MoneyChisme: Personal Finance for the Latinx Community

From Haunted Houses to Tough Tenants: The Spooky Side of Property Investing

October 26, 2023 Violeta Sandoval Episode 28
From Haunted Houses to Tough Tenants: The Spooky Side of Property Investing
MoneyChisme: Personal Finance for the Latinx Community
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MoneyChisme: Personal Finance for the Latinx Community
From Haunted Houses to Tough Tenants: The Spooky Side of Property Investing
Oct 26, 2023 Episode 28
Violeta Sandoval

Let's talk about the SPOOKY side of real estate investing. From buying haunted houses like the 'Mortuary Inn',  to devious tenants, real estate investing can get scary!

I share how purchasing haunted houses is a unique industry.  For example, I visited one of these creepy properties, the Old Haunted Jail  in Charleston, and how some investors look for the haunted properties. Bad buy or great investment?

What about the curse of unforeseen repairs and issues? Many new investors, who jump right in, may deal with this curse!

But the most terrifying and dreaded obstacle of rental properties, is the devious tenants. This is one of the biggest hesitations that people have that prevents them from getting into real estate investing. Yet, in my experiences, these tenants are all part of the game. I share how to reduce that risk and how to plan for them.  

 Despite these scary stories, remember that real estate investing remains a great way to create multiple income streams and generational wealth. Do you have the courage to get into it?

Support the Show.

Subscribe to the MoneyChisme Monthly Newsletter for more!


Get my Free Start Investing in Rental Properties E-book

Support/Apoya MoneyChisme:
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Want to be a guest on the podcast?
http://moneychisme.com/contact-me/

Follow my Social Media:
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Disclaimer: I’m not a financial advisor. The information contained in this video is for entertainment purposes only. Please consult a licensed professional before making any financial decisions. I shall not be held liable for any losses you may incur for information provided in this video. Please be careful! This video is for general information purposes only and is not financial advice.

DESCARGO DE RESPONSABILIDAD: No soy un asesor financiero. Las ideas presentadas en este video son opiniones personales y solo con fines de entretenimiento. Usted (y solo us...

Show Notes Transcript Chapter Markers

Let's talk about the SPOOKY side of real estate investing. From buying haunted houses like the 'Mortuary Inn',  to devious tenants, real estate investing can get scary!

I share how purchasing haunted houses is a unique industry.  For example, I visited one of these creepy properties, the Old Haunted Jail  in Charleston, and how some investors look for the haunted properties. Bad buy or great investment?

What about the curse of unforeseen repairs and issues? Many new investors, who jump right in, may deal with this curse!

But the most terrifying and dreaded obstacle of rental properties, is the devious tenants. This is one of the biggest hesitations that people have that prevents them from getting into real estate investing. Yet, in my experiences, these tenants are all part of the game. I share how to reduce that risk and how to plan for them.  

 Despite these scary stories, remember that real estate investing remains a great way to create multiple income streams and generational wealth. Do you have the courage to get into it?

Support the Show.

Subscribe to the MoneyChisme Monthly Newsletter for more!


Get my Free Start Investing in Rental Properties E-book

Support/Apoya MoneyChisme:
https://www.buymeacoffee.com/moneychisme

Want to be a guest on the podcast?
http://moneychisme.com/contact-me/

Follow my Social Media:
https://www.instagram.com/money_chisme/

Tiktok:
https://www.tiktok.com/@moneychisme

Pinterest:
https://www.pinterest.com/MoneyChisme/

Disclaimer: I’m not a financial advisor. The information contained in this video is for entertainment purposes only. Please consult a licensed professional before making any financial decisions. I shall not be held liable for any losses you may incur for information provided in this video. Please be careful! This video is for general information purposes only and is not financial advice.

DESCARGO DE RESPONSABILIDAD: No soy un asesor financiero. Las ideas presentadas en este video son opiniones personales y solo con fines de entretenimiento. Usted (y solo us...

Speaker 1:

Okay, so we are in spooky season, so let's talk about some of the spooky side of real estate investing. Hola, welcome to the money cheese man podcast. I am your host, violeta, a first-generation Mexican immigrant. I am a real estate investor and business owner. But oh, let me tell you, just like other first-gen's, I was not taught much about personal finance, and I mean, needless to say, I was being pervida. I was so lost and I struggled a lot in my personal finance journey and that's why I created the money cheese my podcast, where each week I bring you the cheese man on how to manage and grow your money and other money talks to help you to kick ass with your finances. All right, so let's get into this week's money cheese man. Hello, hello, welcome to another episode of the money cheese man podcast.

