Updates on Our BIGGEST Investment TO DATE | 56 Unit Apt + 15 SFRs | Real Estate Investing | EP 8

Foreign. Hey, everyone, Flip and Danny here, co founders of Freedom Real Estate Group, family of companies.

Now, today is episode eight of our vlog.

I was about to say, am I supposed to go eight? You're welcome.

You're welcome. And again, the series is intended to be a day in the life of the Freedom Real estate Group family of companies and team members. And today is part dos of our apartment series.

That's right. And you're gonna see here that we actually have cheat sheets because this is a big story about what's been going on in our apartment. So we didn't want to make sure that. We wanted to make sure that we didn't miss a beat. So last week we stood in front of the apartments and started our story for you. Today we're gonna get you fully up to date of where we're at. Now. We started off talking about tenant evaluation. I believe that's where you started finding the good tenants versus the bad tenants. So one of the ways that we did that strategically was through pest control. We needed to treat all the departments for pest control. So our property management company put notices on the door, quite a few, to prep and teach everybody the guidelines of what they had to do for pest control. And we knew that there were going to be some non compliant tenants. What did that tell us? Get them out of here. So that was where we started.

Non compliant.

I like that.

Bad tenants. Well, again, through this process, we've gone through two waves of evictions, and we are now on wave three. And we just received word that we will have court dates for eight more units in the next two weeks. Now, as far as our progress in finding the good tenants, it's getting easier. And we just posted numerous notices last Friday to engage in conversation with all the remaining tenants in order to determine how we will move forward with those who have passed the test so far.

And that's an important step. And we'll talk about that again. So here's really why we need all these papers. This is the meat of the story. You guys ready? So we started off at closing with the wrong keys. So we tried to figure out, why do we have all the wrong keys? And it turns out the previous seller's supervisor, his name, I'm going to call him Jacob. That's not his real name, but he's the one that delivered the keys to the closing office. They weren't the right keys. And so we wanted to figure out why. So we found out through talking to a lot of the tenants at the property that Jacob was a Drug dealer. And we heard a lot, whole lot more. So before I go into that, I want to say that we did a lot of due diligence on this property. We told you that we closed in two weeks. So it was quick due diligence. But we went through every single unit on this property, and Jacob was the one that was showing us. We didn't see a whole lot of signs. Did we see there were bad tenants? Yes. You go into any apartment complex, you're going to have bad tenants, depending on the past landlord and how they were managing everything. So that didn't scare us at all. But now that we know he's a drug dealer and he's in charge of maintenance, leasing, property management, and this owner never went to the property at all. So we're like, okay, he just gave us the wrong keys. Was this strategic on his part on purpose? What else is going to happen as a result of this. This guy? So we find out from the tenants that he's a drug dealer. We also start finding out that he would get people who were in rehab, drug rehab. And as they came out, he would get them a place. He would lease up a property. One of the units at the apartments complex, he would get them back on drugs, and he would sell them drugs. He would also get tenants into the property that were collecting Social Security and say, if you give me your Social Security check, then I will provide housing and food for you. And then he would apply them to subsidies who would essentially bring in the rent. So there was just this huge, huge racket going on. And we're just starting to find out all this, and we're just like, oh, my gosh, what did we get ourselves into? So as a result, many of the tenants here will be likely transitioned out of the property. And that's kind of where that story was going. And that's why we've gone through the two phases of eviction so quickly. We immediately knew who a bunch of them were. These pest evictions are telling us who some of the next ones are. They're on the next wave. We will probably have one or two waves after this. But we are still trying to engage in conversations with the tenants to see if there's some good apples there.

Yeah. So like she said, the first and second wave was the toughest. Definitely. The tenants would let other evicted tenants back in. They would see they were climbing the windows. They would squat in the laundry area, even the common areas, or they would just simply kick in the doors. Then we found out, because we're trying to figure out how they're getting into the property. They would go up the stairwell and go into the attic access, go through the attic, and then back down into the units. And there was just drug needles everywhere.

