{"id":120600,"date":"2019-12-20T05:00:00","date_gmt":"2019-12-20T12:00:00","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=120600"},"modified":"2023-08-08T15:46:12","modified_gmt":"2023-08-08T21:46:12","slug":"my-investment-property-burned-down-what-now","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/my-investment-property-burned-down-what-now","title":{"rendered":"My Investment Property Burned Down\u2014What Now?!"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm?e=BIGPOC4206207425&#038;light=false\" width=\"100%\"><\/iframe>  \n\n\n\n<p>I want to paint a scenario for you. Whether you&#8217;re new to investing or a savvy investor, think through this for a second.<\/p>\n<p>You&#8217;re sitting there on vacation. You&#8217;re enjoying the time of your life, but then you get a phone call. And on that morning that you get that phone call on your vacation, it&#8217;s the fire department from the city that all your investment properties are in.<\/p>\n<p>The fire department says, &#8220;Hey! You know that property that you purchased and dumped a ton of money into?&#8221;<\/p>\n<p>And get this, you&#8217;re in the middle of rehabbing. In fact, you&#8217;re almost <a href=\"https:\/\/www.biggerpockets.com\/blog\/2014\/01\/07\/flipping-houses\/\" target=\"_blank\" rel=\"noopener noreferrer\">done with the entire rehab<\/a>\u2014about ready to put it on the market.<\/p>\n<p>But the fire department says, &#8220;Well, it just burned down\u2014not to the ground but thoroughly burned down.&#8221;<\/p>\n<p>What do you do? What do you do when you received that phone call?!<\/p>\n<p>I&#8217;ll tell you what I did. I ran around looking for my homeowners insurance policy on my computer until I knew that I had homeowners insurance!<\/p>\n<p>But in this business, you&#8217;re going to have a whole bunch of adversity that happens to you. It happens to everyone\u2014eventually\u2014in real estate investing.<\/p>\n<p>Like I said, we were almost done with this particular property we&#8217;d bought. It&#8217;s in Seattle, Wash. Finishes were going up, we were getting ready to list it. But if you check out the video below&#8230; you can tell the finishes aren&#8217;t there anymore!<\/p>\n<p><iframe loading=\"lazy\" src=\"https:\/\/www.youtube.com\/embed\/zxxGxgj_NBE\" allowfullscreen=\"allowfullscreen\" width=\"560\" height=\"315\" frameborder=\"0\"><\/iframe><\/p>\n<p>It&#8217;s gone. The fire wiped it all out.<\/p>\n<p>And when somebody breaks into your house and sets it on fire, which is what happened here, there&#8217;s not much you can control. So, <em>that&#8217;s<\/em> adversity. That&#8217;s something that&#8217;s going to happen.<\/p>\n<h2>How to Mitigate Risk as a Real Estate Investor<\/h2>\n<p>I want to go over with you guys some tips and tricks that may be able to help mitigate some of these things in the future. Here&#8217;s what you can do as an investor, because no matter what you do, crap is always going to happen to you.<\/p>\n<h3>1. Plan for adversity and expect things to happen.<\/h3>\n<p>In this scenario, we had homeowners insurance. But what can you do to mitigate risk in other aspects?<\/p>\n<p>Maybe it&#8217;s dealing with contractors. Do you have contracts in place to deal with your contractors and vendors?<\/p>\n<p>Maybe it&#8217;s when it comes to buying properties and inspecting them. Do you get a homeowner inspection so that you can find out all the issues that are happening on the property before you buy? That way, you&#8217;re not surprised by anything after you buy it.<\/p>\n<p>Maybe running solid comps and knowing the market before you buy a property. Those are all things you can do to help reduce or eliminate any confrontation or adversity that you might have on a project or investment property after you purchase it.<\/p>\n<p><strong><em>Related:<\/em><\/strong> <em><a href=\"https:\/\/www.biggerpockets.com\/blog\/property-walk-through-marijuana-grow-house\" target=\"_blank\" rel=\"noopener noreferrer\">Property Walk-Through: Illegal Marijuana Grow House Fix &amp; Flip<\/a><\/em><\/p>\n<h3>2. Recognize what you can and cannot control.<\/h3>\n<p>Focus on what you can control, not what you can&#8217;t. The challenge is, you can get very emotional in the business\u2014especially when your investment property burns down.<\/p>\n<p>Think about it though. Can you change it? Can I get the fire out of the house? No, I&#8217;m not a firefighter. I can&#8217;t go back in time. I can&#8217;t stop the people who broke in.<\/p>\n<p>Maybe we could&#8217;ve had security cameras, but even then, would that stop them? I don&#8217;t know.<\/p>\n<p>So, what I can do is focus on what I can control. I can control filing the insurance claim. I can control cleaning the property up a bit. I can control what I&#8217;m going to do with the property, because I still own it.<\/p>\n<p>I can control those things.