Joys of Home Ownership

Rewind: 2 months ago while in Florida, my roommate Davis gives me a call to let me know that the ceiling in the first floor dining room is dripping. Ummm ok I don't know what that means, I guess I'll wait till I get home to check it out. I get back from FL, inspect the ceiling, notice it looks a little stained yellowish. Press it, feels soft. Hmm water has to come from somewhere, and this spot looks like the shower might be overhead on the 2nd floor. Let me run the shower for about half an hour and see if any water comes down. None. Scratch head. Wait a few days...no water has been dripping. Problem must have solved itself! What a smart homeowner I am.

Fast forward: Last weekend while I was at a class on rehabbing real estate (ohh the irony) I get home and find out that the ceiling was dripping again. Now this time I take it very seriously. I spent all day looking at crappy houses that have all sorts of damage from water, termites, age, kids, smoke, gas, pets, and other sorts of wear and tear. I know the perils of H2O. Water is the enemy when it comes to houses, much like Oxygen is the enemy of prepared food.

I get home, poke around, ceiling's soft but not dripping right now. Does this mean the tub might fall through the ceiling and kill one of us? Is the water creating mold on the floorboards which will have long term health effects on future tenants? Will I get SUED?? Yes everything a landlord does should put 'will I get sued' in the front of his mind. Thanks rehab class, now I'm a paranoid schizophrenic. More on that later.

So I decide that I absolutely must find out what's causing the drip, cause it's not going to fix itself. I do some measurements, and realize that the drip is directly below the bathroom sink from the second floor, not the tub. I run the water in the sink for 5 minutes and sure enough, the drip starts up. Davis tells me to fix it whenever I get around to it. No way, this needs to be fixed immediately.

First I put a postit note on the sink to 'please not use it too much.' Then I call two plumbers for estimates. Apparently in these old rowhouses, the original plumbing starts falling apart after 40 years or so and this happens. Depending on how the plumbing wraps around the joists, the plumber can come up from the ceiling below and work from underneath (meaning I would just have to replace the piece of ceiling that was all rotted and drippy, which I would have to do anyway) OR if the plumbing goes over the joist, then he has to work from above and tear out the sink, rip apart the bathroom floor, tear out the toilet and i buy a new one, i pay to remove the concrete and miscellaneous shit and i have to buy/install a whole new bathroom floor. I am praying he can do it from below so it's less messy and so I can save hundreds of dollars, but we won't know till he cuts out a 'test piece' of the ceiling on Saturday to see where the joists are. Cross your fingers.

So this didn't faze me as much as it could have, probably because I've been attending these real estate investment classes. Whereas before I might have gotten really frazzled over paying $600-$1000 to repair something, now I see it as a necessary maintenance for a money producing investment. I saw a lot of examples of people buying a house for like $9,000 because no one else wanted it, fixed it up for $15,000 and sold it for $65,000. It's not as uncommon as you'd think apparently. This young guy taking the class with me bought a house off of foreclosure.com for $135,000 and has it contracted to sell in a few weeks for $216,900, in less than three months holding it. I'm sure none of these people cared about fixing plumbing, it's just something you do to get something you want (namely money).

Some other observations from my classes: Liability is a huge issue. Tenants will sue you all the time if they slip and fall. Well apparently mostly Section 8 tenants do that because they feel like the world owes them something. But cracked sidewalks, ceiling fans, and trees (sorry infiorno) are all a no-no. A lot of investors remove all trees from their property because if kids come by and hang out in your tree and fall, you get sued. Such a shame that so many trees must go just because courts award assholes money for nothing.

I heard of a 26 year old guy who own 40 rental properties. That's little more than 2 years older than me. He probably makes between $100 and $150k per year just in rents, after all taxes and expenses, and he doesn't have to do anything, just collect. He is set. That's where I'd love to be, but I don't know if I can pull it off in 3 years. 5 properties per year would be aggressive I think, but people say it's doable.

Excited about the prospect of this? I am. I feel like my day job is holding me back. I can't go to the courthouse and find good deals because I'm at work when they're open for example. I've been slacking so much lately and have no motivation to do anything at work. I can't wait to be done with it, someone just fire me already!