Speaker 1:

Okay, so I'm always talking about how real estate investing Is a great way to build multiple sources of income and, you know, start building that generational wealth. But oh, you know, every time I post about it, I always, you know, can see, like the comments or people just talking about it, of kind of this fear of Of actually starting real estate investing, and I get it. It could be scary and, you know to even think about, like, hey, is this something I want to get into? And you know you hear the horror stories and People are like, nope, nevermind, I'm not going to do it. Especially like if you follow my instagram or you know, like my tiktok, you know I posted of, you know recently, how I had two tenants that I had to evict and how one of them had like Basically left all of their stuff and I had to do all this stuff to like get it back to be rent ready. And so a lot of people see that and they're like, yeah, real estate investing is not for me. And so, um, just keeping on trend with the spooky season, I want to, like you know, just have kind of like a Fuzzy episode of some of the kind of fears or the scary side of real estate investing.

Speaker 1:

So the first one that I want to talk about I actually got the idea because I was seeing Marieville from your favorite immigrant money coach, and so if you follow her, you probably saw that she kind of like bought a, a huge fixture upper, like it needs a lot of Rehab and everything, but she was sharing like one of the comments that somebody, um, like one of her followers put on there and it kind of like had me laughing because they had said, like you know what Is it haunted? And I was dying because I was like you know what, like I never even thought about, like when I'm buying these properties, like could they be haunted or whatever, and so I wanted to talk about that. Like you know, sometimes when you're out here buying these properties, like it's kind of like Doesn't cross your mind off the bat of you know, hey, is this property that's something to happen in this property that you know could be haunted? And you know, um, I kind of believe in ghosts a little bit. It's kind of I don't know, I still don't know, like what my decision is on that, but if you do, you know that might be something that you want to start thinking about if you decided to get into real estate investing.

Speaker 1:

So I went online to see, like you know what, like you know, are there any like haunted properties nearby, kind of? And you know there was one that you know caught my eye and, um, this one's like in northern California and it is the mortuary in and it's like a four-story home that used to be a funeral home, and you know, I mean that Just screams haunted to me I mean funeral home, like straight off the bat, like haunted. And you know this house, you know, actually inspired the novel the mortician's wife, which I think is like a movie as well, like I swear I've seen it as a movie but I haven't seen it. But I swear I saw like somewhere, maybe an like Amazon Prime or or Netflix or something at one point. But anyways, so this is the house that inspired that, that novel and possibly movie.

Speaker 1:

Now this house has been sold like several different times and Like, at some point it was like almost 900,000 but then, like you know, the latest one was like less than a hundred thousand. So, like you know, why Did it have such a huge drop? Like did it have so many issues or was it because it's haunted and that makes it hard to sell? But like, look, researching, looking this property up, I saw that, you know, former owners were like apparently confirming that it is haunted and you know. But some people go out and look for haunted houses and one of the previous owners, actually, you know, saw an opportunity and, you know, went and purchased this property and decided to do kind of like a, a bread and breakfast kind of deal and they call it dead in breakfast. Like sounds like so much fun.

Speaker 1:

Like, would you have stayed in this bed and breakfast, I mean, if it was closer to me? I think that's something I would have done. Like I think I would have stayed on there because when I was like doing my internship, I was traveling on the East Coast and I went to Charleston and I did the like midnight haunted tour at the old haunted jail which, by the way, is another one that some investor you know by and out, like those tours in the middle of the night and you know I was I was like you know what, let me. I saw that tour and I got motivated and actually, looking back, I actually actually did like a boat haunted tour as well and that was fun. I didn't see any ghosts or anything like that. But it was definitely creepy and I was by myself because they split you up in like groups and I had to like tag along, be a third wheel with this other group, this couple, and it was scary.

Speaker 1:

But you know some people, some investors, are out there looking for things like this and you know, try to. You know, because people want to go do these things and they will do tours and make money that way. Okay, so the next one I want to talk about is the curse of Unforeseen problems, like I know, kind of corny title, but you know what, keeping in theme, like I said, but you know, sometimes that's the scary side of, you know, real estate investing is not necessarily like hauntings or something like supernatural, but like the hidden issues that just like constantly plague a property that you purchase. But I find, like this is typically with newer investors because, again, you know, sometimes they end up jumping into a property and not properly planning out everything or or understanding what all goes into it and what they should be looking for, and that basically ends up being a Curse for them because, like things keep coming up, things that they weren't planning for. You know, because, like people see like flipping a property as something like easy and Like easy money or whatever, but it actually takes a lot of planning and a lot of like calculations and Analyzing, like knowing the markets and stuff like that, because the longer you have a property and the longer it takes you to fix things and everything like that and More things that come up that you didn't financially plan for or account for when you were calculating how much money you're gonna make. Like that starts eating up your funds and your profits.

