My journey investing in real estate has not been long and I have already faced what I see as extreme difficulty. I bought my first single family rental in September 2021 in a strong and growing market (Chattanooga TN). The house was by all means turnkey as it was newly renovated and had no major items brought up in inspection. By April of 2022, I had to evict my first tenant who didnt pay rent and left all of their stuff. During my first year of owning my first rental, I paid around $3000 in various repairs. Still committed to RE, I purchased my second single family rental in February 2023. This house was also newly renovated and had no major items flagged in inspection. Three weeks after closing, I was told the HVAC needed to be replaced which cost me $6500. Fast forward to today, I was told the septic tank line needs to be repaired / replaced for an estimated $9500.
This was a shock to me because I didnt even know my property had a septic tank. I looked in the inspection report and it read that the septic / sewer was not inspected because it was not visible or inaccessible.
I feel like Ive been diligent to follow the book taught by BP - choose a market carefully, dont buy a run down property to chase cash flow, keep all contingencies to protect yourself in escrow. And still, I feel like Ive been destroyed with thousands of dollars in repairs on things that seem to just come up and Im not sure how I could have avoided.
Is there something Im missing? In all the stories Ive heard on the forums and podcast episodes, I have never heard an investor speak of this level of repairs needed in such a short period of time. Luckily I have had reserves to cover these repairs, but I certainly cannot afford to keep up at this pace. I believe in the power of real estate but right now it seems like the best option is to just cut my losses and get out.
Any insights would be appreciated. Thank you
