Well, there has definitely NOT been a shortage of excitement around here lately.
Just a couple of days ago, we wound up in an Urgent Care for my son. Unbeknownst to us, he dislocated his elbow while playing. Fortunately, it was a quick adjustment and he’s perfectly fine again. However…
No sooner than 2 hours after leaving Urgent Care, I get a call from my property manager about my 3rd property. I didn’t pick it up because I was already exhausted from the prior situation, but on the voice mail, she said it was urgent and I needed to call her back right away (which has never happened before).
So, I called her back and I was met with some shocking and disturbing news.
“Michael, your tenants are okay, but your house is teetering on its foundation and might be lost. We need to know how to proceed.”
Say That Again?
Not surprisingly, I was not fully comprehending what she was telling me.
After a few minutes, I finally came to and digested her words. Apparently this past Tuesday night, there were substantial rains in the area. This can sometimes trigger a sinkhole, which occurred in this case, directly adjacent to my property!
Thank God, no one was injured, but the tenant (a small 3-person family) woke up to a massive hole (15′ x 30′ x 50′) outside the left window from the master bedroom.
They had the good sense to collect their major belongs and vacated immediately. Emergency crews were on site within 20 minutes and the entire area was roped off.
So, back to my call with my PM. She asked me how I wanted to proceed.
You see, situations like these aren’t always covered by the insurance because they are considered “ground movement”, kind of like earthquakes here in California.
The dilemma was should I try to hire a company to fill it with quick drying concrete to prevent further erosion ($9000 out-of-pocket), or leave it alone to apply for Federal funds which would require a rep to come see it in person (earliest we could get someone was within 48 hours).
Long Story Short
I won’t bore you with my entire analysis and endless Google searches, but I decided with my wife we would NOT take any action until the rep could see the damage.
The following day, the entire left side of the structure fell into the sinkhole!
OMG. I just lost half of a house into an abyss and POOF ~$164,000 in equity gone in an instant.
Hmmm… easy come, easy go I guess?
Well, as you can tell, I haven’t even been able to fully process this yet. I suppose I’m just writing this post to help me work through it.
There’s not much I can do about the structure anymore, but what I can do is help someone else…
Aside from all of this craziness, I felt really bad for the tenants getting displaced. They are the ones that physically lost all of their furniture, clothes, personal belongs, etc.
I asked myself what most landlords would do in this situation, and I didn’t like the hypotheticals that came up.
So, I decided to do something completely different.
I’m putting them up at the Four Seasons Hotel for a month until they get their immediate situations resolved. I’m even covering their daily expenses up to $1500/day completely out of my own pocket.
It’s the honorable thing to do, right?
After taking such a big financial hit this week, I’ve decided to give up real estate investing completely. I don’t think we can deal with another blow like this again.
I’d rather liquidate everything and purchase a hydroponics farm. We’ve always been keen on creating our own sustainable ecosystem.
It’s also an investment because I’ll take the fresh produce from here and create ready-made salad packs and sell them to the local markets.
Also, I hear that tilapia can be farmed in this nitrogen cycled environment too. So, why not produce some fish sticks while I’m at it? 😉
I bet within 2 years I’ll have earned back the full equity loss plus more!
I think that the moral of this story is to remember that not all stories are true (like this one), but there may still be a lesson to be learned.
We can’t always predict what comes our way, but we can certainly control how we internalize it.
It’s okay to be upset when things don’t go your way, but if you look hard enough, there will always be a greater lesson in there somewhere. The sooner you can find it, the quicker your suffering will end.
Happy April Fool’s Day my friends. 🙂 Thanks for the input from my newsletter readers!
Readers, where you fooled or entertained? Any guess as to which part of the post was actually true?