Episode 84: Toxic Real Estate with Kathi McCarty
Summary
As real estate investors, we are taught "mold is gold", smoked-in properties are "okay", but when it comes to Meth - DEAL BREAKER. But what happens when you rent your unit out and within 90 days a tenant not only smokes meth in your property, they are manufacturing meth in your property? This is exactly what Kathi McCarty encountered as a first time landlord. Fun stuff right? She tells us her story, how it happened, and what she is doing now to help real estate investors avoid this happening to you!
Listen to full episode :
Kathi McCarty
“I turned my mess into a mission – to help others.”
This Week’s Blog Post:
Introduction to the Episode
Welcome to Episode 84 of "My Life as a Landlord." In this episode, I had the pleasure of speaking with Kathi McCarty, who shared an extraordinary story about her family cabin being turned into a meth lab. This shocking transformation happened in less than 90 days and completely wrecked her property. This episode highlights the dangers of meth contamination in real estate and the harsh realities landlords can face.
Kathi's Story: From Sacred Space to Nightmare
Kathi originally purchased her cabin as a sacred space for her family, a place to create lasting memories. However, after experiencing a serious health event in 2016, she decided to rent out the cabin to offset medical costs. Despite her extensive background in lending and real estate, and taking what she thought were all the right precautions, her experience turned into a nightmare. Within 90 days of renting out the cabin, Kathi discovered that her property had been converted into a meth lab.
Discovering the Meth Lab
The discovery began with a call from her property manager about a minor waterline repair. This repair turned out to be a major issue, and while inspecting the property, Kathi found equipment used for THC extraction. This led to the discovery of a full-blown meth lab, including hazardous chemicals and a small arsenal of guns. The sheriff’s department got involved, and the tenant was eventually arrested, facing multiple felony charges.
Insurance and Legal Battles
Kathi faced numerous challenges with her insurance and legal battles. Despite having an endorsement for a waterline break, she learned that meth contamination was excluded from her insurance policy. The tenant's criminal activities were also not covered. She ended up navigating the civil process, which was exhausting and financially draining, especially since she was already dealing with health issues. Ultimately, she lost her property and equity, leaving her houseless.
Emotional and Personal Impact
The emotional toll on Kathi was immense. The cabin was meant to be her legacy, a place for her grandchildren, and losing it was heartbreaking. Despite her strength and resilience, the support from close friends and family, particularly her sister, was crucial in helping her cope. Kathi’s story is a powerful reminder of the vulnerabilities landlords face and the importance of thorough tenant screening and having proper protections in place.
Moving Forward and Creating Positive Change
Despite the adversity, Kathi turned her experience into a mission to raise awareness and educate others about meth contamination in real estate. She aims to empower positive change by providing tools and resources for landlords to protect their properties and avoid similar situations. Kathi’s journey from victim to advocate is an inspiring example of resilience and determination in the face of overwhelming challenges.