Not Going Well - Seeking Advice for Rental Property Challenges
Investor · Glen Burnie, MD · Member since 2017 · 22 posts · 3 votes
Not Going Well - Seeking Advice for Rental Property Challenges
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Member since 2018 · 1k+ posts · 1k+ votes
2yQuote from @Ade Akingbade:
Last month, I purchased my first rental property in Baltimore for $117k and invested an additional $13k in renovations. Since then, I've encountered several significant issues:
1. **Air Conditioning:** The AC unit is malfunctioning.
2. **Basement Water Damage:** The walls in the basement are wet up to 15 inches, and it appears that water is seeping in from the ground.
3. **Neighboring Property Condition:** The adjacent row house doesn't have a roof, which may be contributing to my issues.
Additionally, I'm struggling to find a tenant. I'm considering selling the property, but the financial numbers don't seem to justify this move. A little overwhelmed!
I would greatly appreciate feedback from those with experience in property management or similar challenges. Any advice or insights would be valuable.
Thank you!
was the water damage visible in the basement when you bought?
Stop looking at purchase numbers. You don’t have the experience. Dump this place, buy a decent place near where you live that doesn’t have physical issues. Start small, slow, and smart.
30 Replies
- Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes2y
@Ade Akingbade before you do anything you need to find someone local and competent to help you. And run from the person who got you into this mess. You have two options, either push through or pull out.
If you push through, that means buying the shell, get a roof on it. You can rehab it later. Focus on the first one. Get it stabilized with a good tenant, a little lower rent if you have to, I am tempted to suggest skip the PM and put your own time in - but I don't know your people skills.
As an exit strategy, either keep them rented or sell them to your tenants with a lease option. Help them build credit and afford their own place, so they can buy it in a year.
This will require time and money. And there is risk. You should only do this with an experienced investor helping you, don't attempt this alone.
Option 2 is to cut your losses. But it might be a deep cut, depending on how long the unit has been on the market before. Sometimes this is the better option. At least you should be able to use the losses to offset your next deal's profits.
My team works quite a bit with OOS out of State investors in Milwaukee. Most reach out to me, because they have seen 100k properties on Zillow and are looking for an "investor-friendly" agent to help them buy it.
- Real Estate Agent · Stroudsburg, PA · Member since 2024 · 17 posts · 7 votes2y
Hello! (Coming from a property management and licensed agent background) This situation seems overwhelming, and I am sorry to hear this happened. Dump it seems to be the first thought here- but from your post it looks like you are seeking the unicorn solution here. Maybe not a unicorn- but a couple options I came up with: 1)Would you consider seller financing? Seller financing can be a way that 1) You aren't hemorrhaging mortgage payments while paying for work to be done. Maybe under the right terms the buyer you find may chip in to help with the water damage. (The AC unit is a smaller affordable fix in comparison). 2) Why are you struggling to find a tenant? Are there terms of the lease that make it unattractive to perspective renters? Is the rate above what is affordable in that area? (which may be lower than expected since you described the area as not awesome). 3) Rethink your numbers in dumping it- with an estimate for repairs in mind. I would get a good licensed contractor to look at the water issue, and review the repair cost in terms of how many months of income this would suck from the investment. This may make the decision easier for you. I hope this helps, and wish you the best luck!
- 2yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Autumn Cain:
Hello! (Coming from a property management and licensed agent background) This situation seems overwhelming, and I am sorry to hear this happened. Dump it seems to be the first thought here- but from your post it looks like you are seeking the unicorn solution here. Maybe not a unicorn- but a couple options I came up with: 1)Would you consider seller financing? Seller financing can be a way that 1) You aren't hemorrhaging mortgage payments while paying for work to be done. Maybe under the right terms the buyer you find may chip in to help with the water damage. (The AC unit is a smaller affordable fix in comparison). 2) Why are you struggling to find a tenant? Are there terms of the lease that make it unattractive to perspective renters? Is the rate above what is affordable in that area? (which may be lower than expected since you described the area as not awesome). 3) Rethink your numbers in dumping it- with an estimate for repairs in mind. I would get a good licensed contractor to look at the water issue, and review the repair cost in terms of how many months of income this would suck from the investment. This may make the decision easier for you. I hope this helps, and wish you the best luck!
As a BRRR lender in Balt city in the inner city and row houses like this one is.. The reasons he cant get a tenant other than the physical problems with his house.. Is having a Shell next to him really hurts and most renters dont want to live right next to that.. We all know the Block to Block saying but in these areas of extremely tight living conditions its not only block to block but houses to house. - Rental Property Investor · New York, NY · Member since 2011 · 956 posts · 510 votes2y
Maybe by the roof- less house next-door if you can get it cheap?
- Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes2y
@Ade Akingbade- thanks ....sell the property asap ...sounds like a money pit that is jsut getting deeper and deeper ...
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