Six days before leasing signing, ceiling caves in!

122 Replies

Originally posted by @Todd Rasmussen:

@Jim K.

I'm in drywall country so I'd be out of my element with plaster. Fix the plumbing leak and get some fans running to dry it out and make it habitable for the incoming tenants is about the best I could do until I got someone out to fix it.

Hard to understand how anyone is in this business without at least some basic handyman skills or mild construction experience. Too many repairs and capital expenditures to occur without trying to pick some of it up. I think it's important to try and learn as much about the different aspects of one's business as possible. Everything you know saves you money, even if you don't self perform.

Repair looks good. New tenants won't even know it happened.

I think there's a chance that it would work out as long as you didn't buy anything built pre-1960 or anything tract-built from 1970-1995 or so.

You get a lot of contradictory advice from the gurus, Todd. "Know your business well, but don't work in your business." How are you supposed to know anything about renovation if you've never worked in any of it at all? People always bring up Andrew Carnegie as an example of someone who hired experts successfully. Carnegie never learned how steel is actually made. The Bessemer process was a mystery to him. He just knew how to hire people who knew how to make good steel.

I live in Carnegie's hometown, within walking distance of his greatest success and failure story, the site of the Homestead Works. Carnegie made it because he was a logistics expert, a railroad expert trained in the field by the Civil War, and that's what was needed to recognize it's potential for building railroad bridges and reinforcing concrete, and to bring cheap steel to market successfully. Carnegie didn't need to know how to make the steel, or keep up with advances in how it was made. The comparison to renovation is idiotic. I don't know how to mix up joint compound or glue bristles into a paintbrush. But I do know how to use a taping knife and cut in an accent wall.

Originally posted by @Sam Yin:

@Jim K. After catching up on this thread, it looks like there was never any emergency or real concern. You seem to have this already handled from the beginning.

Good job.

Hope the tenants are able to move in on time.

We all have differing methods of REI, and I respect your hands on approach. This thread serves as a good lesson for all members, mainly new guys like me, to pick up the many hidden gems after reading through the posts.

Glad you see this now in the spirit it was presented, Sam. No, there was no real emergency.

@Jim K. I agree with you....to a point...but this topic is perfect example of a lesson I learned from a past tenant that worked as an asset manager for several different multi billion REITs...I would  ask her about her world managing industrial and warehouse space for the REITs and one time she mentioned that in her company, and much of real estate business, there were two types of asset manager: First(like her) that was office/number/planning proficient and Second(like me), that was handy/technical/hands-on/field proficient

I would offer that, one is not  better off being more of one than the other, they both need to have some overlapping abilities or to be able to overcompensate in their area of expertise. IF you're a numbers person and buy the asset with enough income to justify the expenses, and have enough inventory and diversity, etc, you're gonna be fine, and that person would probably know how important/crucial a few solid tradespeople are for exactly your stated example

Best of luck!

The folks who are suggesting to call the insurance company obviously don't own several properties like this.  With several properties, the number of claims in this price range would quickly cause your rates to skyrocket or you would be cancelled.

Another gal suggested waiting for a contractor that may not be available until spring.  That is 6 months of lost income, and not many can afford that.
Originally posted by @William Coet:
The folks who are suggesting to call the insurance company obviously don't own several properties like this.  With several properties, the number of claims in this price range would quickly cause your rates to skyrocket or you would be cancelled.

Another gal suggested waiting for a contractor that may not be available until spring.  That is 6 months of lost income, and not many can afford that.

The craziness is even more evident when you see the actual materials cost of repair is around $50, by the way. I was locally quoted $2.5K to get this done in 6 days. My plumber-mentor told me I could expect to pay $300 for a professional to fix my leak in the upstairs bathroom faucet. I have no qualms paying myself $2750 for about 12 hours of actual light-duty handyman work at a rate of $229/hour. Beats the hell out of a teaching gig.

This is a $70K property, and I have $20K left in it right now. Rent is $900/month. PITI outlays leave me cashflowing $101.42/mo. on it right now. I am in the middle of selling two properties and fully expect to pay this off in about a year and refinance it along with several other paid-off properties to go after an eight-plex next year, which is why I bought this house in the first place.

$2800 to repair a stupid hole in the ceiling would mean I would be wiping out cashflow on this property for 2 years at the current rate.

