Urgent - I need help

[Anna L.]

I purchased the small condo 3 months ago in Memphis are, and my first tenant moved in this month.

I spend amount of money for repair the unit.

Within a month after the tenant moved in, two issues happened already and today I got a call that main water pipe line has issue so the water is leaking from the ceiling and estimate $4000 to fix it. 

Can anyone answer the questions? 

1. I am not sure how the inspection company didn't find this major issue.

2. I got insurance last week, I am not sure if the insurance company will pay for that or should I call to HOA?

3. The management company didn't provide the quote in detail, they just say it will cost $3900. I am worried about their integrity. I experienced the same thing during the rehab. They didn't provide receipt or nothing, they just listed the items need to be fixed. Is this normal or what should I do with this? 

4. As a first time buyer of investment property with long distance, I am already exhausted with this headache and want to cry.  Anyone can share how you resolve all this issues and survive?

Thanks,

[Nathan Gesner]

Quote from @Anna L.:

It's not unusual to buy a property and have surprise maintenance issues pop up. It's not possible to see pipes inside the walls or ceilings, so it would be easy for an inspector to miss this.

Cut open the ceiling and remove sheetrock: $100

Repair leaking pipe: $200 - $300

Patch sheetrock, tape, texture, and paint: $1,000

There is no excuse for not giving you a written bid. I would demand they provide it to justify their pricing. I would also consider hiring your own contractor to see what they would charge (offer to pay them for one hour of time so they know you're serious).

[Matt Devincenzo]

Agreed with Nathan above, and in addition if this really is the main water line supplying the building or other units it is likely the HOA responsibility not yours. That said you may need to take care of damage control immediately and then work on reimbursement later, but this isn't something that should be a big issue. Overall it sounds like you may not have chosen a quality PM for the property, but that is water under the bridge at this point. Take a look at some of Nathan's past posts describing how to vet a PM and what to look for. That will likely go a long way to helping you build a real investment.

[James Martin]

I would ask for a written estimate detailing cost. When I see a price for several thousands I automatically assume it’s a dig job. What you just explain shouldn’t be anymore than a couple hundred bucks. 

[John Mocker]

Anna,

Who owns that water pipe and who is responsible for fixing it and the damage it caused should be governed by you Condo documents.  Review the Bylaws and the Declarations of the condo.  I would file a claim with the Condo Assocations policy first and let them come back to you with whether on not their policy covers it and why.   If you do not get the answer direct from the Insurance company (ie from the management company) ask for the Company adjuster's email and get it in writing from the Insurance carrier.  

If it is not covered by the master policy of the association then you need to contact your agent and have them put in a claim for you.

[Drew Sygit]

@Anna L. agree with @Nathan Gesner that PMC should give you detailed breakdown and at least pics, if not a video.

Disagree with @Nathan Gesner on his quick estimate - no one has any way of understanding the cost without more details. The $3900 estimate could be reasonable depending on the amount of drywall needing replaced, how much pipe needs repair/replaced, how easy/hard to get at said pipe, if they need to dryout the joists and/or treat for mold, how much painting is needed and how much tenant possessions they need to move or cover to do all this work.

If PMC won't give you more details, ask the agent that sold you the condo for a favor to take pics/videos.

[Anna L.]

@Nathan G. @Matt Devincenzo @James Martin @John Mocker

@Terez Jones @Drew Sygit

@Terez JonesThank you for all your advice. I really appreciate that. The construction company that I searched and called found out the issue came from the above unit, not from my unit. The heat was very high recently and the air conditioner above unit had some issue and the water dipped from the pipe of that unit and damaged my unit.

So I requested clarification to my property management company how they provided a quote without identifying the root cause, but haven't got any response yet. I claimed to the my insurance company and they will figure it out how it will processed. As a novice investor, all your responses are very helpful to move forward with this issue.

Terez, do you provide management service in Memphis area? I don't see that area on your website.

Thanks

[Terez Jones]

Hi Anna Lee...yes ma'am we do.  Let me know if I can assist in any way.  I would be more than happy to provide insight and advice.  Thanks!

[Steven Foster Wilson]

Quote from @Anna L.:

I purchased the small condo 3 months ago in Memphis are, and my first tenant moved in this month.

I spend amount of money for repair the unit.

Within a month after the tenant moved in, two issues happened already and today I got a call that main water pipe line has issue so the water is leaking from the ceiling and estimate $4000 to fix it. 

Can anyone answer the questions? 

1. I am not sure how the inspection company didn't find this major issue.

2. I got insurance last week, I am not sure if the insurance company will pay for that or should I call to HOA?

3. The management company didn't provide the quote in detail, they just say it will cost $3900. I am worried about their integrity. I experienced the same thing during the rehab. They didn't provide receipt or nothing, they just listed the items need to be fixed. Is this normal or what should I do with this? 

4. As a first time buyer of investment property with long distance, I am already exhausted with this headache and want to cry.  Anyone can share how you resolve all this issues and survive?

Thanks,

When I bought my first house with an FHA even, 2 weeks in the pipes started leaking in multiple areas thus we had to replace all the pipelines. I would definitely ask for a written out bill

[Henry Lazerow]

The HOA should pay forsure. The damage outside the pipe (interior of unit) should not be a high enough ammount to make sense doing a claim which significantly raises your rates on this and future properties so I personally would not file a insurance claim but if cash is tight it's understandable to do that. The inspector/appraiser do their best but can miss stuff it's not something you can easily hold them liable for unfortunately.