I don’t know if this is a typical “success story.” If it is, the success is only a result of lessons learned. I just finished my first deal. I bought a rehabbed property from another investor. Prior to the purchase, I had an inspector do a thorough review of the house. His review said there were some minor issues, but that the house was acceptable, and as a result, I made the purchase.
The financial specs were pretty good. Zero down, $400 cash flow per month. But, at the end of the first week, the tenant called me with a problem: The floor drains were backing up in the basement. I had a plumber come out ($80) to tell me I needed a “drain technician.” The drain tech found a mass of roots in the clay drain (which was severely cracked) running from the house to the city sewers. ($250 for mini-cam, roto-root, and de-rooting foam job.)
Two days later, the tenant called; the gas stove had died. The stove guy ($40 visit) said I needed a new stove ($238.50).
One week later, the tenant called back: More water in the basement. The first drain tech and the other one who provided the second estimate agreed: Excavate the font yard and replace the clay drain with PVC. Price: $3,500; the job is being done as I write this.
So, why is this a success story? My answer is–attitude. This calamity, appropriately attributed to a surprise visit by Mr. Murphy and his Murphy’s Law, has not discouraged me. If anything, I have learned some valuable lessons. In post acquisition costs, I’m over $4,000. For this money, I learned these lessons, all of which were provided by the techs who worked on the house:
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Get a general inspection – $250
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Get an appliance inspection – $50
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Get a drain tech inspection – $100
The appliance guy will tell you everything you should know about all of the appliances (stove, fridge, washer, dryer, garbage disposal, furnace, hot water heater, sump).
The drain guy is really a plumber who specializes in drains and has a mini-cam that he can use to get in to nooks and crannies: plumbing, foundation, drains, electrical, you name it. He can run that camera in to the strangest, most remote places. He’ll find out what’s really going on.
Had I spent an extra $150, I could have avoided the other several thousands. And I learned how to find and work with contractors.