Real Estate Mistakes #4

Hi, I'm martial arts master Bill FitzPatrick and this is Real Estate Investing Mistakes #4

Don't piss off the building inspector

In my investment area, there was a building inspector and he was a jerk

No one like him,

still HE was the building inspector and I tried to be friendly

But, this guy WASN 'T friendly

So I tried to stay out of his way

This was NOT always possible

I owned a 5 family house and received a letter from the building inspector - his name was FRED

The letter said that according to town records

my building was only a legal 3 -family

What could I do? Take out two apartments - that was NUTS

I went to the building inspector, Fred,

and argued that my property had been 5 units for many years.

Fred shrugged. He didn't care.

Fred only cared what his DAMN paperwork

My lawyer told me that I could present two letters from senior citizens who would swear that the building was a 5-family before 1957 - the first year of town zoning

I had to find really, really old citizens to sign my affidavits

I bought a couple of boxes of candy and got my signatures.

I went back to the Fred - thinking he'd be happy

He looked at the letters

Steam was coming out of his ears

He didn't say a word or look at me

He threw the letters on his secretary's desk and shouted, "Files these."

OK, I won

Well, at least temporarily,

Again, if you are a LOCAL real estate investor,

you DON 'T want to piss off the LOCAL building inspector.

Don't piss off, Fred

OK, I won. Again, Bill, SHUT UP

I heard of several other landlords who had received similar letters from the building inspector.

I told them about getting signatures from senior citizens and they did the same thing -

Candy to seniors for signatures

These other landlords loved me - I was a savior - a genius

Of course, I also heard that I had made myself a mortal ENEMY of Fred.

I was young - I guess the word is "arrogant" -

I won - he lost -

But, I didn't get the last laugh

A year later, I had the opportunity to buy a large commercial property

It was an older three-story building

with good tenants on the first and second floor.

The third floor was abandoned.

In fact, the abandoned third floor was NOT rentable -

it needed new floors, windows, electrical, plumbing, everything

Repairing and upgrading the third floor would cost a LOT of money -

much MORE than I had or could borrow.

I went to Fred to ask for a reasonable amount of time.

Without a smile,

Fred told me that if I planned on buying the property that I'd better plan on getting an architect

AND plan on getting ALL - ALL - ALL of the work done.

Was he kidding?

The third floor had been vacant for years - what was the rush?

But, I couldn't take the risk -

having to do that work immediately would sink me

I couldn't AFFORD to call Fred's bluff

Which in my case probably wasn't a bluff

Someone else bought the property -

collecting rents for years from the first and second floors

and to up to TODAY

The work on the third floor has NEVER been done

Fred had the last laugh.

My mistake

Real Estate Mistakes #4