- Joined
- Aug 31, 2007
- Messages
- 950
Recently I have run into a situation that I feel all of us can learn from. I pass it along FYI.
About 18 months ago I bought a 4plex in NE Edmonton, in my own name. (All my current holdings are held personally.) The seller took a sizable VTB.
Here is the Coles Notes version of the story.
In February one of the downstairs tenants reported a leak over the bathroom tub/shower. Investigating we found it came from the unit above. We also learned that the is SIGNIFICANT mold damage behind this one bathroom`s walls. We learned, too, that a previous repair, probably done by the Sellers, consisted of using plywood as a backer board in the shower stall above this bathroom. That plywood has now rotted, and is probably the source of the leak.
In short, the downstairs unit needs MAJOR restoration, and rebuilding. The cost is far more money that I have at hand right now, and with falling values in Edmonton, I have no way to raise it.
I believe the Sellers knew of the problem, in fact created it through their poor maintenance of the property. However, my lawyers advise that I have next to no grounds for legal recourse.
I have asked the Sellers to come to the table and help with the repair, in our mutual loong term interest. However, this couple seems not to understand doing so is a win-win situation, and that failing to do so in this case will end up being a lose-lose. Rarely have I come across anyone who is so rigid and controlling.
This property is probably going foreclosure. (Anyone want a good deal?) However, because all of my portfoilio is in my name, with fallen values recently, I am at risk of losing the entire portfolio in the domino effect.
The lesson I have learned is that all future purchases will be behind a coroprate shield. That would not prevent the loss of the first property in this case, but it would probably stave off the domino effect.
Yes, having a number of incorporations can be expensive to operate. However, we can lose our properties through no fault of our own when something in one goes south, putting everything held personally at risk. The several hundred $$ per year additional expense for a corporation pales in comparison to losing hundreds of thousands of dollars if things go wrong.
There is no longer any question in my mind about whether or not to incorporate. I hope you do not have to learn the hard way.
About 18 months ago I bought a 4plex in NE Edmonton, in my own name. (All my current holdings are held personally.) The seller took a sizable VTB.
Here is the Coles Notes version of the story.
In February one of the downstairs tenants reported a leak over the bathroom tub/shower. Investigating we found it came from the unit above. We also learned that the is SIGNIFICANT mold damage behind this one bathroom`s walls. We learned, too, that a previous repair, probably done by the Sellers, consisted of using plywood as a backer board in the shower stall above this bathroom. That plywood has now rotted, and is probably the source of the leak.
In short, the downstairs unit needs MAJOR restoration, and rebuilding. The cost is far more money that I have at hand right now, and with falling values in Edmonton, I have no way to raise it.
I believe the Sellers knew of the problem, in fact created it through their poor maintenance of the property. However, my lawyers advise that I have next to no grounds for legal recourse.
I have asked the Sellers to come to the table and help with the repair, in our mutual loong term interest. However, this couple seems not to understand doing so is a win-win situation, and that failing to do so in this case will end up being a lose-lose. Rarely have I come across anyone who is so rigid and controlling.
This property is probably going foreclosure. (Anyone want a good deal?) However, because all of my portfoilio is in my name, with fallen values recently, I am at risk of losing the entire portfolio in the domino effect.
The lesson I have learned is that all future purchases will be behind a coroprate shield. That would not prevent the loss of the first property in this case, but it would probably stave off the domino effect.
Yes, having a number of incorporations can be expensive to operate. However, we can lose our properties through no fault of our own when something in one goes south, putting everything held personally at risk. The several hundred $$ per year additional expense for a corporation pales in comparison to losing hundreds of thousands of dollars if things go wrong.
There is no longer any question in my mind about whether or not to incorporate. I hope you do not have to learn the hard way.