Is Residential the scummiest side of real estate?

Part of my company's business line is buying SFR properties and we have to deal with a fair amount of realtors. I would say a few of them are scummy, but the vast majority are just legitimately stupid and uneducated. Previously working in retail brokerage, I would say that is the scummiest group generally speaking.

I'm starting a zero lot line development company called Stratton Soakmont and you are invited to apply so we can throw your resume in our gold-plated trash cans.

I hope you are trolling

I think residential and multifamily just attract more mom & pop investors, and since there are a bunch of them doing a project here or there you are more likely to have a handful of "scummy" ones.

I've seen a ridiculous assortment of characters in real estate across all asset classes. However, generally my experience has led me to believe that there is a higher percentage of "scum" in the Class C multifamily space because profit creation generally comes from cutting corners across repairs/maintenance, operations management, etc... and there is a serious amount of money laundering that runs through many of these assets.

General contractors always seem to have a lot of sociopathic scumbags around....

I think people unfortunately have the perception of scummy MF landlords, and they exist. But so do scummy commercial landlords. There are always people Aiming to invest less in their asset than they need to. In terms of landlords kicking tenants out to jack rents, which is notorious in the older rent stabilized MF apartments in NYC (pre-law change in 2019), commercial landlords do that too. No one cries for commercial tenants being kicked out, but when you think about it, it can be just as bad. If you raise rent on ‘Small Company A’ that has 3,000 SF of space, they need to move. This costs money. They may or may not find similar priced office space. If they can’t find office space in their budget, they need to leave the location they are in or shut down - you see this happen with retail tenants all the time. Their employees may need to find new jobs or they may lose their jobs if the company has to make a choice between space cost and staying open vs keeping employees. What I’m getting at is that unfortunately, jacking rents hurts companies but as landlords we are a business, not a charity. People don’t look poorly upon increasing rents on commercial tenants, but in reality, it is just as bad and can put people out of work or out their homes. We’ve actually seen NYC look at this issue in respect to commercial rent control (retail space) because politicians are worried about rising rents. With all this said, raising rents is our business but we still need to be competitive and if we provide bad product, people will view landlords as slum lords. 

You are an idiot.

Swedish_1

Real Estate in general has a reputation for having slimy people in it, but anecdotally the only scumbags I've met or heard of have been in residential.

Does real estate have that reputation?  I've never heard that.  At least, no more so than any other industry.

Most people in multifamily are good people obviously but it's the only property type that gets under my skin for seemingly cutting the corners.

Well, it's also because people live in the product, and thus there is a greater stigma about cutting corners.  When one of the toilets at your office doesn't work, it's an inconvenience but no one is up in arms.  When the bathroom at home doesn't work, that's an emergency.  Same problem, different perception.

There isn't a single apartment complex out there that doesn't market itself as "Luxury", house flippers put lipstick on pigs, and I feel nothing but disgust for developers of "Zero Lot Homes" who think 2 feet of distance between units qualifies it as a house and not a townhome.

Except none of these are examples of "scummy" people.  You seem to have some trouble differentiating between aggressive marketing and bad behavior.  Putting so little into your capex budget that you have a black mold issue that you then won't remediate - that's scummy (and borderline illegal).  Calling your cookie cutter mid-range apartment building "luxury" isn't - for all you know, that is luxury for someone!

Is my view skewed, or is multifamily the property type where scumbags gravitate towards?

I would argue that you are more likely to get "scumbags" in brokerage, if only because incentives are not aligned for brokers; they have no fiduciary duty and no risk and thus are more likely to act in a manner that is adverse to the interest of their "clients".  But this is no different than any other kind of brokerage or sales.  Pharmaceutical and medical device companies use outrageous marketing tactics to sell their equipment, and you've got lives at stake in those cases.

Also, assuming we're confining the question of "who is the sleaziest" to real estate, it makes sense that residential will anecdotally be considered the worst.  Lets say, for the sake of argument, that 1% of people are acting in bad faith.  Well, hundreds of millions of Americans deal with folks in residential real estate every year - leasing or sales broker, small landlord, etc.  Statistically it's almost impossible not to know someone who has had a bad experience.  Whereas, the number of people dealing with a retail broker or an office developer is tiny.  So you just won't hear those stories unless you're out looking for them.

I haven't had a ton of experience with retail brokers and leasing agents, but retail owners can be some of the most difficult people to work with. They are so used to getting rent reduction requests every time the economy changes that they always ready for a fight. This might trickle down to the brokers and retail leasing agents.