The First Fire Of My Rental Empire (in the making)

Note Date 20170216 - Adam Adams

I spent a lovely week in Chicago. I haggled one deal to oblivion and got 7 more under contract. I'm wheeling and dealing while jet setting to the coldest parts of America for Valentine's day. It makes me feel like a big boy while I walk all over downtown Chicago looking for my favorite foods.

This morning I placed my order for Uber to take me to the airport. As my Uber driver calls me asking me where I am, I get another call buzzing away. I call back the other number and I am told, "Hey I'm Bob. I need to board up your house. Who's your insurance contact?" At the same time, the Uber driver pulled up in the bike lane and the doorman is yelling at him, while my wife is asking me, "Is this our car?" UGH!!!

So let's back up a bit. I bought a Contract for Deed back in October or November. I don't recall the month at this time. The borrower was over a year behind and wasn't paying the taxes or the water bill. After many conversations and getting no where, we finally got everything ready for an eviction. We posted the eviction notice on the door only to find out that the borrower was renting out the house and not paying on his note. The renter didn't want to be evicted so I asked how much she was paying in rent. $700. No sweat. We'll get you on a lease and keep you at $700. Not bad for a $9,000 note, eh. Now we go through the process of the forfeiture to remove the borrower's interest from the property. Today is the day that it all takes place before a judge. And today is the day I find out the house has burned down.

Did the borrower burn the house down to spite me? Did he do it with the renters in the house? My wife finds the news story on the internet. Everyone is OK. I can't believe he would do such a thing. He could have killed someone. When I get through security, I'm calling the fire department and let them know to look for him and his work.

That was a long ride to the airport. My instant rental was gone. What was left? How much did I insure it for? UGH!!! We get through security and I get my seat at gate B-17 and we wait for the flight. I finally find the phone number for the fire department and I talk to the fire marshall. He writes everything down, checks his spelling, makes sure he has my contact info. Then he tells me what they know. The renter's 3 year old nephew was playing with a lighter. No foul play suspected. However, they will keep my borrower as a person of interest.

WHAT!?!?!?! That doesn't compute. This sucks. I wanted someone to pay and I wanted the butthead that has been causing me so much grief for the last two months to pay. Turns out he's innocent and probably laughing at me too. Ugh.

I finally get home and check my insurance policy. Turns out I'm covered with some padding. I was covering the note. If the fire would have waited one more day till after the forfeiture, I would have changed my policy to a rental and probably would have doubled my coverage. The timing sucked on this one for sure. Nevertheless, I'm still covered and so is my partner. Now to see if we can make something out of this. It was a large two bedroom. Now maybe we can convert it to a 4 bedroom. What are the rents? How much is the renovation? Time for Excel to make that call for me. And so begins the tale of my first fire.

Stay tuned for the rest of the story.