Rehab Nightmares | REIal Talk | Renovating | EP. 32

Hi, everyone. Welcome back to another podcast episode on Real Talk. This is episode 32. I feel like we just started these yesterday, and we're already on episode 32. It's insane. Today I am here with our rehab coordinator, Jen. Steve was supposed to be in here, but he got a little busy, so Jen is filling in for him. She is just as amazing as I said. She's a rehab coordinator. Do you want to say anything before we get started?

No, just, you know, I try to keep track of the projects that we're doing and all the moving pieces that go along with that.

Absolutely.

All right.

So as I said, we are doing rehab nightmares, so I'm not all the way in Bulldog. I'm more in the marketing side of things, of course, but I do still have my own rehab nightmares from my parents. If you guys have listened to any of the other episodes. I kind of grew up in the industry and helped my parents a lot with their rentals that they would do. And 1. As soon as we started doing this or we came up with this topic, one immediately came to mind. My parents bought a house from an auction, so as you know, you can't, like, do a walkthrough on it or anything prior, really. You can try, but not really. Maybe, like, peek through the windows or something. So they bought one, and when they got the keys, they went inside and they found someone living there. He was coming in through one of the windows somehow, and he. There was no power. There was no plumbing, nothing. And he was starting to strip the house of all of, like, the copper and the. All the plumbing, just taking it out and going and. Oh, what's it called?

Like, selling it?

Yes. And he. Because there was no plumbing or electricity, he had. One of the bedrooms was his bathroom, and it was just filled with feces. And then the other bedroom was where he was sleeping. And mind you, this was in, like, February, so it was freezing cold. He had, like, a propane heater that he was running, so there were a bunch of just, like, empty propane tanks everywhere. And it was a disaster. My parents had to go in and put in all new plumbing, all new electrical, because he had stripped absolutely everything out of it. And of course, we. I mean, it was. It was down to the studs. It was absolutely horrible. And the smell was bad. My poor brothers had to go in and rip up the carpet.

How do you get that smell out of there?

We. There was an ozone machine that sat in there. We swore by ozone machines. We did that in almost every property. We did ozone. I Think there were two. There was one in the back of the house and one in the front, like, in the living room area. And I want to say those sat in there for about a week and a half. And my poor brothers, like I said, they had to go in and tear up all the carpet and everything. I just had to go in and do a final clean. Luckily, I didn't have to do a lot like my brothers and my parents. But I remember when I went in the first time after they, like, got him out, it was a whole ordeal.

With the police, too.

But it was a disaster from the beginning. Once they got everything out and moving, it went pretty well. But that initial first, it was horrible.

Oh, yeah, yeah. Well. And we've had. It's funny, we've had all of those things, but not really in one house, you know, so we've had the squatters at different properties, and like you said, they're living in a place where there's no electricity, there's no running water. So it's awful. And you have to, you know, get them out or call the police or, you know, change the locks and try to deter them from coming in. So we'll try to set an alarm, you know. Yeah, we've had some pretty bad properties that it looks like there. Ha. You know, maybe the squatter isn't in there currently, but there have been in there. There's drug paraphernalia, like you said. There's. There's human waste. There's all that stuff. You know, thank goodness we have good trash out guys, because they earn their money, you know, and then I am familiar with the ozone machine because we ran that at a property that had. I think they had cats. I think they had, like, 15 cats. And I don't have anything against cats, but, you know, sometimes when they are not kept track of or not cared for or whatever, I think they can do a lot of damage to a property in terms of, like, smell and. And everything else. So, yeah, I know what you're saying. We've had the horror stories. Not all in one house.

That's.

That's pretty good. That's pretty much everything all in one house. But, you know, definitely at different properties. And we're dealing with one now where we did the rehab, there were tenants in there, and now we're doing what we call the turn. And there's been a lot. There's been extensive damage. Like the furnace has been stolen. Oh, my gosh. Yes. The kitchen cabinets were out in the backyard.

Yeah.

So I know.

Oh, man.

It's yeah.