Speaker 1:

And even with long-term rentals, like how I invest is like sometimes you Get some properties that just you know our constant pain, or at at the beginning things start coming up or whatever. And you know, if you jump into investing in real estate, especially like rental properties, especially older Properties for example, you know both of my duplexes, one is from like the 1920s and the others from the 1930s. So like, when you are getting into these properties, you have to think about things like lead and asbestos. Probably, especially if you're trying to like rehab and do like major repairs, you have to take those into account that you might have that. And then on top of that, usually with these types of properties you know the previous owner didn't do that good of a maintenance Like, if any. So like I'm always buying these properties and like there's always like so much that I have to fix because these houses were just neglected, and so I'm fixing them as I go. I always do like the safety stuff first and then do updates for the properties as I go, and so that's what I'm doing right now.

Speaker 1:

But if you don't know this when you buy these, like you're going to feel like you just been cursed, or this property is cursed because things keep coming up and it's just because you just didn't know what you should be looking for or what to expect when you find these properties. Because you see this and you're like, oh, it's a good deal, because I got a good deal on these properties, but that's because they're older homes and I, you know, educating myself and I, of course, I had my mentor making sure and guiding me to make sure that I understand what I'm getting myself into, not only mentally, but also like financially, and what should I be planning for in these properties. But if you don't know this, then these things are going to keep coming up and you're going to feel like you got a bad property, but in reality it's still a decent property, especially if you got it for a good deal and the rent is covering everything, but you didn't plan for anything. So it can cause huge headaches, if not financially have you struggling and eventually probably have to be forced to sell the property. All right.

Speaker 1:

So the last one I want to talk about is the devious tenant, and this is one of my favorite ones, because this is the number one reason, I'm pretty sure, for most people that are thinking about, you know, getting into real estate investing. But this is the number one thing that keeps them back, because they are terrified of having this devious tenant that is going to like destroy their property or they're going to have somebody that is not paying the rent and they're going to have to deal with the whole eviction process and it's going to be a huge headache and they're going to lose so much money. And, matter of fact, there's one story that has been circulating around recently because there's this Airbnb host in I think it was in Los Angeles and right now is tied up in like the legalities of that rental property, because that person that originally had stayed for an Airbnb stay ended up actually turning into kind of like a long-term tenant but then has not been paying any rent and everything like that. And now you know the owner cannot kick them out because of all these legalities and all this stuff. So it's been circulating around and being like, oh squatter, this is why you don't invest in California, or this is why you know you don't become a landlord, because then you have to deal with squatters or tenants that don't pay and they just stay and you can't get them out and all that. And so it's just a lot of like fear getting promoted. But the thing is that with this situation, people are not getting like the whole story.

Speaker 1:

And you know, one of the things that you know I promote is that make sure that when you are getting into these like rental properties and trying to be a landlord, that you have all your ducks in the row and that you know your local and state laws and stuff like that, which is why I use like a property manager, because, like I let them do all that and I just, you know, obviously still kind of do glance over and everything like that, but that's what I pay them to do. And they handle all that for me and they evict people for me. And, matter of fact, I just recently had to evict someone for non payment and it was so smooth like it was. It took like less than a month and by the time like it got to me, everything was already taken care of. The tenant had already moved out, the court had already approved the eviction and all that stuff, and like it really only was like less than a month's rent that I kind of lost, but I ended up keeping the security deposit and so that kind of covered it, plus what I had to fix, which that will be another episode because I want to go over the whole. You know experience and stuff like that.

Speaker 1:

But basically, back to the Airbnb is that guy did not have all his ducks in a row he was renting out like a guest house that he was Airbnb out and apparently, you know, didn't have permits for a shower and for the unit itself, I believe. So what happened was this guest, you know, stayed at his guest house through Airbnb but then asked to stay a little bit longer because she needed, or that person needed, more time. And this is where, you know, one of the things that this owner did wrong was that he informally agreed to let her stay for six months there and because of that, then Airbnb wasn't going to be able to help him now because he basically violated their turns, because he allowed them to stay for longer than what they scheduled for. So now it's like on him so that was one of the mistakes that he did, and then he extended it like another time when she said that she wasn't moving and all that stuff, and so then it just escalated from there, because then they just started going back and forth, and this person, of course, then found out about the unit not even being permitted or allowed by the city, and so this is one of the things that messed him up as well was that how can he enforce something when he's not legally renting out that place in the first place? So you know, the tenant found a loophole and so now it's been ongoing, and that's one of the reasons that you have to make sure you're doing everything correctly so that people like this aren't able to take advantage.

