Investment Gone Wrong - What Next?

[Chibuzor Alumba]

So you made All the mistakes. You bought

- Too high

- A 2 bed 600sqft home

- A home that needs lots of work just to be rentable

- A home you lose money on with the rents from a regular tenant

Additionally, due to the above mistakes and not being able to rent the home easily you:

- Were flexible on your tenant selection process

- Rented to a company not an individual (therefore not covered/ protected by the residential tenancy board)

- Had your pipes frozen because the tenants turned off the furnace (Why? Don’t ask me lol)

- Had insurance refuse to pay for damages because you got a specific case coverage not all All incident coverage

- Have a wife who is 8 months pregnant

In summary, everything that can go wrong has gone wrong.

What do you do next?

Here is What NOT to do:

- Do not spend all of your savings fixing up the okay kitchen when you have not fixed the pipes, replaced the destroyed carpet, and taken out the wet wood panels all because (we are doing renovations anyway)

- And do not run around aimlessly

How we handled it:

- We did spend most of our savings fixing the kitchen and now have to do most of the work ourselves to get the actual issues in the house fixed (Fix critical issues before aesthetics Always)

- Fix the frozen pipes: Done

- Fix all taps, shower heads, and fixtures destroyed during the flood: Done

- Take our the destroyed carpet in the basement: Done

- Repaint all rooms, baseboards, and door trims: Done

In summary, when faced with an issue:

1. Draw up a plan of what you need to do by priority (what’s broken, how much it takes to fix - get quotes from as many contractors as possible). Make sure Mould growing in the wet wood panels takes priority over fixing a kitchen that was not affected by the flood.

2. Get your budget in order. Figure out how much it costs to hold the property each month (PITI and utilities)

3. Ask local investors for help and advice

4. Get to work. Each month you hold the home comes with costs

Any suggestions or comments are welcome as usual.

Go forth, learn from this, don’t repeat my mistakes, and crush it