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.