I got screwed... big time! How can I fix this?

I purchased a 4-plex in January with 4 paying tenants through the Marshall Reddick Network recommendation of tninvestments.com. In my first three months, I got statements showing NO TENANTS and a zero balance = no rents received.

Long story short…
Problems in a nutshell:

  1. Enterprise Realtors let a tenant stay rent free for 5 months without action (and without knowledge for three months.)
  2. Enterprise installed this deadbeat tenant the month before I purchased, and he works for another management company in the area.
  3. Enterprise failed/fails to accurately disclose and credit rents received on my statements. At least, I’m not seeing any rent from the new tenant they installed on their final statement to me.
  4. Enterprise appears to have faulty accounting; they show months of vacant units on my statements, when 3 units were occupied. I actually had to check through the utility company to find out if units were occupied.
  5. Enterprise has their own cleaning lady who cleaned the vacant units for $174. They also had a furniture moving guy- who moved some furniture out of a unit, in-house, who they billed out for $420. Is this even legal?
  6. They charged me for two utility bill payments, and when I called the utility company, there was a credit on their bill-- in their name (they overpaid.)
    There’s TONS more to tell.
    I honestly don’t know what to do. How can I go after the deadbeat tenant?

How can I go after Enterprise Realtors?
I don’t know how to find out what rents they’ve REALLY received compared to what they say they’ve received. And, I don’t understand how I could have gone from 4 paying tenants to ZERO in one month. I don’t understand how tenants could be occupying three units (I found out through the utility co.) and my management company did not know this.

They’ve done the same, actually MUCH worse, to my father. He’s been with them for over a year, and the mess they’ve created for him is HUGE. (I bought before his huge mess was dislosed to me.)

Help… please… serious help… Please.

This is clearly a self-inflicted wound. Why would you buy a property and allow the same company that had “screwed” your father to manage your property? That’s crazy! You’ve obviosly bought into the REI guru hype that REI is easy. Ridiculous! REI is hard work and is a hands on business.

Here are my serious recommendations:

  1. Fire your management company - today.

  2. Go to the property (whatever it takes) and find out what’s going on.

  3. Immediately file an eviction action on all non-paying or late-paying tenants.

  4. Find your own tenants and manage the property yourself. If this property is too far from home to do that, sell the property immediately. Very, very few investors are able to make a profit long distance with paid management and paid maintenance.

  5. On all your future deals, do proper due diligence! This is absolutely critical if you want to be successful. In this case, you knew or should have known that your father wasn’t happy with this company. Why did you work with them??? Before you buy anything, you should be thoroughly familiar with ALL facets of the the property. You should see all leases and screen who is living in the building. You should also ensure that all rents are current. Everything MUST be in writing. In today’s world, someone’s word is all but meaningless.

  6. Start studying. Clearly you have a lot to learn before venturing further into REI. I’d recommend starting by joining your local REIA.

Good Luck,


I think this is a case of simply not understanding the underlying principle in Real Estate. “CAVEAT EMPTOR”

This is latin, and translated it means essentially, “BUYER BEWARE”. Did you not go to this property, prior to purchase? Did ask for up to date rent roll just prior to closing?

You should also have gotten copies of all leases, P&L statements, etc.

I call around to local realtors, investors, etc and ask if they have heard of that management company, and if they have any background on them.

Always, always always, do your own Due Diligence on everything that you do. Check it out for yourself. If a guru told you it was safe to jump from the Golden Gate Bridge, would you?

My brother inspected the property, and I paid for a formal inspection. There’s nothing wrong with it. In fact, I only need 2 units to rent in order to cashflow.
I got copies of the leases.
I got pro-rated rents for the remainder of the closing month through escrow.
My father did not fully divulge his problems. He had encouraged me to start investing with them.
I’ve talked with many people in the area-- TN housing authority, other management companies, and more, and they’re reluctant to speak. When I explain some of the shady things that have happened, they say something to the effect ofl, “Enterprise Realtors… that doesn’t surprise me.” Or, “We’ve had these problems with them before.”

Look, I’m getting schooled with some hard knocks here. There’s no sense in beating the beaten.

I’m looking to:

  1. Hopefully warn others
  2. Get in contact with others who have been victimized.
  3. FIND some anwers. What’s the best way to go after the deadbeat renter?
    I know accounting errors happen, but I also know this company makes it a habit. At what point does a habit like this become felonious?

