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Burned by FIRE
Old 08-21-2007, 10:09 PM   #1
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Burned by FIRE

I am physically, mentally, and emotionaly burned out. I am 33 yrs olds and my goal was to retire at 35 or atleast be FI at that time. My wife is 32 years old and has not worked for 2 1/2 years. We are lucky enough that she has the option not to work and instead be a full time mommy to our 18 months toddler.

We do not work in the government and we weren't getting any pension from our company. We did not have high paying salary. In my mid twenty I knew that I wanted to FIRE. (I am so glad that this forum exist. I thought that I was the only one thinking of RE before 40). Therefore we got into the landlord business. We had six units. But, last year in July, we bought a fixer upper triplex. When we took prosession of it, two of the tenants were evicted and middle floor tenant stayed. The tenants were evicted for a good reason: did not pay their rent and destroyed the property. The top and basement tenants had to be escorted out by the sheriff and left behinds their belongs. And my god there were lots of junk left behind.

I decided to fix the top floor first. I spent numermous hours working evenings and weekends while holding a full time job... Got it looking pretty and rented out by Nov. 06. Then I worked in the basement. The basement experienced a few flood that the last landlord ignored. There were molds on the walls. When I removed the floor, there were 5 layers of different flooring that the past owner(s) used to cover up. I had to demo the hole basement, redo all plumbing, re do electrical . .. it took me until mid May to have it finished ready for showing.

My middle floor tenant gave his two months noticed and left on June 07. As nice as the basement looked we had a hard time renting out the basement. But found a tenant for July 07.

I had put in lots of hours but I was near the end. The basement floor is rented out now and all I had to do was the middle floor. But only days after the new basement floor tenant moved in, there was a flood. The storm/sanitary water had backed up. The city worker came to inspect the place and deemed the place unhealthy to live due to the fecal matters. We had to get someone to clean up the mess. The brand new (less than a week old) wood laminant flooring and wood subfloor ( which I built) had to be removed. ... they destroyed the basement while removing the contaminent material, ie floor and drywall.

One year after we brought this triplex, I am still working on it. This triplex has absorbed all my energy. I am very tired and exhaust. I want to FIRE but I feel that I sacaficing my time with my family. When I get home a night my son is usually sleeping.

Like most of us on this board we like to FIRE. I have not posted much or got involve with any of the blogs. I am more of a lurker. I am doing this hoping that some else have shared similiar experience. I am hoping to read yours to get motivated to finish the basement again.
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Old 08-21-2007, 10:38 PM   #2
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Sorry to hear that! It sounds just awful. We have just one single-family rental and even that I am ready to sell. I realized I'm not quite landlord material, although we do plan to do quite a bit of fix up before we sell it next year.

My only thoughts are:
1. Will your insurance pay for the sewer damage?
2. Will it cash flow without the basement unit?

Basements are always prone to flooding, even with very good grading, etc., IMO.

Don't feel discouraged if this isn't working too well right now. Part of being an entrepreneur is taking risks and making your own path. Frankly in this market I don't know if newly purchased real estate works that well, but of course it's totally case-by-case. It sounds like you really needs more time with your wife and kid. Try to make it a priority, however much you can.

Just remember there are hundreds of ways to FIRE...You'll get there as long as you're consistent and LBYM.

Good luck!
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Old 08-22-2007, 01:28 AM   #3
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Sorry to hear about the rental problems VT.

I am not a landlord nor do I dabble in real estate (other than REITS). So I do not have personal experiences to share.

But my father owned an apartment building for about 20 years. He eventually sold it. I can share his observations. When he sold the property, he made some money on the appreciation. Of course, he had a loan and received rent for those years. While I do not know the actual figures, I think he did have a net positive cash flow. But, if he factored in his effort to run the place and maintain it, I do not think he made what he could have by just getting a second job. My take, he owned a second job and took on the business risk of owning rentals.

IMHO - The rental game requires scale. I would look at the investment from an opportunity cost and risk perspective. If you are investing your $ in the rentals, where else could those $ be invested and what would be the risk/return. Likewise, if you doing the work... what alternative is available to you to work and make money? The big question is which would make you better off?

Good luck and keep us posted
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Old 08-22-2007, 09:07 AM   #4
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Originally Posted by vt74 View Post
I am physically, mentally, and emotionaly burned out. I am 33 yrs olds and my goal was to retire at 35 or atleast be FI at that time.


One year after we brought this triplex, I am still working on it. This triplex has absorbed all my energy. I am very tired and exhaust. I want to FIRE but I feel that I sacaficing my time with my family. When I get home a night my son is usually sleeping.
Well, nobody said FIRE at 35 on a single income with a wife and child was easy. You've set an ambitious goal, and nothing but hard work and more hard work will get you there.

I think the question you should ask yourself is whether you're willing to kill yourself for the next few years to try to FIRE at 35, with all the time away from your wife and son that this might require, or whether you would prefer to semi-FIRE at 35, or FIRE at 40 (or 45, or whatever) and have more time to spend with your family right now and until you reach FIRE.

Only you can answer that question. I have no doubt you'll be able to complete this specific basement job sooner or later, and you'll feel good when you do; until the next landlord problem arises. So I think it's a good time to evaluate whether you might not be better off selling the real estate investment and putting your money into something that doesn't require as much of your time and energy.

Just my two-cents. Good luck!
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