We have a 4-plex (2nd deal after Success Academy)that we bought last year. We have a money partner who paid cash for $56K. She also put up the rehab money of $30K. After rehab, it took us months to rent. Now that it is rented, we could not imagine the water leaks/plumbing problems that have been happening all throughout the property. Pipes are leaking in the hallway, kitchen, bathroom! Our in-house contractor quoted us $10K to replace all damaged/rusted/ pipes. The problem is...we do not have that money! We are living paycheck to paycheck still. In fact, all the rent money coming in have been going back to repair the property in the past several months. Our money partner has stopped putting in money because suddenly, she was diagnosed with ALS..an incurable disease. She is minding her life right now which I totally understand. So all of the repair money have been coming out of our savings. I am unemployed and my husband is struggling to make ends meet..and now we have these repair issues. Our partner has branded it "Lemon Property". I refuse to believe at first, but it's been months and we are still in the repairing mode! We haven't gotten the chance to enjoy the cashflow of $1500 a month! It's a great cashflow property, only, if it will not break!
Some of you might ask.."If it's rehabbed, how come, there will be plumbing problems?" . Well, the answer is..we rehabbed cosmetically. Now, I could say that checking and taking care of the plumbing is one of the most important things to consider in buying a property.
We are so confused and running out of options. Please help!
Who is Dean Graziosi?
Are People Actually Successful?
Does Dean Practice What He Preaches?
What Deals Are The Students Doing Right Now?
Can
You get your partner to agree to sell? You will have to get the property fixed or sold somehow.
RENinja
Partner agreed to sell
Thanks RENinja!
Yes, my partner was the one who wants to sell the property already. Put it up for sale 3 months ago but didn't sell. We are going to fix up the current plumbing problems first then we'll sell. However, going back to that money problem...it's like the question, what comes first? "chicken or egg?" kind of thing. How can we fix when we don't have money to fix? Currently, buckets are being placed on the floors but I don't know how long the tenants will endure that. While the leaks are happening..the other unit has no hot water because of the pipes also...whew!
I ended up just crying the other day because we can't find a solution. The contractor is willing to work with us on the payment...but $10K is still a lot of money..
Again, thanks for your time to even respond to me! I really appreciate it. I welcome more advices!
Marizel
If it's a headache... Why
If it's a headache... Why not sell it "as is"? Why not find a seller to get rid of it?
@ travisderod
We've been trying to sell but no buyers yet. We tried both with agents and wholesalers/We Buy Houses.
opinions
could these problems been cause by some of the repairs that were made during rehab????
if so, your contractors that performed the rehab should be held responsible
always perform detailed inspections before you buy or buy so low to cover unforseen problems/repairs
Re: reinvestor42
When we were buying the property, it was impossible to see all pipes/plumbing issues unless we tear down the walls and ceilings. Even during inspection, these problems did not come up. So we did not touch the plumbing at all. We focused on the cosmetic part of it. So after a month, these issues started showing up.
That's one of the greatest challenges when buying REOs...especially those that have been vacant for several months. They don't have water currently running so when it gets turned on during inspection..we can't readily see the issues not until after several days or even months. That's what happened in this case.
Not to mention the vandalism that we had to deal with..those were added repair costs!
Call FOR RENT ads in the
Call FOR RENT ads in the area. Call other landlords. Network.
I understand
but its either fix and sell or sell as is. You could get a loan, but that isn't a good option unless you are sure of a monthly profit. You might just have to sell with a loss. Don't hang on to the property for another year and take a 100 percent loss.
Like Mike said, its possible the contractor caused damage. Always check to make sure the work is solid and isn't mocked up.
Hope things go well.
RENinja
Re: I understand RENinja
My mother has shelled out another $2K just to fix the current leaks and vandalism so the unit can be occupied by a Sec. 8 tenant. This unit that is currently leaking will be inspected by Housing on Dec. 15th. This will generate $1100 income. We are hoping that after this damage...it will end there and finally enjoy some cashflows.
Thanks for the advice on the contractor...we'll keep our eyes open.
There are some inexpensive
There are some inexpensive ways to fix pluming yourself. Take on one leak at a time, there are products that you can easily do. Pex tubing is what is being used now,and the fitting can be installed with out any tools. You can check out on Home Depot website they have all that you need and how to video on website.
Pex tubing
Hi James,
Thanks for taking the time to reply...
I will check on that in Home Depot. Our contractor said that pinholes are all over the pipes throughout the property and they are all rusted and clogged..is there anyway that can be done without replacing the whole plumbing system?
Marizel
Things to consider
when buying OLDER properties--electrical upgrades, rusted plumbing,hot water heaters, heating/cooling systems, structure/foundation, windows, doors, roofing-not just shingle but rafters and roofing boards (complete re roof),
If you follow James Kendricks advice with the leaks and PEX, you may be able to fix way cheaper
Marizel, things will work out for you.
Mike
Pex tubing
I already saw the video from Home Depot website...it's great! I will ask our contractor if he's aware of that...he should, right?