Speaker 1:

And then also he waited forever to start the eviction process. And you know one of the things I've learned, that you know you start the eviction process off the bat, so you get those, like you know, rents due on the first, and then you get like five days of leave way or so on the sixth day and that you haven't received your rent, you start the eviction process because you get the, the payment late, whatever with the late fees or whatever. Then you could like cancel the eviction, but if you wait till, like you know, towards the end of the month to start the eviction process, then that's like longer time that you have to wait, meaning that's more time that you didn't get rent and now more time that you have to wait to evict them and then more time to like flip the the unit out, to put it back on the rental market. Like that's extra, extra time and it's not needed because, like I said, you could stop the eviction process at any point. But you know you want to get that started so that way it reduces the time that you your your properties vacant and to you know you don't want to give the tenant any reason to kind of have as why they could fight you in court for it.

Speaker 1:

So, overall, like the devious tenant is a real, you know concern if you were thinking about investing in real estate. But like this is one thing that you know I talk about and you know when people come to me asking, you know, for help to get started and all this stuff, and one of the things that I say is like, look, you know I get it. This is a legitimate fear and you know, unfortunately, I am here to tell you that no matter what you do, no matter, you know how, you know detail, you do a background check or whatever to try to prevent renting out to somebody that might either not pay you or just leave the property like a mess or whatever. Like it's going to happen, like you have to. Like if you're thinking about, you know, getting into real estate, investing, especially being a landlord, you just have to get over that because it's going to happen at one point in time.

Speaker 1:

And throughout my the 10, 11 years that I've been a landlord, is that you know I've had it happen three times already to in the last month in September. So if you've been following, like my Instagram or my TikTok again is you'll you would have seen. You know that I just had to evict two tenants one because she was getting violent with my other tenant and my property manager, and then the other one was for nonpayment and I had to evict them. And the one that I had to evict you know, just like because I had to evict them left the property a mess, you know. They left all their junk and stuff, and so I had to do junk removal, do some touch up pain and replace the carpet because they left like it was trashed. Basically, and you know a few other things that I wanted to update, since you know I was doing a tenant turnover anyways.

Speaker 1:

And you know, like I've had it happen three times and you know, no matter what you do, it's going to happen and you just have to plan for it, because this the one that you know, I let her break her lease, she was paying her rent on time and everything like that. It's just I had to, you know, think of the safety of my other tenant and also of my property manager. And then the other one wasn't paying. Towards the end, like they started off paying and I don't know what happened and they just stopped paying. And you know, and the first time that I dealt with it, the same thing happened.

Speaker 1:

This was back in like 2019, I believe, or 2020, where I had to evict a tenant to and that tenant was there for like over a year being a good tenant, paying on time, and everything like that. But you know, sometimes life happens, this tenant ended up going through like a divorce and then lost his job, you know, because I'm sure all the issues and family troubles and stuff like that wasn't like good for them, and so they just couldn't pay and I just had to victim. And same thing, because I had to evict them. Well, actually I didn't evict them. I paid them to get out and they just left like random stuff that I had to toss and they did some damage to the house, like not on purpose but just, you know, wearing tear of the house. So I had to do that and ended up selling that property just because I wanted to switch investment strategies. But overall I still made money off the sale of the house because it appreciated way a lot and then over time I still made enough money off of the rent from renting out that property throughout that time.

Speaker 1:

So and same thing with these properties, like this is only like year two or three, no year two for these properties and you know I've had this. But I, over the long term, I've made money and even with this, even going through this, like the other side of those properties were rented out and they're paying on time. So like in the long run, you're still making money. So overall, real estate investing definitely can be scary and intimidating but over the long term you're going to still make money.

Speaker 1:

As long as you plan for the things like that, like attendant not paying or, you know, damaging the property or stuff like that, you know you just make sure you have all your ducks in a row, that you do stuff legally, that you protect yourself in that way which is why you know I have a property manager and stuff like that, because I want to make sure I am good. But overall, real estate investing is still remains one of the greatest ways to build multiple sources of income and build that generational wealth. So you know, don't let the market scare you, don't let you know all this craziness that you hear about real estate investing scare you off from actually jumping into it. And again, I also have resources, I have courses. You know you could always hit me up for any questions and you know hopefully you enjoyed this episode that I was trying to make kind of like spooky and Halloweeny. You know to stay on trend and stuff like that.

Speaker 1:

But other than that, I will see you in the next episode, bye. Thank you so much for listening. If you enjoyed this episode, please rate and share so others may find this podcast. If you'd like to be a guest on the show, you can email me at infomoneychismecom and don't forget to follow me on all my social medias that are listed below. Hasta la próxima, bye.

Spooky Side of Real Estate Investing
Dealing With Devious Real Estate Tenants
Navigating Challenges in Real Estate Investing