How anyone survives to get into this game in cheap properties in low C-class in a place like this without significant handyman skills is completely beyond me: I've never met anyone who has even come close. The dreamers drop like flies in Western Pennsylvania. I'm almost past this stage in the business after ten years of fighting my way into real estate, and now I have more than an inkling why, at the get-rich-quick real estate seminars, the gurus have to put out that disclaimer that reads: "ASSUME THAT MOST PEOPLE MAKE NOTHING." They're trying to make you believe water isn't wet.

Originally posted by @Jim K.:

The only fake story I've made up on Bigger Pockets was one about finding $800K in the wall with a rusted Glock on top of it. OK, maybe a couple others about running an international real estate seminar training program that you pay in McRibs to get into.

Tiffany and the caved-in ceiling are 100% real.

McRibs story wasn't real? I'm heartbroken. 

Originally posted by @Steve K.:
Originally posted by @Jim K.:

The only fake story I've made up on Bigger Pockets was one about finding $800K in the wall with a rusted Glock on top of it. OK, maybe a couple others about running an international real estate seminar training program that you pay in McRibs to get into.

Tiffany and the caved-in ceiling are 100% real.

McRibs story wasn't real? I'm heartbroken. 

Able was I ere I saw McRib International Seminars...

It's a tough situation for sure. I'm in a small town of 9,500 people and skilled tradesmen are in short supply, particularly now with all the new builds and renovations going on thanks to "free" COVID money. However, I could still hire someone and get this done. It may not be finished by Monday, but it would certainly be livable by then. Buckle down and git 'er done, son!

Originally posted by @Isaac S.:

@Jim K. I agree with you....to a point...but this topic is perfect example of a lesson I learned from a past tenant that worked as an asset manager for several different multi billion REITs...I would  ask her about her world managing industrial and warehouse space for the REITs and one time she mentioned that in her company, and much of real estate business, there were two types of asset manager: First(like her) that was office/number/planning proficient and Second(like me), that was handy/technical/hands-on/field proficient

Good points, Isaac.  Just yesterday specifically I was both and would say, with experience in both, wearing my office/ planning/negotiating/scheduling hat is much easier.

You may never make more money per minute negotiating (or document drafting, making a tax move, etc)  but you'll never get crap done in the field quicker, cheaper and more effectively than when the principal stakeholder that knows what they're doing does it.  

People can certainly do both.  Have a curious mind and make it a point to learn along the way.  I'm not handy or I don't do numbers is just a lame excuse. 

Originally posted by @Mark Eaves:

@Jim K.

Two days including fresh paint.

That's not paint, that's JC used for texture. I didn't need my panda paw brush, it turns out. My wife said the existing texture was just rolled hawk and trowel, we tried it, she was right.

I was always under the impression that when you put plaster over drywall you are supposed to face the dark side of the drywall to the outside???

Originally posted by @Jack Orthman:

I was always under the impression that when you put plaster over drywall you are supposed to face the dark side of the drywall to the outside???

There is no plaster over drywall here. You are once more revealing just how little you know about this work.

Originally posted by @William Coet:

Another gal suggested waiting for a contractor that may not be available until spring.  That is 6 months of lost income, and not many can afford that.

so, for someone like me who does not know how to repair a fallen in ceiling, and in a location where subs are scheduling in the spring, what would you have me do?   I dont mind (and even relish) learning via google (almost everything I have learned repair wise is via google) but I cant really see me repairing a ceiling where there may be structural damage due to water.....   so, of course I would do my best to get someone out to repair it, but I would for sure let the tenant out of the lease because they probably cant wait while I figure it out.....   I have learned (the hard way) to wait for good subs rather than go with the guy that can do it right now....   

Originally posted by @Jim K.:
Originally posted by @Joe Splitrock:

@Jim K. here are my thoughts:

1. People suggesting to call the insurance company, NO. This claim in peanuts and even if it was covered, we are not talking much above deductible. Worse yet, you then have a claim on your record. People don't understand that excessive claims can get you cancelled. Only make claims in serious situations. If you think this is serious, it is not.

2. Having good people to do work for you means having people that will "fit your job in" if there is an emergency. I have a good handyman who came over next day when a drop ceiling fell down. I have a sheetrock repair guy that will squeeze me in and a good friend who hangs sheetrock. Basically I would just start calling people and go down the list. If your list has just one person, you are screwed.

3. Some jobs are better left to professionals. Even as a DIY expert, I will pass on many jobs because an experienced professional does better. I believe mudding and texturing is one of those things that needs someone with experience. I just don't do it often enough to get great at it. I could do it and have done it, but given the option I will let someone else.