So speaking of cats. And turns out one of the other rehab nightmares I was going to tell you about is we had a tenant that was in a property. I'm not entirely sure what ended up happening with them if they just moved out or if we had to go through an eviction process. But I do remember that my parents do not allow pets in their rentals. And this one in particular, when she moved out, of course the property was left to trashed. And we went in and found out that she had, I want to say like three or four cats, but didn't like take care of them at all. And again, I have nothing against cats either. They are just. I feel like you have to. It's a lot of upkeep with them and they did not do that at all. And so the. I don't even think there was a litter box. I think they just. She just let them go wherever. And we had to do a complete trash out again, down to the studs on it, the carpet. You walked in on the carpet and you could just hear like squishing sound. And you would walk out and like under, like into like the kitchen area where there's tile and your feet would leave like wet prints because of how much moisture was in there. And the smell was horrible.

Overwhelming.

Yeah. And so growing up, we never. I, my mom or my dad or my stepdad where they would like talk about a property and they would always call it by the address that it was on. Kind of like what we do here.

Right.

And I would be like, yeah, I don't know what you're talking about. And so it started getting to a point where we started naming them based on what happened in that house. And so this one was referred to as the cat house.

Yes.

And those are the two, like, prominent ones I always remember. And again, my poor brothers had to do the trash out on that one as well. And that one, they were more upset about that one, believe it or not, than the other one. I think it was just because the carpet was actually like wet.

Yeah.

Here and that. But it was also. I think this one was more in the fall.

But. Yeah, well. And I think the. Maybe the first one because they couldn't look at was kind of like they didn't expect it to be that bad, but they didn't know what to expect. Whereas this one, there was a tenon in there. You don't expect. You just don't expect people to do that.

No, not at all. And it's. It's always mind blowing to Me, how, how they do.

Right.

And how, you know, they're okay with doing that. I'm just like, what? But yeah, yeah, it's insane.

And then on the flip side, you have some really good tenants.

Oh, absolutely.

You know, are respectful and take care of the place and, you know, call if there's something wrong. So, yeah, you just don't know what you're getting sometimes.

Yeah, I know. We have one resident in one of our properties. I manage for the properties for my parents and they have been there, I think for like 12 years. Absolutely amazing. No complaints at all. And that's most of them. But every once in a while, here and there, you'll get one. And like the first one that wasn't even technically a tenant related issue that was just bought from an auction.

Right, right. So yeah, anything can happen.

Oh yeah, of course.

Yeah. But we have had our share of nightmare, you know, or horror stories probably. I think the biggest one that sticks out in my mind is the 5ft of water in the basement. Oh, gosh. So last winter, and you know, the bad news is this happened. The good news is it led to an awareness and a process of, okay, we need to shut the water off in the winter because it was a cold week in, you know, February or something in the middle of winter. So the pipes froze and then when they warmed up and thawed, you had this mess. And I just remember this was between us looking at the property to see if we were going to buy it and then to after we, you know, had closed on it and could actually go in and scope it. So you've got that kind of gray area there where you don't own it yet.

Right.

But you kind of have to like be monitoring it, I guess. So now, like before we close, you know, I am reminded all the time, okay, do I go any. Do I need to go and turn off the water at such and such place? And if it's in the summer, I don't worry about it too much. But certainly next winter it's going to be on my radar and it'll be something that I do because like I said, we walked, you know, we're ready to walk into this place. Place. And the window in the basement was just kind of partially open and you could just hear the water like pouring into the basement. And I mean, I had boots on, but no, you know, I would have needed a whole like wetsuit to get down there and actually turn off the water. So we ended up calling back to the office and our person who deals with utilities she had them turn off the water at the curb, you know, so it would stop flooding everywhere into the basement. And then luckily, we do have, you know, a guy who. We know a guy who can pump water out of the basement, and that was the start. But like I said, it taught me about definitely going and turning off the water and being aware of, like, the frozen pipe situation, you know, in terms of got to make sure the furnace is working at these places if they're sitting and stuff like that. And also kind of taught me that, for the most part, like, everything is fixable because this was awful and completely blew our budget. But it wasn't unfixable. There was stuff you could do. You know, you replace the drywall, you replace the lights, you replace the. Basically everything. And. But you do have this. You know, you don't have to knock the house down.

