It seems that all of the rental properties that I have bought in the last few months have been ones with problems. This happens from time to time, and no matter how much planning you do before buying a property, there is always the chance that there will be problems.
Trust me on this one. In fact, let me share a story with you.
Two weeks ago I put an offer in on a duplex in an area that I have had my eye on for some time. The good properties in the area are few and far between, so I had been waiting patiently for something to come up for sale that I could snatch up. Like always I made sure to keep my emotions out of my investing, so when I bought the duplex, I thought that I had a winner.
But I had made one mistake – I didn’t do a walkthrough of the property myself. I had one of my employees do it and bought based on their suggestion.
It was a mistake.
As it turned out, the property had some extensive water damage and we had to call in some consultants that specialized in Water Damage Restoration Castic to deal with the issues. They have been working on the property here for a day or two now, and though progress has been made, it is not in a rent-ready state yet. Hopefully we’ll be able to get it out there for rent soon, but in the meantime I learned a valuable lesson: I need to do walkthroughs on my own before buying any new rental properties.
While I don’t have a lot of rental properties in my portfolio, I treasure each and every one of them. They will be the way that I pay for my retirement and I treat each and every one of them as investments. A lot of number crunching goes into picking them out, but I still like to inspect them in-person once we have taken possession of them.
So I found myself out at our latest purchase here today and I couldn’t wipe the smile off my face. I had bought this bungalow because of the amazing curb appeal that I saw in the pictures, and standing there in real-life was a completely different experience.
The place looked good.
While first impressions are important, I wanted to see what the place looked like inside. I knew that this home had some water issues in the past, but one of my favorite water damage restoration Los Angeles companies did the work, so I wasn’t worried about it. In fact, the inside of the home was in better shape than I would have expected, so all we will have to do before we rent it out is a little cleaning and a fresh coat of paint.
Hopefully it won’t take long to get the work done – I’d like to have it rented out by the middle of the month.
For the last few months I have been buying up houses in foreclosure and flipping them. I was inspired by the many television shows that depict flipping houses to be an easy way to make money, and for the most part it has been very profitable. Up until the house that we bought last week our purchases have only required minor renovations to get them to the point where we could put them up for sale, and I really thought that we had the hang of the whole “house flipping” business model.
It seemed too easy.
Unfortunately everything changed last week. We picked up a house that looked like a steal and we thought that we had another winner on our hands, but we were wrong. When we opened the door to the house, we quickly realized our mistake – the home smelled like mold. After a little more exploring through the home, we discovered that there was extensive water damage that would have to be dealt with before we could sell it.
I was worried that fixing this “little” problem was going to eat up all of our profit.
We consulted with a firm that specialized in mold remediation Los Angeles to get a feel as to what we had gotten ourselves into. After they came out and looked at the problem, they put together a plan that would solve the problem with the least amount of money.
Thankfully we were not in as much hot water as I thought.
By the end of this week the mold issues should be dealt with and we will be able to work on renovating the home. Hopefully we will be able to list it for sale by the end of the month. At this point I would be happy to break even on the property, but only time will tell how well we make out. It has definitely been a good learning experience that will impact how we buy properties into the future.
Up until yesterday, everything was on schedule for the property that we had been working on for the last couple of weeks. We picked up this small, three bedroom bungalow a couple of weeks ago with the intention of quickly fixing it up and flipping it for a profit. Like all properties that you are going to flip, speed was of the essence and the longer that we held onto it, the less money we were going to make.
In a nutshell, we were in a rush.
But we had not accounted for something to happen at the last minute. It was an accident, but the cost of once choice was going to make the difference of us being able to sell the home right away or wait until we were able to get it fixed up.
Let me tell you the story of how a broken window just about cost us a house sale.
It was the last day of the renos, and we were just doing the finishing touches and staging the home. The lawn had grown a little longer than I had liked, so I decided to take the lawn mower out and give it a once-over before being done for the day.
It really only should have taken twenty minutes, but I never made it to those last five minutes.
Disaster struck when I caught a rock in the lawnmower and it flung the rock through the window in the house.
It broke instantly. All of a sudden, the home was not in saleable condition.
It wasn’t exactly how I envisioned how the day was going to go.
But I had an ace up my sleeve. I had a buddy that worked installing windows in Glendale, and I called him to see if he could help me out. I explained the situation, and he hopped in his car and was replacing the window just a half-hour after we hung up.
It was exactly what I needed.
Thanks to the last minute window repair we will still be able to put the house on the market on Monday, and I am hoping that it sells right away. Fingers crossed that there are no other problems in the next few days.
Owning rental property comes with some big pros and cons. On one hand, it is an opportunity to make some passive income. Instead of putting in time to make the money, your investment keeps paying you back, month after month. In fact, every time I receive a rent cheque, it puts a smile on my face – it is one of the easiest ways that I have ever found to make money.
But it isn’t always a walk in the park. In fact, our experience this past week with our rental property in Los Angeles has not been a good one. Unfortunately for us, one of the water pipes in the basement of one of our units burst when the tenant were gone on vacation. When they came back, they were greeted with a basement full of water.
Guess who received a phone call about it?
And we had to deal with it.
I knew that we had no clue how to solve the problem, but we needed to get the rental unit back in liveable condition as soon as possible. We contracted a company that specialized in water damage restoration Los Angeles. We had them out to assess the situation and give us a quote on the solution.
We just received the quote today and accepted it, with the plan that the work will commence next week. I’m hoping that we’ll get everything cleaned up quickly.