Our Money Pit

9 years ago, my husband and I bought a small house as an investment opportunity. At that time real estate was supposedly a sound investment, but that was before the housing market completely tanked. In our naivete, we decided to dabble in the world of being landlords. The first year was great. We had fabulous renters, we managed the property ourselves since we lived nearby, and I think the biggest problem that we had reported that year was mice. The next year, was slightly more challenging, we moved out of state, and had to undertake the role of managing the property remotely. Our next renters were always late with rent, unfriendly, and had an attempted break-in that damaged one of the doors to the house that was a continual source of complaints. My husband still wanted to try a hands-on approach and make repairs to the door, install security lights, better locks, but the running back and forth got to be too much, and our renters were difficult about every interaction. We decided to sell the house. We sold it on contract to a friend of a friend. This meant the buyer secured the renters, managed the repairs, and after a period of nine years he would own the home outright. It was kind of like a rent to own deal. It worked, and for two blessed years, the house was not our problem. Then the housing market tanked. He couldn't find renters, and he was moving out of state for a new job. The house reverted back to us. No sale.

This began our foray into the world of property managers, we had to hire someone local to deal with the house. It was too stressful to attempt to handle every repair or complaint at a distance. The first property manager that we used, rented the house to someone that was apparently on trial for a felony. Information you would have thought a background check would have yielded, and might have been handy to have as a testament to character. Within the first two months, our extremely large picture window was shot out in a "drive by". It struck us as extremely odd, given the picture window was on the side of the house no facing the road, but nonetheless we ponied up for the repair. Upon later inspection, when we actually traveled back to our property we discovered that the double pane window was cracked on the inside, not the outside. BB gun discharged inside perhaps? Of course we would never know. Then the renters stopped paying all of their rent. Occasionally we would get a $100 check here or there, but after several months, the renters stopped paying rent all together. Eventually our property manager evicted them, after losing over 2k in rent. That property manager filed charges against the renters, and once about every two years, we get a $10 check from the garnished wages. It is good for a laugh when one arrives. I think they still owe roughly $1900 in back rent, and I am pretty sure that won't ever arrive.

Given that lackluster management situation, it was time to move on to the next property manager. Upon repossession of the house we discovered it was trashed and that we had become the equivalent in my mind to slumlords. It was no longer the cute little house we bought. The new property manager suggested thousands of dollars in improvements so that we could repair the damage but also upgrade the level of tenants that were attracted. We bit. He sold us on a dream and we hired him. The original estimate of 4k in repairs, gradually moved upwards of 7k, an amount that would have required several years of solid renting by honorable renters to pay it off. But we were suckered into believing it was within our reach. We had a woman move in, with guaranteed income. She allowed her brother and nephew to lodge with her, breaking the terms of the lease, but our property manager let it slide, because she paid her rent and was clean. Fast forward to the woman losing her state aid income and her daughter being diagnosed with cancer, and the rent stopped. Four months later, she agreed to move out. Her brother and nephew on the other hand, became some sort of squatters. It took another two months to get them out. Our property manager, didn't want to anger them, because he was afraid that they would trash the house purposefully, which they did anyway. After more bills came in for treatment of termites and other various items, and 4 months of vacancy, we fired the second property manager.

Enter Linda. She has been the most professional and organized property manager to date. She took it over, cleaned it up, made necessary repairs, had it treated again for some sort of bug akin to termites, and professionally removed lead paint that was found on the exterior portion of the garage. Another couple thousand down the drain, but she had it rented within 3 months. Were things looking up? Maybe? Nah. The pipes froze during the winter before the renters moved in. Good times. But after those pricey repairs, we started getting regular rent checks. Every month. The full amount. It was craziness. I did a little dance of joy every time a check arrived in the mail. Sure, we still operated at a loss on our taxes, but maybe we could be done shelling out the do-re-mi. We experienced a total of 14 months of bliss, before we received more bad news. Our renter, had a US Marshall show up on her doorstep to inform her that a sex offender had moved onto the street. Said Marshall did not give any further information or the address, basically just enough to scare the crap out of this mom of three. I headed to the internet for answers. It seemed a wee bit fishy to have a US Marshall show up for a run of the mill sex offender, so I wanted to see if I could dig up any information. Yeah, he wasn't just a sex offender, but a convicted murderer as well, having spent roughly 30 years in prison. You can fill in whatever expletive you want here, because I am sure I said it. Stark reality set in, no one was going to want to rent our house and our property manager was obligated to inform any renter of the circumstance at hand. Our renters indicated that they would be moving on as soon as they could find a suitable place, and we decided to put our house up for sale. Selling it was a longshot at best, but we didn't know what else to do. This week I encouraged my husband to touch base with our property manager to find out what was going on. According to our property manager's secretary the renters were going to be moving, and no one wanted to buy the house. I wanted more details, like, had anyone even looked at the house? Once upon a time it had been a cute house, maybe someone would see that potential and overlook the baggage. I asked my husband to call back for more specific details. He called back yesterday, but didn't get to talk to the property manager in person. Therefore, it was no huge surprise that they called us late yesterday. Unfortunately, they were not returning our call, but calling to tell us that part of our house had caught on fire.

Today we drove over to our little money pit. The kitchen is gone. The roof over the kitchen is gone. Part of the ceiling in the bathroom was coming down. Vents throughout the attic that vented to the outside were melted. Theories that the insulation caught on fire in the attic were abounding. Where the flooring still existed it was clear that all of that was ruined, ceilings and walls were charred gray with smoke. I was a little shocked at what we found. We read in a newspaper article that the fire chief was estimating 10k in damage, so I figured the interior damage was mild. Perhaps I have a completely skewed perspective of what things cost, but it seems like we are talking about a heck of a lot more damage than 10k. From what our renters indicated, the fire department ruled that the stove was left on, but it was clear that they did not agree with that finding, which would have made them at fault. Not that fault really mattered at this point, what was done was done, and they didn't have any kind of insurance anyway. They lost everything. Even their dog was in the hospital, having been found unconscious at the scene. I wasn't interested in laying blame at their feet. How could I? I have a roof over my head, food to put on my table, and clothes to wear on my back. Don't get me wrong, this is a HUGE hassle and my head hurts just thinking about how many decisions and trips we are going to have to make in the near future, but it is just that, a hassle. I can't help mulling over the words of Sweet Brown tonight though. "Oh Lord Jesus its a FAR! Ain't nobody got time fo' dat!" Google Sweet Brown if you don't know the reference. She gives a riveting interview about a fire.


An adjuster arrives tomorrow to assess the true amount of damage. So now we wait.