Out-of-state issues -both rehab and PM

[Qingqing Gan]

Hello fellow BPers,

I am an out-of-state investor who bought a 6-plex in AL last January. The same gentleman who brought me the deal also managed the rehab and owns the PM company that manages the property for me. We agreed on $90k rehab paid by me for the whole project to be finished.

I was told last summer that the rehab was done for all 6 units. I've paid $90k. However, till now, only one unit is filled with a new tenant. Two other tenants are inherited from the previous owner, now one is going through eviction. I requested for inspection several times in the past 6 months. unfortunately, it has been pushed back continuously for reasons such as stormy weather and thieves breaking-in, hence new repairs need to be done. Finally, an inspection is scheduled for this week. I received another $5000 bill for new repairs and new water heaters needed, caused by weather and break-ins AFTER the project was claimed to be finished last summer.

The question here is, I really don't know how to tell whether these $5000 repairs are for new damages that happened after the project was finished or just things that were never done. Should I push back or just pay it?

A more general question for all out-of-state landlords: do you usually ask for proof, such as pictures, when your pm billed you a repair?

This is my first out-of-state investment, and I am really feeling the pain now. 

For people who are still considering out-of-state, I highly recommend you to dedicate rehab and pm to different people, so that you can get a clearer picture of what's really going on. 

Thank you!