Disaster With First Investment Property

[Brittney Donathan]

Hi everyone, 

So my husband and I just bought our first buy and hold rental. Everything was going great. We waited to get good tenants (about a month of going through applications) and the tenants we chose just moved in a few weeks ago. Our cash flow is great. We put about 7k into the property to make it rent ready. Then we received a message a few days ago from our property management company notifying us of sink holes large enough for a person to fall into that showed up in the yard after the last rain. Come to find out the storm drain that runs under our yard collapsed. Also, our foundation is now sinking on that side of our house and the wall now has about a 1 inch gap from the floor. City says that they will fix the pipe and fix our fence, but said nothing about the house. We also bought the house with an unpermitted addition (large bedroom and bathroom). Our realtor told us that in Little Rock Arkansas unpermitted additions are not a big deal. 

Anyways, does anyone have any experience with anything like this happening? Any advice on how we should proceed? 

This is a huge blow to us. We have been thinking about investing since 2017, finally pull the trigger, and then this happens. 

[Jody Sperling]

There's a lot of things I can't tell you, but I read your question and it immediately struck me that I wanted to encourage you. If insurance won't cover the issue and you experience a setback, you can recover. You may lose a large sum of money because of this problem, but you aren't beaten. You aren't beaten.

The house may cost you everything you've saved and labored to build the last four years, and if you want it to, it can be a distant memory, a life lesson in a very short time.

What you are experiencing is a hardship, not a cosmic sign, not a message from God, not a judgement of karma. It's a hard hardship. I can't understand what you're feeling, not exactly, but I absolutely relate to your situation, and I want you to know, even if I'm the only one who posts it here: you made the right choice buying an investment property, and you did everything you could to make it a great property. It's not your fault, and you can recover even stronger.

It's all about mindset. 

And hopefully there will be a ton of experienced investors and contractors who will see your question and help you build a step-by-step response to this difficult setback. If you do have a tough time finding help, message me. I have limited connections in the Little Rock area and may be able to connect you with a contractor or real estate agent. I know it's not much, but if it could help, I'll do what I can.