If you really want to know if any crimes have been committed, you really should hire a lawyer that is familiar with real estate. Going down this path is time consuming and can be very expensive.

For short term solutions, I would fire the management company if they haven’t been honest with you.

Second, go visit all the tenants to see who has paid and who hasn’t. Give them your address for all future rents. For the tenants that haven’t paid, I would start formal eviction procedure (whatever you must do in your city).

Your 1st order of business is to get some money flowing in …not out. I would focus on that.

Good luck,
Patti Porter

Landlord/Tenant Court.

I am not familiar with your area, but, I know here in
Baltmore, it will be between 60-90 days after you file
the initial paperwork to evict a tenant. So, start the
processes as soon as possible.

Stop the bleeding.

if you want to get out of there fast, just evict, fire the managment company, and manage yourself, if you cant do it , then hire another MC with enough references, i think if you want to move on, just start from the beginning . Attorneys, fees and hassles sometimes is not worthed and it could cost you more time and money… and dont listen to your dad

talk to a real estate attorney. i’ve found out the hard way that its usually worth the money you spend.

There must be some agency / advocacy dept. with your state where you can report these scum. Some sort of better business bureau. These places actually DO work really hard for you.

I recently had a problem where an insurance company was not paying what they should. I was in a tireless fight with them and the hospital and was getting nowhere. I got the state involved and everyone payed up real fast - oh, and they got real nice too!

It was one of the few times when I really thought I got a great value for my tax dollars.

Look before you leap next time.Stop getting screwed… had to say that one… seriously he is right whatever he say above.Clean house. Get new tenant or pass the buck and cut your loss and run for the hills.yes, Stop the bleeding. Then God has no mercy.Go with the wrath of GOD and sue the realtor, if they have a license, they won’t for long. Follow the money. You smell it? Like Superman said the people!. Some said go after the deadbeat tenant! They dead beat… they have NO MONEY, there dead beat. You are going to chase mkoses into the dessert.To much time and cost for an attorney. Hell, they won’t even show up. Spend 6,000 for cost to get x amount of money. You might as well as light you cigar with a dollar,. At least you can enjoy it.

fire the mgmt company this very minute if you havent done so.
Talk to your tenants today. find out if they have paid rent. ask for copies of cancelled checks, receipts, money orders, etc. Tell them they got 24 hours to provide it or you start eviction.

Come down with the smackdown and let the tenants know theres a new sherriff in town.

Even if you have to get on a plane and crash in a hotel. do it. I would also inspect the property. If they have been so careless with your money, what about building maintenance?

Depending on the back rents lost, i wouldnt hire an atty. cut your losses and go. I have 2 attys (one for a civil suit and the other for child support.custody) and man the bills just dont stop. 250-350 an hour adds up VERY fast

Good Luck

They have the word “realtors” in their name, are they licensed realtors? Some states don’t require that you are to manage properties. Here in Florida you have to be a licensed realtor and if you do what happened to you you can be reported to FREC (Florida Real Estate Commission) and fines are severe.

See if there is such a board in your state and report them! Sounds like they were missappropriating your funds whether intentionally or not.

If it’s long distance and too much of a hassle to be there physically to manage it, sell it as fast as you can.

  1. Fire MC
  2. Start collecting rents - forget about what you’ve lost already. Speak to your tenants - whether they’ve paid already or not - and tell them to send you money from now on. Start getting the cash from them. Cancelled checks and all that stuff will just drag on. Talk to them and be firm. If they don’t send you the next months rent - then lay the hammer down, but at least try and just get the cash.
  3. Put this bad boy up for sale NOW.

I see you have gotten a wide range of advice on your question. Let me see if I can add something to this.

Since hindsight is always better than foresight (especially to all of us standing on the outside of this deal), I want to offer some advice on how to avoid this next time.

  1. View the property at different times. Ask to meet the tenants if the property does not look occupied.
  2. Ask to see the renter applications, and get copies. If there are no applications you know the LL has not even qualified the tenants.
  3. If the seller has misrepresented the NOI from the property, and you made a material decision to purchase the property based on that misrepresentation, you have a cause of action against the seller, and should probably seek competent legal counsel immediately before a statute of limitations expires (based on your specific location). It is illegal to deliberately induce someone to make a transaction based on information known to be false or misleading (this is called fraud).
  4. When you are looking for a property manager, find someone who is certified and has completed training courses in the management of properties. You can find a CPM by contacting the Institute of Real Estate Management (www.irem.org)–I know this because I am a CPM and we all have very strict ethical standards we follow, as well as intensive professional training. We also self-police our ranks and oust people who fail to follow the Canon of Ethics. Something to consider.
  5. I am not sure what your diligence process looked like on this acquisition, but I can certainly help you with that over the phone if that sounds like something that would be helpful, even if only for next time.

