REBubble

I’m writing this in hopes of helping someone in the future who reads this (even if it’s just 1 person), as this is THE worst real estate experiences I’ve ever dealt with & hoping the greater community can learn from my mistakes.

Back in October of 2022, I purchased a MFH in Central Valley CA, and it was a brand new build (no tenants placed). My dad was in the area doing some work, passed the property, and the seller happened to be on site at that time. My dad introduced himself and passed the seller’s contact details right on to me. I was ecstatic - I had been trying to purchase another investment property for a year with no luck given the insane market, and I thought for the first time luck was on my side.

I invest in the Central Valley, but this property was an entirely new region of the valley I haven’t ventured in nor done any research on. I was very eager with the opportunity in front of me and thought I’d get it now and figure everything else out later. My ego got the best of me, and I didn't do any major analysis (besides $$$) and thought this would be a breeze of an investment . Major mistake.

I submitted an offer and it was immediately accepted. Once we were in escrow, the seller allowed us to hire a Property Management company to come in to take pictures & begin listing the property for tenants. After about a month of listing the property and no hits, the PM group & I agreed to amicably go our separate ways.

In November of 2022, I hired a new PM group who were extremely confident they could fill the units no problems. Month after month, they couldn’t get any hits, but still they assured me they would get it filled. I persistently expressed my concern about vandalism & squatters, and told them my priority is just to get people in there. The PM group insisted on keeping the price where it was at, and when they would finally agree to price reductions it would be in very small increments. They also told me they were doing regular bi weekly checks on the property since it was vacant, but I later found out that there were 6+ foot high weeds growing in the front yard that they somehow never thought to let me know about (side note: I only found out about the weeds because I got a letter from the City, warning me that I would get fined if I don't take care of it).

Fast forward to March 2022: no tenants for 5 months. A 3 unit building, and they couldn’t even get 1 tenant in there. I get a call from my PM - the brand new property has been completely looted, and we have squatters. They took EVERYTHING: granite countertop, cabinets sinks, toilet, garbage disposal, dishwasher, you name it they took it. I’ve been battling these squatters for several weeks now, and no matter what security measures I add to the property (panel windows & windows, metal guards on windows & doors) they keep getting inside.

The local police department refuses to come out for any of these issues. Every time we kick out the squatters, they come back a day or two later. I’ve been battling with them for 2+ weeks now and each time they come back the destroy some thing else (electrical boxes, solar panels, etc). I'll send contractors on site to give me a quote on repairs, and there's the squatters sitting right in my living room. As it stands, we are still battling these squatters & as of today I found out that they somehow have accessed the property through my roof. No end in sight...

Lessons learned:

1 - KNOW YOUR MARKET. I went in blind into this investment, and let my ego get in the way of smart thinking. I never visited the property myself (I want to start investing out of state and thought this would be a good first step), and that combined with my lack of market knowledge meant I truly had no idea what I was signing up for

2 - If you’re buying a new build, HAVE AN ORGANIZED TENANT STRATEGY. My other investments already had tenants in them, but I didn’t think it would be too difficult to find tenants. Having a better strategy and bringing that strategy to the PM could have avoided this situation all together