Real estate investing 101 : Horror stories

Here are some of my less-than-finer moments as a landlord. Some of these incidents were beyond my control & others were not. If nothing else, I hope they give you a good laugh.

All of the standard disclaimers apply ... don't try this at home!

• The 500 sqft apartment with 5,000 sqft of trash
  I had 2 tenants occupying a small 1BR apartment. They always paid on time & were never a problem. When their lease was up, they told the property manager not to worry about refunding their security deposit. I knew then that we were in trouble:
  
• My "buddy" who moved in with no security deposit
  Way back in 2006 or so, a friend of a friend at my job needed a place to live, and I had a property coming available. So I let him and his family move in with no security deposit. I thought I was being a nice guy. Over the next couple years, this guy would make my life miserable. He was routinely late with rent and eventually he moved out and left behind about $1,000 in damage. Lesson: unless it's your own MOTHER, never ever let someone move in without a security deposit.
• The "mold problem"
  A pregnant tenant in a small 1BR apartment called the property manager to complain of mold in her unit -- on the walls, on her furniture, on her clothes, etc. The property manager suggested we offer to pay to clean her clothes and allow her to move out and keep her deposit. We said yes, even though I had a feeling this story wouldn't hold up. Sure enough, when we got into the unit, it was FILTHY. There was no mold -- only some mildew. We had to thoroughly clean & re-paint the unit. Because she was pregnant, the property manager advised us not to withold any of her security deposit, because a legal battle would be pricier than just paying for the cleanup.
• The game show contestant
  A tenant in one of our 1BR units (which rented for $375/mo) had it in her head that any time she paid rent, 100% of that rent should go towards improving her unit. First she wanted a new range. Then a new refrigerator. Then new carpet. We said yes the first couple times, but eventually had to tell her that we can't continually put money into her unit. She seemed to think this was Wheel of Fortune, and she'd get fabulous cash & prizes every month. Well, she got angry when we started saying no, and called the city to complain of code violations. Bear in mind, a code inspector could find violations at even the nicest property. We ended up having to spend hundreds of dollars to "fix" really minor things. Her lease ran out, but the property manager advised us to renew her, because she could go after us for "retaliation." So we renewed her for 6 months and then booted her.
• The infestation
  The tenant I mentioned above whom I let move into a house with no security deposit would frequently complain of insects. My policy with pest control is I will treat the house when the tenant moves in, but after that, my assumption is if the tenant is reasonably clean, there shouldn't be a big pest problem. I don't even mind doing an annual treatment. But this tenant would call us at least every other month saying that he cleans all the time, but the cockroaches are everywhere. Sure enough, my exterminator went over there & said the place was filthy. I eventually stopped agreeing to treatments, which this tenant thought meant he could stop paying rent. I eventually booted him.
• The gold-plated groceries
  This actually happened to me a couple times. A refrigerator would break, and the tenant would demand that we reimburse them for their groceries, which they would typically value in the thousands of dollars. Apparently the mayonnaise they kept on hand was made with rare French truffles.
• The car tent
  A tenant decided she'd like a carport, except it wasn't *quite* up to city standards.
  
• The falconry guy
  A very peculiar guy once moved into one of my properties. He always paid rent on time & was generally a good tenant, but one day he called and asked if we would approve a falconry permit on site. He wanted to train large birds. I said sure, why not. I later learned that to make room for his falconry accoutrements in the basement, he hauled an old woodburning stove from the basement up to the house. To this day I have no idea how he did this, and the nonfunctioning stove, which is basically a decorator feature, is still in the living room.
• The pesky squirrels
  We had a house that we were fixing up to sell. It was almost complete -- all new inside, beautiful. I was walking around and noticed a strange hole in the wall. I knew we'd just painted so this was rather odd. Sure enough. squirrels had chewed through the siding and tunneled into the walls during the winter. I'm pretty sure they were rustling around even while the home was being shown to potential buyers. It took WEEKS to trap those buggers and because I'm an animal lover, I had them humanely relocated.
• The BIOHAZARD
  We had a tenant live in a 3BR house for 4 years - always paid on time, never a peep. When they vacated, they left behind what can best described as a 1,000 sqft, above-ground septic tank. Carpet that was light gray when we installed it was DARK BROWN throughout. It seemed fairly clear nobody cleaned in 4 years and many "accidents" occurred. They also never changed the AC filters, which means the AC stopped cooling efficiently. Instead of calling us, they installed window units. Same with the plumbing. They obviously had issues w/ clogs, and instead of calling us, they appear to have accessed the sewage line access and manually flushed it with a hose.
• THE CURSED PROPERTY
  A partner & I bought a 16-unit apartment building in 2007. The ensuing drama is Oscar-worthy:
  • The neverending dumpster drama
    Because this was a 16-unit property, we opted for dumpsters rather than regular city trash pickup via 16 separate rollout cans. We found that no matter how many dumpsters we had, or how often we had them emptied, they were ALWAYS full and tenants would frequently put bulk trash there (which was a code violation). We ended up having to hire 1 of the tenants to "police" the dumpster to make the city happy (and stop the code violations notices).
    
  • The mulch
    We decided to spruce up the property by adding mulch to a bunch of the beds in front of the units. Well, it turns out that bark mulch can stir up roaches and we got a call from an angry (and possibly inebriated) tenant. Give a listen. Needless to say, we sent in the exterminator.
  • The intentional flood
    We were notified that a tenant was dealing drugs and we were required, by law, to evict him. Before he left, he walked upstairs, plugged a sink drain, turned on the water, and walked out. Within an hour or so, a neighboring tenant called to tell us water was flowing into her apartment. The mitigation & repair of that unit cost thousands of dollars. You're thinking "can't you go after the tenant for damages?" Sure, but all it would be is a court date where we possibly get a judgment and probably no money, ever.
  • The sewage explosion
    The city was doing some work on the sewers in the area, and tenants heard a loud boom nearby. Shortly thereafter, the unit at the end of the building had raw sewage come up their drains and flood their unit -- about 4" worth everywhere. All of their furniture was ruined and just the mitigation/cleanup (not including any repair) cost $4,000.

About me

When in doubt...

1. Be patient
2. Don't be [excessively] greedy
3. You can't win 'em all