Long and short, there is no point is shooting the wounded. You have suffered a financial setback that is painful personally and financially. I would not advise you to sell it until you have leased it up–this would be a panic-induced over-reaction to a bad situation, and at some point, unless the property is unleasable, you should be able to find renters and get the income stream stabilized, and then consider whether you want to sell it or not.

Happy to help more if it can be constructive.

I truly feel for you :-[ I’m a newbie in many areas of REI, but i did manage a rental property for my mother for a bit. Here is what I would do:

  1. Others have said it, fire the current management company. Send them a letter CMRRR (certified mail, return receipt requested) firing them and demanding that they forward to you copies of all leases, a cashier’s check for all security deposits being held AND demand the amount of (do the math here) the monthly rent of each unit, times the number of units, times the number of months you’ve owned the property, minus any payments they have sent you.

  2. Contact each tenant, also by CMRRR (if you are close enough, you can also hand deliver, but you really want the CMRRR as proof of mailing), to advise them that rent is now to be mailed directly to you, the owner of the building AND request proof of all rents paid since the date you took ownership. Advise them that failure to provide said proof within 10 days will result in the beginning of eviction.

  3. File a formal complaint with each and every public agency you can think of that mind be remotely connected (state real estate board, dept of corporations, State Attorney General…etc etc)

  4. Wait 10 days after your demands and file lawsuits accordingly (against the management company…with help of an attorney if needed) and against any non-paying tenants.

  5. Hire a reputable, competent property manager.


Everyone has given you great ideas. Wake the hell up and trust no one in this industry much like every other industry UNTIL you have done a few deals. Family included. Take the blinders off, get down to business, and get yourself out of this jam. You sound like you got screwed. Well…welcome to the real world. Work your way out of it, learn from it, make money from it, and move on.


Dear Skimble,

I am sorry to hear you got screwed. You are right, no need to beat the beaten. Few tips, join the Prepaid Legal group, they are very quick to reply and can get you lawyers in all states. It’s about 50 dollars a month, and I have used them many times. You need to have legal help when you do Real Estate, sooner or later you will get burned, mostly sooner when you are a newbee. Also, form an LLC if you haven’t already done that to protect yourself. They can help you with that as well. They will tell you how much that costs.

One of the replyers to your letter was right: it is a lot of work and you have to stay on top of every deal you do. Never think you don’t have to do your own due diligence, even if the company says so. Try at least to go after them even if you don’t get anything, lesson learned. Don’t feel bad, we all make mistakes and pay some tuition money. Report these guys with the better business bureau and let them know you filed a complaint.

I do deals with multi family units out of state all the time and it works out great, but you have to have a reliable team in place. Also, buy David Lindahl’s course on how to buy multi family units, he has a great check list on what to check out when you buy. Last but not least: never get emotionally attached to a property, it’s only a property. As Dolf De Roos once said: The Deal Of The Decade comes by once a week. Good Luck!

Be proud of the fact you tried, even though this deal wasn’t as great as you thought. Many others would stay in their seat and be safe. It takes some courage to be an investor. If you want to chat more, send me an email or call me at 303-877-6549.

It sounds like you do have some recourse here though. If they misrepresented a transaction with falsified DD items… you should bring this to an attorney.

Sorry to hear about the transaction… it’s not right that someone would go to such lengths to tell the “big lie”…

I don’t agree with the Caveat Emptor saying either… if you do property due dilligence and they are contractually obligated to provide you with documentation that proves false… you have a civil action here.

For instance, they can’t claim to have a credit for rent (of someone they are not charging) without an opposing debit for deliquency. Just not accounting guidelines…

You are going to end up taking a hit on this… but, in the end, try to turn it around in the time being, and seek some kind of compensation.

Immediately sue the management company for negligence, financial losses & damages & the Seller for any misrepresentations. Failure to evict after 5 months of non payments is a serious breach of their management contract.