Tell me how YOU process a financial hit?

[Sabine French]

I purchased an affordable home in a city in Virginia that is undergoing revitalization. My plan was to renovate the house, then move into it (from another state) so I could be nearby while I develop new-builds on some property I also own there. Once the new builds are done I would decide whether to stay in the original home or STR it. One of the first things I had to do prior to reno was a mold remediation for which I paid $12,000. Within a couple weeks after the final clearance on mold-testing, the floors in the finished basement buckled. Turns out the heirs who sold me the place had hired someone to spruce the place up prior to putting it on the market and that person had floored right over an open drain (so no way my inspector could have seen it), which backed up during a snow. I'm told Virginia is a "buyer beware" state and the one attorney with whom I consulted indicated I do not have a cause of action to try to recoup damages.

Once I get another remediation (there is now visible mold) and the floors replaced, this unpredicted episode may cost a fifth of what I’d originally budgeted for the entire reno (which never included these floors). I’ve done smaller real estate projects before but this foray is part of my attempt to “go bigger.” I’d welcome some perspective from those of you who are pros at this as to how to put this financial hit into a larger, more positive or at least neutral context?

[Steve Shafer]

@Sabine French What an ordeal. Living in Colorado, the Contract heavily favors the Buyer in almost all cases, so I'm not used to hearing that Buyers don't have legal recourse when issues like this arise. Since you're asking for perspective, I can share my experience from past real estate setbacks. Whether it's an unexpected repair, a tenant issue, or just feeling like you overpaid for a property, time really does heal (almost) all wounds. In a year from now, the hit to your bank account won't sting as much, and you'll have built back up the reserves you had to pull from. Your morale will recover too, and you'll have a story to tell. I try to ask myself, regularly, what do I want my story to be? "A tenant trashed my place, which I hadn't budgeted for, so I decided this was the last property I would ever purchase. Better not to risk unknown expenses." That is a lame story. Instead, your story will be about how you pushed through the challenge, and if you bought it right, you'll also be feeling like a genius in 2-4 years time when that home has continued to appreciate, your other projects are completed, and your portfolio is stabilized. It's been said a million times, but fundamentally, real estate is about the long game. You got this. Best of luck!