Today, I want to tell you a personal story of how I allowed myself to be taken advantage of. Now I am not proud of myself for letting this happen, but I hope that you can use it to ensure that you don’t suffer the same fate. We all know how important is to get your real estate deals in writing, but at times in the past, I didn’t do it.
So the story goes like this, I was managing a property for a friend of mine, and he referred one of his friends to me to manage another property. This was good for me, a very nice home in a nice part of town that would fetch some good rent, and consequently a good management fee for me. I met with the owners, they were very laid back, so I decided to go ahead and do the deal, and not put anything down on paper with the owners.
Now I did get a contract with the tenants when they came on board. So there was a contract between my company and the tenants, but no written agreement between my company and the owners. Everything went along pretty smoothly for about a year, when the contract with the tenant expired.
At that time, I received a letter from the owners saying they were cancelling my contract. I further learned that the tenants had no intention of leaving the property, it’s just that the owners were cutting me out of the deal. Because we didn’t have anything in writing, they assumed they could cut me out at the end of the tenants initial contract period.
When I confronted them and the tenants on the issue, I learned that the owners and tenants were talking to each other, without me being involved! So basically, they had decided to remove me, and continue on with the tenancy. What’s worse, is that there were no apologies or attempts to compensate me for the work I had done (past the management fees I had already collected). Further, the tenants reversed their last rent payment to me, just after I had sent the money to the owners!
So I was out a months rent on the property, and had to fight the owners for my money. It was a terrible time for me, and I really needed the money at the time it happened.
Needless to say, the moral of the story is, it really doesn’t matter how well you know or trust someone, if you aren’t in the power position, you better have that real estate deal in writing, because there are many vicious snakes out there waiting to devour you!
Do you have any thoughts on this, or perhaps a story of your own? Please leave it for me in the comment section below, I’d love to hear and help you in any way I can.