Have a Big Why- Rental Nightmares

[Akhilesh Rao]

I am new to real estate investing, actually completing a year end of this june 2021.  I first came to know of the Term FIRE last year out of the blue after my wife mentioned about alternative income streams. 

one thing led to another and i got introduced to bigger pockets and listened to Brandon Turners Iconic Webinar some time in september and became a pro member with a goal of owning my rental property in 90days. by mid december i had my first rental, a duplex and every thing was going smoothly until i closed on my 3rd duplex in may of 2021, soon to close on my fourth duplex in june 2021. 

The problem started with my third duplex that is likely to turn into a money pit. Everything that can go wrong is going wrong as of now. Last week which is about 3weeks into closing the basement of the rental got flooded with sewer water. My tenant called stating there is atleast a foot of water. After talking to her, i realize this is the 4th time since she moved into the duplex that the basement had flooded. 

Retracing back to my inspection, while doing the walkthrough, my wife happened to talk to the mother of the tenant who stated that there was a basement leak but no further information was given. I asked my realtor who questioned the previous owner who blew it off saying there was some dampness and nothing more. In the residential property disclosure, the owner stated no to water or sewer flooding

I did get a sewer scope which indicated a break in the sewer pipe in a location which the city took responsibility to fix without a time frame. 

Fast forward to now , after the basement is flooded, i had to get a restoration service and plumber for several thousand dollars. 

The tenant is not happy about her personal property being contaminated. 

Interestingly i find out the tenant is section 8 which when i looked at rent roll or lease  at the time of purchase of this property had no mention of that. I am dealing with trying to get the Section 8 transfer the ownership but in the meantime the Section 8 tenant wants to leave but wanting me to not collect any rent until she gets another house. 

The Other tenant is not in town for 3weeks and i probably can assume that property is contaminated with sanitary waste even though the tenant;s sister said there was just some dampness, but i will have a clear picture when the actual tenant returns. 

My Property management contact person is not wanting to get involved given the extent of work involved even though i signed the contract with them mid may at the time of closing on this property. He states that there was no account set up yet and no money exchanged as we are trying to get the Section 8 set up. 

Next Action Step

1. Got the restoration company to clean the basement

2. Got the plumbing to do another sewer scope

3. called the city service dept and got the run around stating that it was an act of god and a 100yr rain

4. Will get backwater valve installed ASAP

5. Cut down the tree on the curb which has damaged the sewer pipe

6. may need to do some rehab if both tenant decide to leave

7. Contacted an attorney 

Questions

If sewer floods the basement with the knowledge that the pipe is broken in the city property who is liable for the Tenants loss of merchandise or their claim of health issues

how is basement flooding going to affect the property price in the area

how is it going to affect the rental market

My Take: after all it is a property and not life, may delay the FIRE but life goes on