4. Those who said to cancel the tenant move in, that makes no sense. Six days is eternity to get something this small fixed if you hustle. It is hardly serious enough to cancel a move in and you sure shouldn't loose revenue over it.

5. Be prepared to do anything to fix a problem. If I had to, I would do the sheet rock replacement myself. At least get the old stuff removed, cleaned up and new pieces up. Worst case if I was waiting for a person to mud it, that would be manageable with a move in. Not everyone has the comfort level or skill set, which is find. That just means you need to hustle to find someone else to do it.

6. There is room for DIY and "work on your business versus in your business". There is no reason for anyone to belittle someone because they choose to be hands on or belittle someone because they choose not to get their hands dirty. Yes Jim, you have "street credit" for your DIY skills, but if someone can get a drywall person over to do it just as fast, there is nothing wrong with that either. 

As always Jim, you pose interesting and thought provoking questions. Great discussion everyone!

 Thank you, Joe. I am very pleasantly surprised at how much sausage got made in this thread. I completely agree with you that DIY is not the way to go for everyone. But if anyone thinks that's going to save them work or time or heartache in a situation like this, hell no. One thing that is blazingly obvious to me about running rentals is that the clock stops for no one and it's all hands on deck doing WHATEVER THEY CAN until the problem gets solved. You can pay someone to take on that burden but it isn't going to be cheap and a competent person in this situation is worth a LOT more than what PMs typically make in the traditional payment structures we have for them.

What that means as far as hiring competent PMs to take care of a place like this I leave to those with the capacity to judge.

As for me, if I intend to survive, I had best get out of this property class. There's a clock on how long your body will do what you need it to do in this business. DIY is not any kind of good answer as the clock counts down and your age ticks up.

I think I'll bring up the skill issue you mention elsewhere, Joe, because you're also right about that.

 As for me, if I intend to survive, I had best get out of this property class. There's a clock on how long your body will do what you need it to do in this business. DIY is not any kind of good answer as the clock counts down and your age ticks up.


🙏👍

😀

@Mary M.

Found myself writing a book in response to this, but the long and short of it is, it's clear you're absolutely right, and Matthew is right, too. The fact that this is true is really important, and would, yes, take a book to explain well.

@Jim K.

This picture reminds me when I acquired my first small Multifamily fourplex in Phoenix. One day after closing I was I Dallas getting a training done for my then job then I get a call from the previous management and gives me the number of one of my property inherent tenant I called him and he says that his unit ENTIRE bedroom ceiling cave down. I called the insurance to handle that.

Knowing what I know now, the connections and relationships I have with handymen and contractors I would have called them right away I let them handle this minor job repair. The insurance they don’t fix the problem as in this picture (water leak) they fix the ceiling and that’s about it.

Originally posted by @Jim K.:

@Mary M.

Found myself writing a book in response to this, but the long and short of it is, it's clear you're absolutely right, and Matthew is right, too. The fact that this is true is really important, and would, yes, take a book to explain well.

yes, of course we are both "right".....  but I always feel the need to defend the POV that seems to be in the minority - and I feel passionate that alternative ideas and ways should be voiced so folks can see there are options and that you can make money by doings things differently than what is preached here on BP.  Believe it or not I will not take income if I feel I am not doing the right thing - so  I would let the tenant out of the lease and give them all their money back - because I dont want that weight on my shoulders while I try to get a repair that big - that is out of my ability - completed....  If i lose 6 months income? well I have reserves....... and I should not make money at the expense of another. (I believe making money is not a zero sum game)  I have to be able to sleep at night.....  and by now I know where my red lies are :) 

Anyway, i do wish I had started learning how to DIY stuff decades ago.....  I sure would of been more useful! 

Originally posted by @Jim K.:
Originally posted by @Jack Orthman:

I was always under the impression that when you put plaster over drywall you are supposed to face the dark side of the drywall to the outside???

There is no plaster over drywall here. You are once more revealing just how little you know about this work.

That is worse!!! You put an inch of drywall mud over the top of drywall???' Hope someone doesn't jump on the floor upstairs!

You are probably right and I don't know what I am doing. That entire ceiling patch is no more than a 4-hour job. Hang the button board, slap some 20-minute plaster on it, dry it with blowers for 24 hours and paint the ceiling. The huge difference with my work is; you will never every be able to know when a ceiling was patched because if we can see where the patch was we will tear the entire ceiling down and make it perfect, or we will skim-coat the entire ceiling. I am definitely not a fan of putting that heavy texture on any wall or ceiling and for every rental unit we own, including our office building built in 1904, we plaster every wall and ceiling as smooth as glass.

