from least crazy to most crazy. The first one is about the importance of a Certificate of Occupation. This story comes from the episode titled "A Year Without Tenants." I interviewed Justin Brownwoods, the host of the Price of Avocado Toast podcast. It's a show about millennials, money, and budgeting. He had a situation where he saved up a good chunk of money and was living in California and decided to buy a rental property.

He found a tenant-friendly market in Michigan and bought a property for around $100,000. However, what he didn't realize was that the property didn't have a Certificate of Occupation, meaning people couldn't legally live in it. Then COVID hit, making it difficult to resolve the issue. He had to deal with local government inspectors who kept finding more problems to fix. The property was poorly flipped by the previous owner, and over 13 months, Justin had to untangle this mess. In the end, he lost about $25,000 on the property. But the inspiring part is that despite the financial setback, he learned so much that it didn't stop him from investing in real estate. He decided to be a good, ethical landlord on his own terms.

Peter: There's some stuff to unpack here. It sounds like he bought it from a wholesaler or someone who wasn't too forthright about the property's issues. Did he have professional representation during the purchase?

Dan: He was represented by a realtor, and the property was on the MLS. It was a flipper who had done work on the property.

Peter: Yeah, interesting. If you have professional representation, that's the kind of stuff they should disclose or find out for you. Doing more homework upfront is essential. Even in our area, we have properties with explicit warnings about non-conforming rooms and issues, and it's crucial for buyers to do their research. The story underscores the importance of understanding your local rental market and knowing what you're buying.

Dan: Exactly. A good point to remember is that there's often a middle ground between overly optimistic and overly pessimistic views of real estate. Bad things can happen, but there are solutions, and you're not alone in facing problems.

Peter: Well said. That's a valuable lesson for all landlords. Looking forward to the next story.

Dan: The next story involves a squatter situation. We discussed this in the "The Squatter's Paradise" episode. A real estate investor had a house that was under renovation. It was a complete gut job, and the investor had obtained it through a tax sale. But, the house became a paradise for squatters. They broke in, changed the locks, and started living there. The owner tried to resolve the situation legally but faced countless obstacles.

The city, in the name of safety and protection, made it difficult for him to evict the squatters. It was a long, grueling battle, and the investor ended up spending tens of thousands of dollars to get them out. In the end, the house was destroyed. It was so heavily damaged that he had to spend another $80,000 to repair it.

Peter: That's a nightmare situation. So, this property was vacant, under renovation, and squatters just took over?

Dan: Yes, the investor was in the process of renovating it, but he hadn't fully completed the work when the squatters broke in and essentially claimed it as their own.

Peter: This story underscores the challenges many landlords face when dealing with squatters. It can be incredibly difficult to remove them, and it can lead to significant property damage. What lessons can we draw from this?

Dan: First, securing your property during renovation is essential. It's crucial to prevent unauthorized entry. Additionally, dealing with squatters can be a legal quagmire. As we saw in this case, the city's well-intentioned regulations can sometimes make it challenging for property owners to protect their investments.

Peter: Absolutely. It's crucial to understand local laws and regulations when it comes to squatters.