Craziest squatter stories - how we got creative in getting rid of them

All right, hello and welcome back to Multifamily Strategy Live. Uh, talking about a fun topic today. So this week I found the show Squatters, uh, in the last week, and I posted a couple of things from that show and a couple of episodes from my own portfolio where we have both legally and illegally, uh, evicted squatters. So I figured there was nothing better to do than to go live and talk about this exact topic since that's what so many people have been asking questions about this week. So today I'm actually going to be sharing live, uh, stories of actual things that have happened to us as landlords dealing with squatters. So whether you love landlords or you hate landlords, uh, there's something in here for everyone. So I'm going to start with a few of the craziest stories you ran into. First of all, starting with my friend Lika, and then I'll go into my portfolio. So she's a fellow Seattle investor. In her portfolio, she had one of the wildest things ever in Seattle. We actually ended up in the same news article together for crazy squatter situations. In her portfolio, she actually had a, uh, a group of, uh, content creators, we'll call them. Uh, it's a bunch of OnlyFans models who installed a stripper pole in her Airbnb, took over it, and it took her months to get them out. So they turned the whole thing into a studio. They actually cut through her floor for I don't know what, uh, project. Absolutely destroyed the house. Took her months to get them out. Uh, this is not uncommon where I'm from in Seattle, where you just get wild, wild squatter scenarios. Now, the craziest ones for us, uh, I, I'm gonna start in order of most intense, but some of these are also equally crazy. Uh, we bought a hotel that we were converting. This is in Moses Lake, Washington, center of Washington state, where we just picked it up, 20 units downtown, uh, needed a little bit of renovation but just had no management plan at all. So So our design was, hey, this is— we're gonna turn this into much-needed studio affordable multifamily units. So we finished most of the renovation and we keep getting people in units, just random drugged-out people in our building. We cannot figure out where they're coming in from. Uh, turns out a group of the homeless heard that we were taking over their favorite building to squat in. They would kick out the ACs, which all sat underneath the windows, there's a built-in section for them. It was just big enough for you to shimmy on through if you kick out the AC. So what was happening repetitively is people were breaking in, they're getting into the main office, uh, they— it was absolute disaster. But we actually had 20, about 20 units all with squatters in them all at the same time. Uh, how we solved that one was actually very unique. It self-resolved, uh, because the building actually flooded, which got everyone out of there. My partner, who happened to be a real estate developer in that deal, said, hey, look, I'm going to rebuild this building. Um, if you guys don't want to be along for the ride, I'm happy just to buy you guys out of the LLC, and I'll take on the— I'll take on the headaches of the flooded building because this works just fine for my business plan. Uh, so worst thing that can happen, uh, total loss of building. Turns out we had the right partner on that deal who'd actually made a lot of money from the building falling apart. Uh, but that was a cheat In getting the squatters out, we had a fortunate for us situation, uh, where it was just a building maintenance. Uh, we had the coldest winter in 50 years in Central Washington. Uh, one pipe froze, which caused cascading issues all the way down the line. It destroyed our heat pumps, so toilets were just exploding in the upper floor. It was a, uh, a worst-case scenario for most that ended up being that the total destruction of the building in the winter, uh, was exactly what they needed to get the proof to redevelop that project. And, uh, for my business partner at the time, Cody Davis, and I. That was a, uh, get out of jail free card for the worst squatter situation that we had. Uh, one of my favorite stories to tell, and so we'll keep this, uh, we'll keep this between us on this live, but, uh, we're going out to the properties. This is in Seattle, or technically in Tukwila. So this is basically just, just, just, just outside of Seattle in the main metroplex in Washington state. We have a 7-unit We just renovated a unit, and so it's new carpet, new walls. We actually came in and tiled the showers. Uh, we found like really cool marble tiles. So like we did a really good renovation on a really truly awesome building. We renovate the building, and as we finish, lockbox goes on the door, everything. They break the lockbox off, they pick the lock, They moved in couches, they hung artwork, they— all the drawers, you know, the closet had all their clothes nicely organized. Uh, they broke in and completely moved in. This all happened within 24 hours. So I go out to the property and lo and behold, my key doesn't work. They've swapped the key. You can't do this. This is in Washington State, and I believe anywhere in the country. Is called a self-help eviction. You can't do these, uh, but what we did— set up a camera across the way. As soon as we see them leave, we came in and I threw out all of their stuff, including— I found their ID in there, uh, we took all of it, pitched all of it in different trash cans all across the city. I was like, you guys are not finding a single thing that you stuck in my building. Uh, we then came in and replaced the locks and for good measure coordinated with a buddy to have a lease for the unit so that if they tried to come back, we actually had a real tenant with a real lease who could enforce that lease. You are not allowed to break into a unit in Washington State because of something called squatters' rights. Now, I have yet to figure out— and so someone in the chat can explain this to me— how the words squatter and rights go together in the same sentence, because it makes no sense to me whatsoever. Uh, how someone breaking into a building can instantly have any sort of rights or be covered by law, I have absolutely no clue. So if you are trying to, uh, if someone can explain squatters' rights to me, I massively appreciate it. Uh, but in Washington State, if someone breaks into your building, you apparently