And that was one of the longest things that took us to figure out, was that attic access somebody. We had simplisafe alarms in every single vacant unit. And we. We didn't have motion detectors up at that point in time. Somebody got in the unit. They were squatting. They just trashed the unit, right? And we're like, why didn't it go off? We were so confused. So everybody was on the watch trying to figure out, how are these guys getting in and how are they not setting off our alarms? Because we had those little door triggers and window triggers. And so we said, let's put a motion sensor in there. And I don't even think that that worked. I can't even remember the whole story. But ultimately, one of the contractors said, okay, I figured it out. Attic access. They're climbing up through that and going in and dropping down. We're like, holy crud. All right, I need to get back on script. So one week on our property walks, we walked in on the squatters who had been doing drugs. One of them, anyway. There was actually three people in the property, A male and two females. So we called the police. They came out, they met me. I told them that this was now our property. They were thankful that they were new owners. And they said that this has been a drug and homeless seen for a very long time. So I told them about Jacob. And as the conversation continued, they were very, very honest. And they simply said, look, I'm just going to be very honest with you. The jails are full. There's not a lot that we can do. We're going to come out, we're going to help you, and we're going to get these off the guys off the property, but that's about all that we can do. And so I started talking to them about the alarms, and I'm like, okay, so help me out. How do we keep these guys out of here? And how do we clean this place up? And so we had strategically talked about the alarms, about how if I kept them on silent, and the police could come and they could get them. And I was, well, the jails are full. They're not going to arrest them anyway, so what's the point? So they ultimately said, hey, just keep the sirens on. And as they hear those sirens, they're going to essentially, you know, go away. So that's what we ended up doing there. We talked about a bunch of other different strategies. I did at that point in time, remember the 200 unit complex that I pointed to? And we, I think, showed a picture of it. Right. So I said, hey, right there, one block away. Look at that complex. Have you. Have you guys been there? Is that a problem complex? And they said, no, neither of us have been there. And I was like, yes. Okay, so now there's hope. And that was what made me so happy. There's hope that one block away, there's a 200 unit complex that's not having any issues. We can clean this place up. So I got super, super excited. We ended up starting changing all the locks. We boarded up the windows and the attic access. We put alarms in every vacant unit. And over the course of a few weeks, those steps are what stopped all the traffic. We get. You get good news in our Slack system all the time going, hey, look at this place. It's so cleaned up. There's not a bunch of people running around. So. And then let's get back to Jacob real quick. He had a Bailiff set out the 7th of January, so he's gone, but he still peeks in there every now and then, combing through people's mails, probably picking up those Social Security checks, I would imagine, Right?

Oh, my goodness. So what we still have left to do, we're re keying all of the exterior doors. We are installing a camera system. Like you just said, we're aggressively rehabbing units to get new tenants in the door. And we'll be rehabbing the laundry areas. And as you know from last week's video, we're also renaming the apartments and getting a new sign.

I'm excited.

Manchester Meadows.

Yeah. Where's your ideas? Geez. All right. So the place is looking so much better. Even the tenants are out there and they're saying thank you. They're helping pick up trash. We ordered pizza for some of the tenants that have just been helping us out. So it's really, really great. Here's our goal. So we want to rehab as many units as we can by June 1st and get the good tenants in the door who pay market rent and will cover their own Utilities. By July 1, we want to be at 90% occupancy. And after that, we're only going to rehab four units at any given time to keep that ratio.

So by October 1st, our goal is to refinance and cash out all of our private money partners.

Yes.

Now, from there, we'll see what these apartments have in store. Now, we could keep them and take the cash flow, which is our current plan. Or we could sell just whenever the time is right. Obviously, the market has to be right, and pour the profit into our next deal.

Yes.

So doesn't real estate give you the craziest stories? This is usually when our investors say, boy, I'm glad I'm working, working with you guys. You guys get to deal with all this. But that, you know what? That's what we love. So we know you like these videos short and sweet. So that's going to wrap it up for today. We hope to see you on the next video. See you later.

Bye.