Unforeseen Issues Keep Happening

[Yehuda Shtesl]

Hi all,

It's my first time posting, I just need any advice at this point.

I bought my 1st deal mid 2020, was a great off market deal, but needed work which isnok because I wanted to do Brrr. We did a great job remodeling made it beautiful, however, now after a few months in, unexpected stuff keeps happening, like stuff that usually never happens only once in 20 years, all happen one after the other. Some are the contractors mistakes and other not, like stuff that I wouldn't even know to look out for because again, it usually really doesn't happen. I feel like fixing one thing and waiting for the next thing to happen.

I want to push through and I hope I'm done with the problems soon, however I was wondering if anyone had a similar experience, how you dealt with it, mentally, physically and emotionally. (Put in so much money and sweat and all this happening) as well I want to keep doing Brrr but not I am more hesitant because at thisnoint I don't know what to look for or if what I see if there is more that I don't see even with inspections and stuff.

Thanks for your time.

[Shyam Panchal]

Originally posted by @Yehuda Shtesl:

Hi all,

It's my first time posting, I just need any advice at this point.

I bought my 1st deal mid 2020, was a great off market deal, but needed work which isnok because I wanted to do Brrr. We did a great job remodeling made it beautiful, however, now after a few months in, unexpected stuff keeps happening, like stuff that usually never happens only once in 20 years, all happen one after the other. Some are the contractors mistakes and other not, like stuff that I wouldn't even know to look out for because again, it usually really doesn't happen. I feel like fixing one thing and waiting for the next thing to happen.

I want to push through and I hope I'm done with the problems soon, however I was wondering if anyone had a similar experience, how you dealt with it, mentally, physically and emotionally. (Put in so much money and sweat and all this happening) as well I want to keep doing Brrr but not I am more hesitant because at thisnoint I don't know what to look for or if what I see if there is more that I don't see even with inspections and stuff.

Thanks for your time.

 Can you provide more specifics about what is happening?  When I first started out investing, anything and everything that could have gone wrong did go wrong.  I bought an older (built in the 1970s) "multifamily" duplex property in a Class A area in Atlanta (it was all I could afford in this area). The property was already rented, so I thought it was a good deal with very little hassle at the time.

A few months after closing, the property started needing repairs which were manageable, but unexpected as the inspection report came back with minor issues. I started having problems with one of my tenants, who couldn't pay rent two months after signing a lease with the previous owner.  I had to evict this tenant and struggled to find a tenant for this unit for the next four months because my realtor was not putting in much effort trying to rent out this property.  Because I was investing from a distance and didn't see the property in person, I relied to heavily on my realtor and later found out there was an electrical tower running behind my property which wasn't disclosed (a complete n00b mistake I am embarrassed to admit).  I had to "fire" my realtor and managed to find a good one in the area who was more experienced with investors.  I bought this property with cash and was planning to refinance later.  During the refinance, I found out that multifamily properties were not permitted in the county based on zoning laws, and did not qualify for the refinance (another embarrassing n00b mistake..). To top it all off, Atlanta had freak rain that year, and the basement unit flooded and had to be entirely gutted.  I never rebuilt the basement unit after that as the property was becoming a money pit.  

All of these mistakes were entirely avoidable had I been more diligent (except for the freak rain and flooded basement). Although it was a painful two years of my life, I stuck with RE investing.  I managed to sell the property right before the pandemic hit and broke even on the investment (I was very lucky).  I now have five units in my portfolio and will add four more this year (9 in total).  It would have been easy to blame the people I worked with to acquire this property, but it was ultimately my responsibility to learn from the experience.  Power through, don't give up, and find an exit strategy quickly if the property is becoming a money pit.  

• What lessons did I learn?
• Always look into your realtor. If you are shopping around for realtors, a good realtor who really wants to win your business will look up the records of other realtors they are competing with in the MLS to give you the lowdown on their competitors. I found out the realtor I was originally working with (the one who sold me the house and renting out the property after the first eviction) lied about her experience - she said she had 7 years of experience, but only had 1 year of experience.
• You can force value by purchasing older properties and fixing them up, but if you are investing from a distance and can't handle the ups and downs associated with this strategy, don't buy these properties.  This takes diligence and a build-up skill (which I didn't have at the time) to make a success out of this strategy.  You will most likely spend more than you originally budgeted for.  I now only buy turnkey properties built after 2000 to avoid the hassle of repairs (not always possible but more likely in a newer property).  
• Take responsibility.  There is always something you could have done better.  Don't assume your inspectors, realtors, or contractors are going to be as diligent as you.