Making the most of Bigger Pockets

[Ian Robinson]

  Hello all... I am new to the community.  I bought a 4-unit apartment building 2.5 years ago. The deal was solid and I had some expected cash in investment in the first year.  However, one side of the building unexpectedly needed a new roof.  I got 3 quotes, took the most reasonable and got a new roof.  The new roof leaks worse than the old roof, and in more locations.  That is not a loss I calculated for.  I spoke with 4 attorneys, all of them told me there's nothing they can do.  In addition, I recently lost 2 tenants.  This is a good opportunity to renovate those apartments and raise the rent in both units.  However, having lost $20k of my own money in a roof that still needs repaired changes things.  I want to renovate the apartments and fix the roof, but I would like to finance this.  Can anyone tell me how to utilize my Pro membership optimally?  I need advice on strategy moving forward with my investment.  Is strategy and planning a service of membership?  Thank you in advance for any advice you can give. 

[Stuart Udis]

A few things stand out, roof replacements should not be unexpected. Roofs are very easy to inspect with useful life determined. This points to a lack of diligence when the building was acquired 2.5 years ago. Secondly, you took the cheapest bid, did you verify all 3 bids covered the same scope and each roofing contractor identified the same roof issues? Did you perform diligence into the roofing contractor who was ultimately hired?  The contract should have included a roof warranty, and you should have received the contractor's insurance certificate, been listed as additional insured under the roofing contractors GL policy and received a copy of the insurance endorsement. 

Replacing a roof should never be framed as losing $20K of your own money.  It is a cap ex event that is necessary, and there were procedural things missed along the way that would have better protected you. Moving forward if the "as renovated and stabilized" value is sufficient you could use a construction to permanent financing product offered by most banks. 

You should view BiggerPockets as a networking platform and there is often helpful information and perspectives shared in the forums. You mentioned having a network of advisors and tools at your disposal but Judging by all the misses in how you handled the first 2.5 years of ownership perhaps you should use the opportunity to learn from others and build a better network of advisors to lean on.