Editor’s Note: Dennis Fassett is a former corporate finance executive turned real estate investing “Cash Flow Mercenary.” Dennis specializes in single-family and multi-family cash flow properties and thoroughly enjoys assisting his fellow investors with their own strategies, including how to buy your first apartment building.
As an ongoing contributor to Mogul’s “Market News Updates,” Mr. Fassett provides us with his own unique, lively, and thought-provoking commentary on the timely industry news and events of today that are impacting our industry. And be sure to check out his other super-helpful Market News Updates. For now, enjoy...
From Dennis Fassett, Cash Flow Mercenary...
I read an article in the New Your Observer the other day that bought back fond memories of way back when I was just starting out in real estate investing.
It was titled "Marketing an Estate Where a Murder Took Place.”
I remember it like it was yesterday. It was 2004 and I had a more-than-full-time day job, so I was sending out direct mail letters like a madman.
If you were investing back then, you remember that the market was very similar to the way it is today. Except that there were hardly any foreclosures around. So everyone was climbing all over each other trying to find that mythical and elusive creature called the “motivated seller.”
I was getting calls pretty regularly in response to my letters. But because I didn’t know a damn thing about values or repair costs, I was making offers so absurdly low that more often than not, all I received in response was a hearty laugh from the so-called “motivated seller.”
But my mania to do this real estate investing thing was so strong that I continued. I looked back and calculated that I had sent close to 2,000 letters, without turning a single one into a deal, until I received The Call.
We played phone tag for almost a week before we finally spoke on the phone.
We chit chatted a bit, and then I tiredly went into my checklist for the 30th or so time.
It was a probate deal, and it turned out that it was his mom’s house, and he was executor and was also living there.
Let the Creepiness Begin!
The guy was pretty clearly heavily on drugs. He answered all of my questions about the house and even though he creeped me out, we talked about his options. He talked about wanting to buy rentals at some point, so me, wanting to get off the phone with the guy, I suggested he should start with that one. End of story. We chatted some more then hung up.
The guy then phone-stalked me for another week and a half before I called him back. He had decided that he just wanted to sell and get cashed out. So we made an appointment for me to visit the house.
This is where the story gets even creepier.
It was the middle of November, so I arrived just as it was getting dark, because I had to see houses after work and on weekends.
When I walked into the house my Spidey Sense started tingling.
It was cold. There was one light on. And the house was nearly foreclosure-level trashed.
As I stood in the living room of this 900-or-so square foot, three-bedroom ranch, I quickly noticed that part of the carpet and pad had been torn out, and that there was some small spatter marks on one wall.
The guy is heavily “medicated” and starts telling me the story. In this nearly dark, cold and creepy-as-hell house…
It turns out that his mother didn’t just die.
She was murdered. Right there in the living room about two feet from where I stood. By his mentally unstable and fellow drug-abusing brother. And he had beaten her to death with – get this – an electric guitar.
The carpet had been torn out by the police forensic team. And that spatter on the wall? Blood that they missed when they cleaned up the mess from the murder.
Gulp.
He then asked me if I wanted to see the rest of the (dark) house. And because I have this real estate investing disease, I said, sure!
We started with the kitchen. There was no refrigerator because he sold it. I came to find out later that he sold it to buy drugs. There was an extension cord running in from the back door from the neighbor’s house to power his one light. The utilities were all off.
We walked through the rest of the house, with me making sure he was in front of me the entire time. His mom’s room looked like a tornado had gone through it. He had ransacked it looking for anything valuable to sell for drugs. The same with his brother’s room, because, hey, his brother was never coming home from prison!
I didn’t think it could get any creepier until he asked if I wanted to see the basement. I said, uh, no thanks. I’ll do that another time, when it’s light out.
I got out of there as fast as I could with the intention of never going near that whack-job ever again.
Make Me an Offer I Can’t Refuse
But then, as your may have guessed, he started phone-stalking me again. After another 10 days or so I took his call. He was really upset that I hadn’t made him an offer. So I told him I’d "run the numbers” and get back to him.
I didn’t have any desire to work with the guy, so I made him another one of my signature absurdly low offers. Except that I went even lower because I knew he wouldn’t accept it.
But the wacko said yes. Without even negotiating.
There’s a whole bunch more to the story, but suffice it to say that I closed on the house – and bagged my very first-ever real estate deal.
Before I rented it, though, I did have a heart-to-heart conversation with each of the neighbors.
None of them was happy that I had bought it with the intention of turning it into a rental, since there weren’t many, if any, rental houses on the block. So I was worried that they would let it slip “accidentally” to my tenants that a murder had taken place in the house to scare them away and make the house unrentable.
It seems that all I had to do was explain to them that if they scared all the good tenants away, the only thing I’d be able to do was to rent to really, really, REALLY bad tenants in order to make the mortgage payment.
And do you know to this day that they have never made a peep about it… fancy that!
I still have the house, and to this day it’s by FAR the best deal that I ever made. So I’m a firm believer that murder houses make GREAT rentals!
Got An Ax to Grind?
Do you have a murder-house story to share? I’m dying (!) to hear about in the comments section below.