cannot break in behind them and throw out their stuff, even if yesterday you were inside the building renovating it. If the police were to come in this situation, just in case you're curious how this actually plays out, if the police were to come in this particular situation, it would be a civil issue. They would claim— and this is why they brought in the couches and the pictures and their toothbrush and their clothes in the closet— if a police officer came and I said, hey, I was in here renovating yesterday, they go to the building, the tenant would have claimed— tenant, the squatter would have claimed, oh no, I've been here for months and months and months. Uh, look at— I'm all set up in here. You can see my furniture. This has been— this is my home. The police would then say, hey, this is a civil issue, and immediately I have to prove in Washington state court, to the tune of about $5,000 of legal fees, that the person who's living in that unit is not supposed to be there. In that time, I am also, by Washington state law, required to house them for free in the 2 to 3 month period it takes to actually process and get our court date to get them out of there. After that, it usually takes about 2 weeks to schedule the police to actually come out and remove them after we win the eviction of the unlawful, uh, habitation of unit. There's a different word for it, but the actual process to do this, it doesn't make any sense to me. So, uh, that's, that's one where we had to, uh, we have to take matters into our own hands. Another squatter situation. We did yet another hotel conversion because the first one, uh, wasn't painful enough. We went, hey, let's look, there's a 30-unit also downtown Moses Lake. Pick this up. I still own this one today. Uh, so this was a successful project. I just posted it to my Instagram so you guys can see it. I think I posted it on Shores Facebook as well. Um, it used to be years before we bought it, there were competing, uh, there were competing drug lords on either side of the building. And so it was a dangerous property. Now, One of them had moved out. We got the other one out, and we painted the building, put new exterior lights, uh, new floors, new electric, added laundry rooms. There was a super nasty old pool there. We filled that, turned it into a community garden. So I mean, we turned around the property. However, the prior homeless who were squatting there were not a big fan of that. So, uh, not only did we do the thing where we had to break into a couple units and just chunk all the stuff because I don't know why there was stuff in there. Not supposed to be any tenants. Uh, not only do we do that, but I actually just posted a video of this. Uh, there was actually a, uh, tenant or a homeless person coordinated raid on our building where they actually grabbed garbage, uh, brought in like, uh, pallets, like shipping pallets, built ladders out of them and tried to raid the second story of our building while our crews were renovating there. Now obviously, uh, we weren't big fans of that and happened to be in town at the time. Uh, but for context of like the worst that you can deal with, if you're doing a heavy lift on a property, this is something that can actually happen. Uh, Luke Devine in the chat here on Instagram said, bought a duplex in Bethlehem, Pennsylvania. Any advice on, uh, tenants subleasing? It's been operating as a 3-unit. My first question, Luke, um, are your tenants supposed to be subleasing? Is that something that you've approved? Because my advice will be different either way. So I'll start answering the question, but I will look for the— I'll look for more context. Um, so if you have, uh, tenants that are subleasing— this actually ties right into today's topic— uh, subleasing tenants can become the squatters. In fact, this happened, uh, in a video I posted on my Instagram recently, uh, where someone was renting to their son, they passed away, and their son's like, oh, this is my dad's house. And then 9 months later, there's still a guy living in someone else's property rent-free. Um, so you need to be really careful with subleasing. Um, I typically do not allow it. Many of my properties— I have a handful of light tech properties where you can't legally do that, um, but I usually don't allow subleases. There are sometimes roommate situations, but everyone who lives in a unit must be named on the lease. I do not want people who I don't know in my building. And this is the big thing, uh, that I would caution you, Luke, if you choose to allow subleasing of units, you need to have the ability to vet those people. What I do not want happening to your little duplex is you have a nice family on one side. On the other side, you have a guy who passes all your background checks. He then leases to a child sex offender. I'm just talking worst case scenario. I know it's not, you know, a little dark, uh, but this is something that I actually deal with. Like, I see a lot of applications. We house over 1,000 people. You see these on people's background checks. If they lease to someone who you wouldn't lease to You now have the problem of you have a pedophile on one side of your building and a family on the other side of your building. Worst case scenario, but I'm just laying it out. That is what you are trying to engineer your leasing to prevent. So make sure that that doesn't happen. Um, so I would, okay, so there's no subleasing stipulations on the inherited lease. I would renew. I don't believe in Pennsylvania. I don't believe you double check this, but I do not believe that there is an implied consent to sublease your unit. I do believe that you need to get permission to do that. In most leases, the verbiage— you can't just bring new people into your unit. I'd be very, very surprised if they can just add as many humans as they want. I, I don't believe they can do that. Um, double check. I haven't rented personally in Pennsylvania. Lots of mentees— you, Phil— the lots of people in the program have done this. Uh, but keep an eye on it. That would be my overall advice though. Um, I would not allow subleasing. If you do allow subleasing, strict rules and spell them out. What you likely have is a lease that is not specific enough, uh, which is a problem. By the way, uh, YouTube, you guys can answer questions as well. I can toss them up on the screen here on YouTube, on Instagram. Uh, I see both screens right here, so I've ever looked like