Originally posted by @Jack Orthman:
Originally posted by @Jim K.:
Originally posted by @Jack Orthman:

I was always under the impression that when you put plaster over drywall you are supposed to face the dark side of the drywall to the outside???

There is no plaster over drywall here. You are once more revealing just how little you know about this work.

That is worse!!! You put an inch of drywall mud over the top of drywall???' Hope someone doesn't jump on the floor upstairs!

You are probably right and I don't know what I am doing. That entire ceiling patch is no more than a 4-hour job. Hang the button board, slap some 20-minute plaster on it, dry it with blowers for 24 hours and paint the ceiling. The huge difference with my work is; you will never every be able to know when a ceiling was patched because if we can see where the patch was we will tear the entire ceiling down and make it perfect, or we will skim-coat the entire ceiling. I am definitely not a fan of putting that heavy texture on any wall or ceiling and for every rental unit we own, including our office building built in 1904, we plaster every wall and ceiling as smooth as glass.

Good Lord, Jack, just stop it. You don't know beans about this work, and you're proud to be ignorant. It's obvious already. You don't need to pile up your stupidities. Have you no shame, at long last?

The reasons I'm not writing a 2000-word post here painstakingly explaining to you and anybody still reading this thread what a fool you are in full glorious technical detail is because I don't have time today and you wouldn't be worth my time even if I had it.

Originally posted by @Jack Orthman:
Originally posted by @Jim K.:
Originally posted by @Jack Orthman:

I was always under the impression that when you put plaster over drywall you are supposed to face the dark side of the drywall to the outside???

There is no plaster over drywall here. You are once more revealing just how little you know about this work.

That is worse!!! You put an inch of drywall mud over the top of drywall???' Hope someone doesn't jump on the floor upstairs!

You are probably right and I don't know what I am doing. That entire ceiling patch is no more than a 4-hour job. Hang the button board, slap some 20-minute plaster on it, dry it with blowers for 24 hours and paint the ceiling. The huge difference with my work is; you will never every be able to know when a ceiling was patched because if we can see where the patch was we will tear the entire ceiling down and make it perfect, or we will skim-coat the entire ceiling. I am definitely not a fan of putting that heavy texture on any wall or ceiling and for every rental unit we own, including our office building built in 1904, we plaster every wall and ceiling as smooth as glass.

Can you explain what button board is and where it can be purchased?  Is it known by another name?  I did some searching and couldn't find anything about it.  I'm always open to new ideas. Thank you

Originally posted by @William Coet:
Originally posted by @Jack Orthman:
Originally posted by @Jim K.:
Originally posted by @Jack Orthman:

I was always under the impression that when you put plaster over drywall you are supposed to face the dark side of the drywall to the outside???

There is no plaster over drywall here. You are once more revealing just how little you know about this work.

That is worse!!! You put an inch of drywall mud over the top of drywall???' Hope someone doesn't jump on the floor upstairs!

You are probably right and I don't know what I am doing. That entire ceiling patch is no more than a 4-hour job. Hang the button board, slap some 20-minute plaster on it, dry it with blowers for 24 hours and paint the ceiling. The huge difference with my work is; you will never every be able to know when a ceiling was patched because if we can see where the patch was we will tear the entire ceiling down and make it perfect, or we will skim-coat the entire ceiling. I am definitely not a fan of putting that heavy texture on any wall or ceiling and for every rental unit we own, including our office building built in 1904, we plaster every wall and ceiling as smooth as glass.

Can you explain what button board is and where it can be purchased?  Is it known by another name?  I did some searching and couldn't find anything about it.  I'm always open to new ideas. Thank you

I haven't seen button board at DIY centers, but I think supply houses that sell only materials to plasterers still stocks button board since there are still some of the super expensive homes that want plaster and don't want drywall. As stated in my previous post, we always installs drywall with the dark side out when we plastered walls because the dark side of drywall is more absorbent and the plaster sticks better where the white side of drywall is shiny and plaster tends to crack and flake off. It is my understanding that drywall mud has some sort of glue or gooey substance that helps the mud adhere to the shiny side of drywall. My grandfather was a plasterer and he started plastering when they applied plaster to wood lath and when he built homes in the 1950's he was already using buttonboard. I used to love the smell of plaster drying in new homes.

I checked with two large drywall and plaster distributors this morning and neither ever heard of button board. At both companies, I think the Village Idiots answered the phones since when I asked what type board is used for plastering walls it was like I was an alien from outside our solar system.