All Forum Posts by: Corbin H.

UPDATE on this post:

I greatly appreciate all the responses, DMs, and advice. 

Steep learning curve in real estate to follow.

Overall Price:

I should have clarified the work is $18k for the sewer hookup on top of $4k I had already paid to dig up the line. The other $2K was for having to put the tenants up in accommodations and covering the lost rent. These numbers have fluctuated as the project goes on. 

Sewer Work: 
I am working to get another 3 quotes on the work. The work goes off my property line to the alleyway behind the house which is gravel/dirt. There is a 3 foot drop from my yard down to the hookup. They are saying an 8ft pipe is what needs to be installed. It was already dug up as part of the work I've paid for. So now that price comes down the $4k I've already paid.  

Home Equity:

For all those that want to know where the equity went. I was living at this property and renting out rooms. In 2020 I refinanced and used that as a downpayment on my second rental, which I'm living in now. 

Reserve/CapEX:

For those that want to know about my reserves for capex. I keep $10K on hand, as I have never had an issue larger than that that wasn't covered by insurance. I'm currently renovating my second property and have most of my credit tied up in those renovations. 

Property Management:

I have a property management company that has been difficult to get updates from. So I went out to the property this weekend to get eyes on the property as they told me the tenants are not at the property. Turns out the property is in way worse condition than the "great condition" walk through reports I was getting. Weeds were 3 feet high, fences and railings falling over, wood rotting out, roof with moss peeling back the roof to allow in water. Also, the tenants happened to be there when I got there. Speaking to them was incredibly eye-opening. They told me about having such a hard time getting in touch with the property manager than unless something was truly broken, they didn't bother with a work order. Which leads me to believe there may have been early warning signs they just didn't report. They took me around the property and showed me all the things they are fixing because they can't get in touch with anyone. I even noticed the tenants had affixed some kind of bird cage to the outside of the home to allow an animal to go in and out of the home. There's easily another $10k worth of work needed on the outside without me even going inside the home. 

I followed up with the property management regional manager who was blown away any of this could be true. She took immediate action in less than an hour I had a response and movement from the property manager themselves. They admitted they only go to the property once a year. They are sending someone out to look at the property this week. The damages/wear on the house is more than one years' worth.

 With the initial drop in cost from the work and insurance to cover my lost rent I should be in much better condition as far as financing goes. 

Questions for the group:

Am I incredibly naive and should have been spot checking my property manager? 

Am I exposed to any legal recourse from tenants with the quality of the living conditions? 

How do others account for capex like this? It seemed to be the perfect storm where no one else was responsible (insurance, tenants, city). 

Any other advice?

@Theresa Harris - Thank you for your feedback. That seems to be our biggest hurdle at the moment. We just can't seem to find any lenders willing to do HELOCs or equity loans for the rental or our primary. I don't know what other resources are out there. 

@Matthew Paul, I'm on hold for the weekend until I can get other quotes. Supposedly this break happens up to the connection to the city. It does require excavating an alley 8ft deep, hydrojet line, backfill and bed pipe, compaction test, etc. I've already paid $4k for their initial work. This $20k is in addition to them already digging up the line. 

@Chris Seveney - I'm cashflowing with the property at 3%. I would be -$600 a month if I refi to 7.7%. My tenants just renewed their year lease. I wouldn't be able to sell until their lease is up, correct?

I appreciate it @James Mc Ree, I'm trying to make the most informed decision and stack options. I appreciate your advice. 

Greatly appreciate the response @Chris Seveney. 

I would possibly be able to roll the repairs into the tax bill even if the city says they aren't at fault?

I have a little over $200k in equity on the property but can't seem to find a lender that is willing to lend on an investment property. Do you know where I may be able to find a potential lender?

I had a sewer line collapse at my rental. The city came out and said it isn't city responsibility. Insurance came out and said it isn't covered. Plumbing company doesn't have a payment plan. All in they want $20k that I don't have. I've had this rental for 10 years and never had a massive repair like this. Do I have any other options that maybe I don't know about? 

@Drew Sygit & @Thomas Corley - I greatly appreciate the feedback!

@Jennifer Wu - Thank you for your feedback! I was trying to avoid having to manage them myself. I'll have to look into your recommendations. Thank you again. 

I have a 4/2 single family home in Tacoma. I've had a pretty awful experience with my current property manager who forgot to put my previous tenant on a lease. Any recommendations would be greatly appreciated.