Where should I begin!?
Despite listening to endless podcasts, reading blogs/ books on RE investing and thinking I had every precaution covered, I still made plenty of mistakes on my first deal that led to some hard times!
These stories are much more humorous now than while they were happening. I don’t know that my wife will ever think they are humorous, though…
The number one mistake I heard of (and still made) was not having enough funds reserved for unexpected expenses! I mean, sure, I did have some money saved.. But when it came down to it, there were way too many unexpected issues we did not account for beforehand because we didn’t expect them at.all.
Because our property was vacant and rehabbed before we purchased, we were quite satisfied after our home inspection that we were in the clear for any BIG surprises. Because our home was vacant, there was no way of me knowing about any leaks, heating issues, rodent issues, and electrical issues happening in the home despite getting a home inspection.
— A lot of times, when a multifamily home is on the market, current tenants will be very open about any outstanding issues in the home. A lot of these issues started popping up as soon as we moved in.
For starters…. the day we moved in was complete chaos.
The closing date kept shifting, and I had tenants waiting ready to move into the home we were living in. This meant t
hat the day after closing we had to move fast! Which also happened to be the first snow day of 2018 in New England.
Moving a 13” truck filled to the brim with furniture and moving boxes, in the frigid cold and dark was truly a nightmare. I am still so grateful for two friends of mine that braved the traffic and snow to help us during that awful, awful night.
That night, we also found a mysterious hallway light that had no power switch ANYWHERE. We still haven’t found the source of that light, and it remained on for months before the bulb finally went out… #120yearoldhome
During our first week in the home, outside temperatures were extremely cold. As soon as we decided to turn on the heating system on the second and third floor, they didn’t respond. We panicked! To be safe, we decided to leave the faucet running in the kitchens and bathrooms that night to prevent the pipes from bursting (which is a myth, we learned).
The next morning, my wife calls me frantically that our ceiling was leaking and there was a bubble – yes a softball s
zed bubble – of WATER under the p
aint in our bedroom wall.
For some context, we had lived in our
single family home for five years and didn’t have to call a
plumber once. So, we were quite un
prepared, shocked, stressed and overwhelmed! We had to break open walls and replace the plumbing all throughout the second and third floor kitchens. $800+ later… the problem was seemingly fixed.
This other issue, was by far the worst. I am not sure my wife has fully forgiven me yet for this one!
My family and I were out all day enjoying a family birthday party in the coldest month of February. When we got home that night, it was after midnight. My wife and I plus our daughters (3 and 10 months at the time) got home to a horrifically cold home. The heat was completely dead. It would no
t respond to the thermostat and it was clear that our home had been without heat all.day.
We didn’t know what to do! We had spent so much money already on other problems in the home, this was the last thing we needed financially. Needless to say, our emergency fund was gone at this point!
First we set up our girls in their room with a space heater. They were warm in no time (phew!). But we were still FREEZING! There wasn’t enough blankets in the world to warm us up and we only had one space heater. We knew it would cost a fortune for someone to come out on a Sunday night to fix our boiler – IF we even found someone.
So we did what any homeowner would do! We went into the basement and searched a million YouTube videos in the hopes this would be an easy fix we could try ourselves.
Unfortunately, we couldn’t figure it out…. But we did notice something interesting on our boiler. On the side of our boiler, in sharpie read “HEATING PRO” followed by a name and a local phone number. We didn’t know how long that had been written on there, but we took our chances hoping whoever worked on our home’s boiler before could help us now. What we mistakenly thought was luck, at about 1am, someone actually answered. That should have been our warning right there. Let’s call him Joe. He remembered the property and claimed he used to
work on it all the time for the couple who used to own this building. We told him what was happening and he said he could fix it in minutes. Of course I asked what would the cost be and he gave us a price we could not deny in the hopes for a warm night.
Joe comes by at about 1:30am and we are STILL freezing! When he arrived we automatically regretted our decision. He sure did NOT look like a “pro”. We were taken back by his slurred speech and just extremely odd ways. But we were desperate, and he appeared to know what he was doing! Luckily, a half an hour goes by and he “fixes” it. We pay the man and he leaves!
Unfortunately.. That same night it breaks down again. We ended up just enduring the cold and it was by far the worst night of sleep we ever had and we still talk about it today.
The next day we figured “hey… he fixed it once, maybe we are being judgemental…
let’s call him again”.
WORST.DECISION. After 2-3 days of time and money wasted with this sketchy guy, we realize that he knew nothing about our boiler and actually made the original problem WORSE, while we were still cold. We wasted more money and time with this guy and totally freaked my wife out (she’s still freaked out to this day). By the end of our time with this guy, I got hit with a stomach bug and so did our girls. Unable to move unless to puke, it was all up to my wife to get this guy out and find a reliable, safe, professional company to fix our boiler ASAP ($$$!!!!). My wife was exhausted and resenting me for trying to take the cheap route with this guy! I still praise her for handling this situation so well. Since this, we have learned that going the cheap way often ends up costing more money and peace of mind and now we ask for licenses and reviews every time!
Today, every time we hear the heat come on we still feel that sense of relief as if it was that first time it turned back on. Phew!
With mortgages due, major home repairs, and no tenants yet to help ease all of these expenses the financial burden was much higher than the reserves we had. Gladly, after a month or so of despair, we found our first tenants. But we couldn’t get the third floor rented until April!
I would advise making sure you have more than enough reserves saved, especially if you are purchasing a vacant property as I did! These scary surprises were NO FUN (and I only shared a couple).
My wife and I still talk about how that winter was the most challenging winter of our lives. But then again, good and rewarding things aren’t always easy. After all those trials, we undoubtedly will say buying the property was the best financial decision we made for our family, so I guess it offsets! – but still, always ask for licenses!!!!
Stay Focused, Be Positive!