Is real estate worth it?

Question

I think I am at my breaking point.

Let me elaborate that this stress is due to me not having the proper systems in place.  Therefore, the only person that I am blaming is MYSELF!  I am sharing my struggles so that I can vent and for others to learn from my mistakes.

I bought my first deal in 2008, so it has been awhile.  I do not live in my invested area, so I am managing my units remotely while maintaining a full-time W2.

My biggest frustration is with the lack of professionalism from my workmen.  They hardly show up on time, which is my biggest pet peeved in any business.  I grew up in the area where my properties are located so I "know" people.  With that being said, I often ask them to fix my repairs.  The problem is that often these folks do not understand standard business etiquette.  They are ruining my reputation and credibility before I can even build a solid one in this industry segment.   How? They rarely show up as promised, which leads to frustrating tenants.  By the way, I have been fortunate with mostly good tenants, so I must fulfill my duties.

Over the past 12 months, I spent $1,550 to repair a single toilet leak.  I got frustrated and called a licensed plumber whose charge is included in that amount.  I am hoping the issue is corrected, but it pains my heart to know I spent that kind of money on ONE TOILET repair.

I do understand that it pays to learn in any business. I regret my choices.  My key takeaway from all this is to hire a licensed professional for your repairs.  This way, you can file a complaint and follow up with the company directly on incomplete jobs.

Other notes to self -

Be patient. Success takes time. Sometimes you have to lose to win.  You have to spend money to make money.  Sometimes a lesson comes with a hefty price tag. This too shall pass.

So, to answer my question, is it worth it?  Yes, all the stress and headache are worth it all.  Remember, successful people aren't people who do not have problems - they are people who solve problems.

Sorry, I just needed to vent.  Hopefully, the last amount of money I spent is not down the drain for this toilet.  Also, I finally fired all those guys and going the professional route going forward.

I AM HERE TO BUILD!

John Morgan · Answer

@Stephanie D.

I can totally relate to your experience. And I love your attitude going forward. I try to stay positive like you too. Some years it’s not easy. I got pummeled in 2018 with major repairs. I had 60k in savings for repairs and went through every penny of it for the 6 properties I had back then. I didn’t give up and acquired 4 more SFRs since then. 2020 was awful for me as well. I had 3 major rehabs with not enough $ in savings. One rehab was planned (30k) from a house I bought in May. But I had two other unexpected rehabs that crushed me. One was from an eviction that my tenants caused me 24k in damages destroying my nice rehabbed house which includes lost rent. And the other was a tenant that randomly moved out of an old house that needed a ton of work. I bought it in feb with an inherited tenant and estimated it needed only 20k in rehab. It ended up costing me 50k to rehab it. My tenant packed up in the middle of the night (literally according to the neighbors) and moved out of state to live with a lady he met online.

So all in all this year cost me over 100k in rehabs that I wasn’t prepared for. I pulled 45k out of my 401k for a loan, racked up cc debt and pulled 14k out of my Roth IRA to get by. Things happen and I’m always ready to face problems head on. But wasn’t quite ready for my mess in 2020. Sorry for my rant. Sometimes it feels good to air it out. Lol. Here’s to a great 2021and future cash flowing years in the rental biz!

Stephanie D. · Answer

Thanks! It is a lesson learned. I do travel back home often so I am checking on the work. I am slowly building my team of local support. I am in the process of letting go of the no good ones. Sigh, I must keep pushing forward. I can't give up!

Danny Randazzo · Answer

@Stephanie D. Maybe you are investing in the wrong property types or location for your goals. It’s important to purchase the right property to fit your goal. Have you spent time trying to partner with someone who has different skills? Multifamily is a team sport and the best way to have an efficient business is to have a team.

Jonathan Greene · Answer

I would sell the asset and start over. It's good that you are identifying your shortcomings in the situation, but there is too much mismanagement going on in your property. You either have to tighten it all up or wash yourself of this one, even if it at a loss, and set the process before the investment. Too much advice is to just jump into it and this is exactly what happens. You probably trusted people and they failed you and this is all too common, even when you've been doing for a long time. Why did you invest out-of-state when you live in that part of PA. There are deals all over the place.

Eugene Tan · Answer

@Stephanie D.

I have been doing the renting investment for years while keeping my W2 (IT industry as a software engineer), but I never want to get into a remote business. My rule of thumb is in 30 minute drive distance. Personally I don’t think it will work to ask someone to manage and maintain your properties. It’s not worth.

Courtney Walker · Answer

@Stephanie D.

I made the mistake of hiring unlicensed trades on my second rehab (trying to save money) and it cost me almost double in rework and permitting issues.  I learned the hard way as it seems you have as well, so I only use licensed professionals for the initial rehab and all maintenance calls.  You’re on the right track with building a good team.

Stephanie D. · Answer

@John Morgan oh no, I am very sorry for this horrible experience, BUT you pulled through. You did it and you will only be great from here on. I don't like to quit; so I continue to push on.  I love platforms like this that connect like minded people to share our trials and inspire at the same time. I approach life with NO RISK NO REWARD. Cheers to a brighter 2021

Jacob Bohrer · Answer

@Stephanie D.

Your post is great! At first I was unsure about your stance, but it was refreshing to be honest about the highs and lows while also staying positive.

Stephanie D. · Answer

Thanks! It is a lesson learned. I do travel back home often so I am checking on the work. I am slowly building my team of local support. I am in the process of letting go of the no good ones. Sigh, I must keep pushing forward. I can't give up!

Pride Davis · Answer

@Stephanie D.I love this. I just bought my first out of state investment in the city where I am from. I am having the same issues. Hopefully, one day you and I can link up and talk about how you worked through these issues and are now doing JV's Again, super happy for you.

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