BiggerPockets

Hey guys,

Just this morning I got news from the contractors that the bedrooms in the last unit of my 3 unit property needs complete gut job and is gonna end up costing me $2,000.

Not a good way to start the morning. So I just wanted to know how do you guys deal with setbacks? I had plans to go out and look for my 3rd investment property this weekend and I had been so excited about it till last night. But since this morning I am doubting myself that whether I am doing the right thing or not. I am just wondering if I am moving too fast for my own good. I have bought 2 investment properties in last 6 weeks and had plans to buy the 3rd one in next couple of weeks.

Do you guys ever have self-doubt or did you when you started out? This $2,000 expense is not a big deal, the property will still make money. With all the expenses combined (purchase price + rehab), it will come out to about $55,000 and I already have tenants lined up for total monthly rent of $1,800/month and with tenants paying the utilities. But I am started to doubt myself now.

Sorry for the long post. I guess I am looking for some guidance. I am a little confused.

I think that you should always plan for setbacks when you are putting your deals together. That way if you are lucky enough not to have any then you gain more profit. The best part about what you are doing is that you are learning how to clean it up and what to look out for in the future. No one said investing was easy but it can be well worth it. As a rule you should always remember that due diligence has its rewards and to always underpromise and overdeliver. I think you'll be fine.

I agree that you gotta try your best to expect the curve balls. Every deal has challenges and set backs. Only the people that won't quit really profit in this business.

A cocktail helps though... :-)

Max, next case. Go get the other property. Don't even let yourself doubt your actions. If it was a over budget discomfort, well: that's b/c it's a rehab - what could go wrong, could and will go wrong-....
The advice that was given to you here was keen.
Framing, subfloors, electrical,etc..,on
a gut job: just add up. Demolition opens up
all kinds of attention to be given. Max, you are doing very good and you will progress more spontaneity when you move on. Congras, and may the best be with you always. Here is for you to ponder 'The gem cannot be polished without friction, nor man perfected without trials.- -- Chinese proverb

If it wasn't for the dream, I'd quit.

I've got a dream, and RE is simply a means to fund it. The dream keeps me going when this business hurts.

Setbacks have happened to me, and some more painful. But I've learned not to repeat those mistakes.

Having a business collegue I can talk with helps.

Setbacks are what make life interesting Max. Wouldn't it be boring if everything worked out the way you wanted? I've always found that every negative that happens to me ends up becoming a huge positive but at the time, I find it very hard to see the positive.

Personally I think you should see setbacks as something that shows you're taking action and getting results. You just need to take more action to have the positives appear. You shouldn't worry about this though. My parents had a lady that was suing us at one of our rental properties one time, my brother had a heart transplant, my friend jumped off the golden gate bridge, and another friend I know died before he finished high school from a seizure.

We all have setbacks but it's how you look at it and what you do about it. The really successful people are quick to get out of negative events and start taking action right away to have some better "luck" come there way.

I think the only way to cope with a loss is to go out and have a more successful, rewarding life.

There are setbacks with almost all properties. If I can't control them or know exactly where they are, I have it surveyed.

Surveying your setback will let you know right where you are with a property and how far you can build upon that property. If your setback is much, and you can't proceed as planned, you might sell it and let someone else address the issues.

Great advice from everyone. Things happen, and the way my husband and I sleep at night is to have money in reserve. So far, all our investment properties had more repairs than we expected, although we estimated they could run high. We were pained by the extra expenses, but knew they could arise and had planned for them.

It's normal to feel doubt when things don't work out exactly as you planned. But they did work out to a high degree for you, and you have to look at the long term. Our first rental property's repairs cost 3 times more than what we had expected. A burst pipe in the 2nd property was also unexpected, as was an eviction soon after.

We just turned over a rental property, and the tenant hadn't paid the water bill and the water had been shut off.

I verified the bill with the water company, including the restoration fee, and deducted that from the tenant's security deposit. What I hadn't thought of was that the water company was going to do a final bill, and the convoluted way they calculated it came out to another $200. I had already given the tenant back her money.

Lesson learned - never give back a security deposit until all repairs and final utility bills are calculated and documented. If your state says you have 30 days to give it back, take the 30 days.

Other lessons...if you persevere, and keep learning, you'll make money. If you quit, you'll make nothing.

Honestly, it's really the obstacles and frustrations that I've faced where I've learned the most in this business.The key is learning how to get past the obstacles and really having the drive to push forward. Usually, it's a good idea to bring in different perspectives when faced with issues and problems. There have been so many times where I've conferred with others to help solve an issue. It's good to know there are others out there willing to listen and offer their insight and expertise. Hope that helps!