<\/p>\n<p>What am I going to do on this property? Well, I&#8217;m going to clean it up, which we did.<\/p>\n<p>And now I&#8217;m going to put it back on the market and let the whole circle of real estate investing continue. I&#8217;ll let some other investor buy this thing from us and move on. They can fix it up.<\/p>\n<p>We&#8217;ll take our insurance because we had it. We&#8217;ll sell the property, and we&#8217;ll move on with our lives. That&#8217;s what I can control.<\/p>\n<p>I could also fix it up. I could control that, but I don&#8217;t want to. I&#8217;ve already spent seven months on this project, and I&#8217;m kind of done with it\u2014especially after it burned down. Little bit of emotion there, but I&#8217;m done.<\/p>\n<p><strong><em>Related:<\/em><\/strong> <em><a href=\"https:\/\/www.biggerpockets.com\/blog\/fix-flip-marijuana-grow-house-part-2\" target=\"_blank\" rel=\"noopener noreferrer\">Property Walk-Through: How to Budget a Rehab on a Hoarder Property<\/a><\/em><\/p>\n<h3>3. Deal with what &#8220;is&#8221; and not with what &#8220;isn&#8217;t.&#8221;<\/h3>\n<p>You have to look things squarely in the eye and know what you&#8217;re actually dealing with. Focusing on all the things that something &#8220;isn&#8217;t,&#8221; isn&#8217;t going to help you in this business.<\/p>\n<p>What I mean by that is, whether it&#8217;s a property you bought that you know that you&#8217;re going to lose money on, you have to deal with it. Or whether it&#8217;s a contractor that doesn&#8217;t show up to the job\u2014well, you still have the job. You&#8217;ve still got to get it finished.<\/p>\n<p>Maybe it&#8217;s an offer on a house that you didn&#8217;t like. Maybe it&#8217;s that some employee of yours is not showing up. Maybe it&#8217;s that you&#8217;re running out of money; your finances aren&#8217;t as strong as they once were.<\/p>\n<p>Who knows? There are so many things! Maybe your business partner&#8217;s not doing what they&#8217;re supposed to do.<\/p>\n<p>You have to stare at it and know what you&#8217;re actually dealing with\u2014and then go deal with it, not with what it isn&#8217;t.<\/p>\n<p>And that&#8217;s the best thing I can tell you. Adversity is <em>going<\/em> to happen to you in this business, whether you&#8217;re brand new or have been crushing it for years.<\/p>\n<p>For those of you guys who have been crushing it for years, you know exactly what I&#8217;m talking about here. And for those of you guys starting now, don&#8217;t be scared of any of this! We&#8217;ve all had to deal with it.<\/p>\n<p>Hopefully, you never have to deal with a burnt down house though. This is something new. I&#8217;ve never had to deal with this before.<\/p>\n<p>But this post was all about making the best of it\u2014dealing with what &#8220;is.&#8221;<\/p>\n<p>I hope this never happens to you! And I hope it never happens to me again either.<\/p>\n<p><a href=\"https:\/\/www.youtube.com\/user\/BiggerPockets\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-114268\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/6.jpg\" alt=\"ad-youtube-channel\" width=\"706\" height=\"125\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/6.jpg 706w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/6-300x53.jpg 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/6-702x125.jpg 702w\" sizes=\"auto, (max-width: 706px) 100vw, 706px\" \/><\/a><\/p>\n<p><em>Has anything like this happened to you or an investor you know?&nbsp;&nbsp;<\/em><\/p>\n<p><strong>If you enjoyed this video, &#8220;like&#8221; it on YouTube, subscribe to the <a href=\"https:\/\/www.youtube.com\/user\/BiggerPockets\" target=\"_blank\" rel=\"noopener noreferrer\">BiggerPockets YouTube channel<\/a>, and comment below!<\/strong><\/p>","protected":false},"excerpt":{"rendered":"<p>Picture this: You&#8217;re on vacation, and your phone rings. It&#8217;s the fire department notifying you that a property you own just burned down. What do you do?! After double-checking that I had homeowners insurance, here&#8217;s what I did next.<\/p>\n","protected":false},"author":11405,"featured_media":120687,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5524,7119],"tags":[],"class_list":["post-120600","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-investing-for-beginners","category-biggerpockets-daily"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/120600","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/11405"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=120600"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/120600\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/120687"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=120600"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=120600"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=120600"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}