Right?

Of course it can be saved, But. But that was a good, you know, kind of a teachable moment, I guess.

Yeah. I remember when I walked through that property, I think I was with you. And I looked up, and one of the. The light fixtures was filled with water, brown water. And I'm like, oh, gosh. Oh, gosh, that's gonna be taken down.

Yeah.

Yeah, it's that property. You guys did an amazing job on that property. But you're right, absolutely right, is it can be fixed, and it may not.

Be fun, and it's gonna take a lot of work and a lot of, you know, a lot of time sometimes. But, I mean, I think we have a tenant in there now, so. And it is. It's a nice little property.

Oh, yeah. Yeah, it is very nice. I actually think I posted that one on Bulldog Renovations, Facebook and Instagram. Also put. If you're watching this on YouTube, I'll put some pictures up in the video of it as well. But certainly, going into any rehab, you never know 100% what you're getting yourself into until you actually get in there and you start doing work.

Yes, that is very true. I mean, we had another one. I wouldn't say it was a nightmare, but it was very costly. Where, yes, the floors seemed a little uneven, but we didn't know until there was a buyer who got their own inspection that, okay, this foundation needed, you know, to be just kind of mitigated, I guess you would call it. So, again, it was fixable. Don't have to knock the house down. Don't have to start over. But it was costly.

Right.

So. And now I think that house is under contract again. So crossing our fingers yeah, that. That goes through.

Yeah. That's another thing, too. Like I said, I'm not really as involved with Bulldog as far as the renovations process and everything goes, but I know I've done quite a bit of research myself on renovations and everything, and is when you are creating a budget, leave room in the budget for the unexpected.

Right.

I mean, in the case of the five Foot Water property, you can't. That's not something that you would probably have left that much room in the budget for. But like you said, things happen and.

You make it work. Right, Exactly. And, yeah, you can have your contingency plan, but, you know, that should have been an easy rehab, and it was just kind of a. Not a natural disaster, but a unforeseen, you know, thing that happened.

Absolutely.

Yeah. I would say, too, in terms of, you know, since we're still going on. On nightmares or rehab horror stories when we first got into the apartments, and I. I know the apartments have probably been a theme of many podcasts.

Yeah.

And blogs that. There were some of those where, yes, you set the budget. Most of them, probably 90% of them adhere to that budget. But again, there were things that you could not have predicted.

Right.

We had a lot of issues there. Well, there had been a lot of deferred maintenance there, so we had a lot of issues there with old plumbing leaks, you know, that we thought we addressed. But then until a tenant actually got in there and maybe moved in upstairs, you didn't know what was happening in the unit downstairs. A lot of issues with bugs in that place, you know, and it was, I think, just the season, you know, spring, summer, whatever. I said, oh, I can't wait for the first hard frost so we can stop having to deal with fleas. The summer was so much of fleas.

Yeah.

You know, I would carry bug spray in my car and, like, spray my legs down before I would go into a new property. No, seriously.

No, I know.

Or they would be. I mean, it's gross to say, but they would be like jumping off of your pants. And that's. You know, I have two dogs at home. I don't want to bring that home to them.

Right, of course.

Yeah. But, yeah, it was kind of the summer of bugs and the summer of drains.

Yeah.

But again, we learned through that we had probably three consecutive drain problems of houses that we had recently finished the rehab on. And unfortunately, I think in all three cases, there were already residents in there, so that made it more challenging to fix the drain.

Yeah.

So we have started now. We've Partnered up with a company that does a drain cleaning, and then it will do a scope for us with a video camera, and it'll put it on a flash drive for us. So that has really helped because we probably have, you know, maybe one out of eight houses that'll have some kind of a problem, and sometimes it's a huge, expensive problem. But I guess if there's any silver lining, it's that at least there's no tenant in there that we're displacing or is living in such a condition that, you know, you just wouldn't want to see.