I'm looking slightly off camera my 3 cameras are all set up across the front here. All right, I saw a couple of other questions here that I do want to get to for Instagram. Can they produce a bill of cable, water, name on? Oh yes, so that is one of the things. So in some states, the police will actually ask for like a lease and do some due diligence. In Washington State, I have never worked in any city where the police will actually check anything. If they say that they live there, that is enough. To shut down the whole process. You must go to court, which is super lame. In state of Texas, yeah, you would have to— if you claimed you lived there, they would ask for a lease, they would ask for bills in your name. Uh, the police will actually do a little bit of due diligence. In Washington state— and I'm not blaming the police in Washington state, by the way, just to be clear, uh, that is Washington state law. The police are hamstrung on actually doing anything. It is not their fault. Officers in Washington State, we appreciate the hard work you do, and I, uh, I feel for you because there's a lot of situations where they are not allowed to act. Uh, there was a while during COVID where they could not, uh, they could not actually pursue anyone if they committed a heinous crime. Um, I won't mention the specific crimes that can happen because I'll probably get some sort of a strike on, on YouTube here, but you could do basically anything And if the police do not witness it, they will not pursue. There was a whole time during COVID where that was, that was an actual thing. So Washington State has some really rough laws, and we're not the only state. It just happens to be one of the worst landlord-tenant laws in the country. Squatters' rights falls right into that. I've actually had issues at the Robin Hood Village Resort. I had a, uh, actual contract with a staff member, and it's not a tenant. It is what's called, uh, work camping. So they are given a, a mobile home that I own, and it is tied to their employment contract. So their employment contract says they have 3 days to vacate if their employment is terminated or they cancel— or what is that, cancel? Resign. I cancel my work. You know what I'm talking about. So I, uh, there's a couple. I fired one, the other one quit, which, you know, foreseeable. Then they decided, no, we just decided that we live at your resort in your hotel now. Now one would think commercial property, not multifamily, not single family. We're not a housing institution. This is a hotel. We should be fine. The police are like, nope. They said they lived here for over 30 days. I'm like, oh heck yeah, they did. They're, they're, they have a job here. They no longer have that job. Here is their contract where they signed that they will leave within 3 days of termination. Please have us go all the way through the court process. Now fortunately, we settled with them partway through that process for less than my legal fees would have been, but I had to pay them to leave a commercial hotel in Washington State. The police did not ask nor care that we had a contract. They didn't need to see a lease, they didn't need to see utility bill, they just said nope. They claimed that they live in your hotel, therefore you must prove in court. We're not doing jack. Very frustrating. And then people are like, why did you move to Texas? I'm like, well, let me, let me tell you. Problems like those. Uh, we've had several other minor squatter events, but we've seen it in a hotel, we've seen it in hotel conversions, I've seen it in multi-family, I've seen it in newly renovated buildings, I've seen it in beat-up buildings. Uh, some of the worst squatters are in the nicest buildings, so you are not immune to someone taking over your property. That first example I gave earlier where, uh, Alejka had her big Airbnb and they took it over and turned it into an OnlyFans content creation house— it took her a long time to get law enforcement to remove those individuals, and they did a lot of modifications to her beautiful property. That was an expensive property and a nice Airbnb. The level of your property doesn't matter. This can happen to literally Anyone. So watch out for it. This is part of why landlords, uh, do actually have to occasionally make some money, because, uh, somewhere along the way you may have to deal with situations like these, and they can absolutely suck. So I hope this helps. Luke, congratulations on your duplex. Uh, clean up those leases over the next 2 months. It sounds like you're well on your way. And Luke, I know that you have my personal cell number, so if there's any help that I can give you on that leasing, you just let me know. I am more than happy, to dive in and give you a hand. Uh, for everyone else, at, uh, so right now it is, uh, 5:19. Uh, I am running a webinar live, so you can ask questions. I'm going to run a full thing on how we are doing finding a deal, negotiating the deals, the funding, the, the whole nine yards. 90 minutes, totally free. If you want to learn more about how to do this, I'm going to be going live. I go to multifamilystrategy.com workshop. So multifamilystrategy.com/workshop, you can register there. It is actually live, and to prove it's live, I will actually have the chat up on my screen throughout, and I will be answering the live questions that you have. Uh, every time I say this, people don't believe me that I'm doing a live webinar. I will prove it to you because you'll ask a question, and then I'll answer the question. You'll be like, oh my gosh, and it happens every single time. So, uh, not a marketing scheme, uh, this is actually What's the most common question I get? How do you buy all the rentals? I like to solve that on Wednesdays. That'll be at 7:15 Central, so that's in about 2 hours from now. I will dive in, go live there. Would love to see as many of you there as would like to learn how to buy real estate with or without money. Squatters can be a huge problem. However, if you don't have any buildings, you can't make any money solving these problems. I have a lot of fun with this, and it's part— the adventure of solving these— while the, the problems are frustrating, the adventure is actually quite fun. It's very rewarding to actually solve these problems. So hope you enjoyed this episode. I will see you guys next Wednesday, or perhaps later tonight. Multifamilystrategy.com/workshop, totally free. I'll see you there.