The Lesson From the Sale of Property 3

So, I was supposed to move on to a different topic, but I feel like I should mention something about Property 3's sale.

When I listed Property 3 for sale, the eventual buyer was a real estate investor from New Jersey. According to my real estate agent, he was a very experienced investor with many properties in New Jersey and Upstate NY. Anyway, he had a list of demands for what he wanted done for the sale. He wanted the basement beams reinforced, the outside hallway painted, the outside porch reinforced, and several other things. Nothing too crazy but definitely a pain in the butt, especially considering my belief that my 95K sale price was too low.

One of the other things he asked me to do was to make sure the place is fully rented before the sale. There were two empty apartments due to COVID related financial problems from the tenants. As I stated in the previous post, Property 3's neighborhood was not great at all, but the seller wanted what he wanted so I got to work. After two months, I had rejected pretty much every application. With less than a month to go, I decided to pick the best of the worst. With two weeks remaining, I had finally rented out both empty apartments, and the sale was done. Seven months later, one of the new tenants was responsible for the bio-hazard that the city eventually deemed as unfit to live.

 

You know, I've always considered myself an honorable property owner. When I was able to scam Mallory out of her rightful portion of security deposit in Property X almost ten years ago, it felt good... for a short while. But then it ate at me for days, and then for weeks, until I finally decided to return the rest of her deposit as the property management company's "cost reevaluation." I realized then that I'm terrible at being a bad landlord, so I decided to just do good business.

In this case, the buyer put pressure on me to either get the place rented out or lose the sale. This forced me to lower my criteria for qualified tenants, and this ended up being a disaster for the buyer. 

The lesson for me is simple: When I buy a property and it has empty apartments, leave them empty so that I can move in my own tenants with verified qualifications. If someone like me, who likes to do good business, can be pressured to make such bad choices, I'm pretty sure that the average seller won't give a damn about a property that they will no longer be responsible for. This is an especially important lesson to learn, now that I'm gearing up for purchases. I'm sure I will make little mistakes here and there, but making a mistake like Property 3's buyer did could cost me everything.