Really stressed and uncertain

[Erika Baker]

My husband and I bought our first property in July. We researched, read books, went to meetups for about 8 months before we made our move. Bought a half occupied 4 plex in cinci. It had been a money pit from the get go. Had to fix roof issues, boiler issues, leaks, trees, you name it. On top of this I used a heloc for the down payment, the interest rate jumped up to 10%, that with the high mortgage interest of 7%, and constantly pouring money from our savings into the building has us both loosing a lot of sleep. 

It’s only been a few months but feels like years- I keep telling myself sometimes you have to spend money at first to make money and we need to stick it out but I don’t know how much longer I can keep this up! The numbers worked when I analyzed the deal if it was fully occupied but we are having trouble with that as well. Also little things like the electricity and water bills are adding up for the common areas. 

I feel like we might have made a bad investment and we should get out of it, any advice would be appreciated! 

[Alecia Loveless]

@Erika Baker First off get the Section 8 inspection problems fixed so you’re collecting that rent again ASAP if it hasn’t all been fixed yet.

Then do whatever it takes to get the other two units ready. If prospective tenants are worried about the unit on the first floor find out why? Is it crime? Can you have a security system installed cheaply that they can pay for the service for? IDK if that would help or not. But try to think outside the box here.

Once it’s rented it should get easier. Truly it should.

I’ve got 7 properties and 25 units and until 3 weeks ago was spending less than 2 hours a week on all of them when it came to dealing with issues, tenants, maintenance problems and my contractor who is handling the details of repairs.

I also spent an additional 2 hours a week driving around and checking the properties to make sure they were neat and clean and being properly maintained and there was no trash or anything that needed to be picked up.

The past three weeks I’ve had some extra issues involving heat and two lease renewals that have taken a little extra time.

I think if you power through the hard part you’re going through now you will get to an easier point where you will see the rewards. Many investors find their first investment property is a break even deal and a big learning curve. You will learn from this experience how to better analyze your next deal and determine if you want another out of state investment or another class C investment and just all kinds of other things you have learned. I highly recommend continuing to read books, listen to podcasts, and stick with this property for at least another year to give it a shot before quitting at it. I quit 23 years ago and regret it every day because I’d probably have 100 properties by now had I not.