Word got out about the purchase of the duplex I have under contract at work and so I sat down with a few other new investors like myself. Most of us listen to the Bigger Pockets podcast and are interested in creating passive streams of income for us to eventually retire and live off. We sat down and hashed out some of our different strategies and everyone, mostly new to investing had different levels of experience and goals.
One of the guys who was there just closed on a primary residence that he intends to turn into a rental in a couple of years and is looking at other properties. Prior to closing on this property he ran into some difficulties with a seller who tried to back out of a contract and keep his earnest money deposit. As a result they ended up in a months long legal battle and eventually got their money back, but lost a few thousand dollars on legal fees.
I myself had another duplex under contract about a year earlier in 2016 and during the inspection found an un-permitted room in the garage that wasn’t there during the initial walk through. It was an interesting situation in general. The sellers had adopted a neighbors child who was an alcoholic and couldn’t take care of the baby. The issue was the mother would come over at all hours of the evening after being on a bender asking them for money. This was the reason they were moving was for the child’s safety and stability. They wanted to live in the house just until the adoption papers came through and the husbands US citizen status. The issue was they had no idea if the papers would come tomorrow or a year from now.
On the other side their extended family lived with their grandparents in a household full of 3 children. There were a total of 6 people and the place was clean and nice, but just a very strange situation. Along with that the inspection report came back with a number of small issues including a minor roof leak and the seller refused to consider either fixing or reducing the price. Their agent didn’t want to put anything in writing and “promised” they would take care of it. I walked away from that deal and ate my $600 home inspection learning a few crucial lessons in the process.
I should have stayed far away from that deal in the first place once I heard the issues with the adoption and US citizenship, but continued to pursue it. Additionally there was also a language barrier that we were not able to truly overcome between mine and my agent’s lack of Spanish and their very sketchy “off the record” agent. I don’t speak Spanish well but understand enough to realize what he was telling the seller compared to what he was telling me was way off. Eventually I walked away and spent a little money on an inspection and now understand some red flags for future deals.