I bought another property a few years ago that had some interesting tenants. The local police called it the compound. This property consisted of three houses and a commercial building that was being used as an auto repair shop. All the houses were occupied when I bought the property. The place was for sale for a long time because the tenants were not paying much and it was in rough shape. There was also some concern if the city would let you keep the houses. Because of these issues, I was able to buy it for $410,000 when the worst houses in the area were selling for $200k. My plan was to get all the tenants out, rehab the property, and re-rent it which I did, but with a lot of drama along the way.
This is part 4 of this series.
Details on the mixed-use property
One of the reasons the property was cheap is that it was in a special zoning district for the city and the real estate agent who had it listed said the city wanted everything torn down. It was currently considered a mixed-use property because it has commercial and residential units. I got the property under contract but had some time to talk to the city before I was fully committed. I had a meeting with the town planners and they brought the police as well. It turns out they did not want the property torn down but they wanted it to be developed at some point. I could keep all the houses but at that meeting, they brought the police because the property had some other issues.
The police told me they called the property “the compound” because there was so much crime there. They had a sheet showing all the calls they had over the last couple of years, I should say a couple of sheets. I think there were 24 police interactions in two years or something ridiculous on the property. The police also told me they thought the auto repair shop was a chop shop (where stolen cars are parted out). Even though it had a few issues I decided to move forward with the purchase.
A video of the property is below:
How did we get the tenants out?
I wanted to clean the place up and the houses needed a lot of work. It is almost impossible to remodel a property with tenants living there. We also found out that while the previous owner said the tenants were paying from $500 to $600 a month in rent, none of them were actually paying. They were all related to the seller or friends of the seller and were pretty much living for free. They were surprised when the seller sold the property and were more surprised when I said they had to pay rent.
I try to avoid evictions since those cost money and time and it is hard on both parties. I offered cash for keys to the tenants which means we pay them to move out. I offered $500 to all three tenants if they could move out in 30 days. Two of the tenants accepted and moved out. The police had told me to be very careful with the people living in those houses but I never had any issues and they were super nice to me.
The last house would not take the cash for keys but said they would pay rent. What happened for the next three months was they paid about $200 in rent and that was it. They kept promising to pay but never did. We told them we could still offer them the cash-for-keys deal but they stopped responding to us. We decided we needed to evict them even though it was 2020 when most evictions were illegal. What allowed us to complete the eviction was the copious amount of things they had in the yard and the city that kept fining us for all those things.
Evicting tenants in 2020 during covid
We filed for the eviction for nonpayment of rent and it was in progress when Covid hit. They canceled our eviction as they did all eviction and we had no idea what to do. We waited for a month or so when more rules started to come about regarding the eviction moratorium and how it worked. I noticed something in those rules.
My lawyer told me that we could not evict. However, I read a lot about these things and I knew exactly what the moratoriums said which was “you couldn’t evict for nonpayment of rent”. You could evict for other reasons like code violations. I told my lawyer this and he said that just might work. We filed for the eviction with the courts and I think we had one of the first evictions approved in our area or maybe the state of Colorado after the covid shutdowns.
When we posted the eviction notice the tenants found their phone that they must have lost and started calling us. They said they would start paying rent and they needed to stay. I told them the issue was not just the rent but everything that was on the property. The tenants had campers, a semi, cars, and junk all over. They had 10 days to move enough things to avoid code violations in order to stop the eviction. However, they seemed to bring more stuff in rather than move anything.
The eviction was scheduled after the 10 days passed and the sheriff scheduled it a couple of weeks later. I am on good terms with the deputy who does eviction and they could not believe we got one approved. Eviction day came and the tenants started to move some things from the house but the property was still trashed.
Eviction day and murderer
The tenants were at the property with about 7 other people with a moving truck. We couldn’t see much moving being done. The sheriff went up to the property and told the tenants the eviction was today. The tenant said they just needed one more week to move everything and to please delay the eviction. They had already had months to move stuff and moved nothing so I knew this was not going to happen. They said they were moving to Texas and just needed a little more time. We proceeded with the eviction and again we had a lot of guys staring at us while we moved their stuff out. I went in the house first with the sheriff’s deputy and a pit bull greeted me right away. Luckily it was nice but that scared me just a touch.
I was not too worried about the guys there because the deputies were there and we had 10 people for the eviction. Some of my crew speaks Spanish and the tenant’s friends were saying all kinds of nice things about me in Spanish. Then the sheriff’s deputies told me something crazy!
During the move out the deputies said that a murder suspect had been arrested here a few weeks prior to the eviction. He had been accused of murdering an ex-real estate agent who I had known a little bit and another lady. I had known the story very well and read that he was arrested somewhere else in the newspaper but they insisted they arrested him here. They said he was living in a camper shell behind one of the other houses. I had driven by that camper many times and we assumed someone was living there because they had an electric cord running to the house. I wasn’t really scared in this situation but I guess I should have been!
We completed the eviction of the house but gave the tenants another week to get the stuff outside. They actually got most of it and moved it across the street next to the railroad tracks. They stayed there until the city kicked them out a few weeks later. Then they moved it all to a vacant lot across town and they stayed there for a few weeks until they were kicked out and we never saw them again.
On a side note, the police kept telling me the auto repair shop was a chop shop. But I talked to those guys all the time and I have no doubt they were legit and not a chop shop. Maybe there was another business there before that was. The city eventually made us kick out the auto repair shop because that business did not meet their special zoning district. The suspected murderer who may have been caught at the property was convicted and sentenced to two life sentences.