Right. Yeah. And you're getting it at the very beginning. Yeah. I think that's. I feel like that's a huge thing to point out for bdr the past year is it has been not only a learning 12 months, but a growing 12 months, and we have grown so much, and we have learned so much. Like what you were saying with the scoping the drains, that I feel like ever since we started doing that has been a huge game changer for us for the better. And it's. I think it's been working out pretty well. I know my house needs to get the drains scooped.

Well. And it's scary a little bit because you're like, what are they going to find? I mean, every time you take that chance that there's going to be something wrong, and these are old houses, but you can't just. You can't just stick your head in the ground, you know?

Right.

You have to know what's going on. And you owe that. We owe that to our tenants, and we owe it to our investors to be presenting them with a property that we can kind of say, we've checked this. We know, you know, that it's. That it's good.

Yeah, absolutely. And I wonder, too, how many other providers are doing. Going to this extent that we are now doing to provide the utmost quality that we can provide.

Yeah. So, yeah, I don't know, because I'm not, you know.

Yeah.

I'm pretty new to the business, but I'm glad that we're doing it because, like I said, we just had. It just hit us when we had these. These problems, you know, bam, bam, bam in a row. And we're like, we can't, you know, we can't put the. We can't put our investors through this. We want them to buy more houses from us. So this is a way to, you know, let them know that we're doing our due diligence and we're doing everything we can to, you know, present them with a. A good investment, one that is going to pay off for them and not be a headache and a frustration and, oh, my gosh, I'm going to have to spend how much money on this, you know.

Yeah.

And I don't have a tenant in there, you know, that's. That's a bad combination.

I think also this conversation reminded me of how we were talking about growing and learning. I think it was actually brought up in the bamboo meeting that we had earlier today, the blue tape inspection.

So we.

That was what we used to call our quality assurance. And personally, since I've been here, I've noticed we no longer call it blue tape inspection. Now you just call it QA inspection.

Right.

And I feel like that alone has changed drastically. I feel like before worked, but not to the extent that we needed it to work, and it kind of felt partially done, if you will. And now I feel like it's a lot more thorough and there's a much clearer process and it. We are having a much quicker turnover, or not turnover, but time frame of getting the QA inspection done and actually getting the repairs done.

Yeah, Well, I think sometimes it's crazy, but, like, the hardest part is that last 2% of getting those houses finished. You know, okay, it's 98% complete, it's contractor complete, but it still needs this or this or this. Right. And it's nice that our, you know, the. The gentleman who does the inspections for us for Bulldog, worked for an inspection company, so he knows what he's looking for in terms of safety and functionality and the like. And then we have a representative from our property management company go in and do an inspection as well, because she knows if I have to rent this to, you know, my girlfriend or my sister or my uncle, you know, these are the things that I would not want them to have to deal with. You know, the door doesn't close. Right. Or there's this or there's that. And I know that then us getting all that finished before someone moves in just starts everything off on the right foot and prevents, you know, work orders in the future. At least that's the hope. That's the theory.

And I feel like ever since we've started doing that, we have been getting less work orders and less feedback on it, which is what, ideally we are wanting. Whereas before kind of talking about the nightmare part of it, it felt like we were constantly going back and then we would get a tenant in place and then it was like work order after work order. For three certain things, minor things.

Right.

And now that we have changed that processed process, it has been going a lot better. I feel like we're not getting nearly as many work orders.

No, that's good. That's the goal.

Right.

Sometimes it takes a little longer, you know, on the front end then. But I think it's probably worth it to absolutely do it right and, you know, not have the issues after it's. It's. After it's been turned over, basically.

Yeah, for sure. 100%.

Yeah.

Well, do you have anything else you want to talk about?

I don't think so.

I don't either. All right, well, that's all that we have for you guys today on Real Talk, which is real talk for real estate investors. And we always end it with invest.

Smart and live happy.

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