A new real-estate investor discovers $12,000 in water damage and rotted subfloor. Toby, who's done over 6,000 deals, walks him through it: the 20% contingency covers it, and he'll call the contractor himself to verify the damage before the investor panics.
This is Toby, can I help you?
Hey Toby, um, we've got a problem. We pulled up the old carpet and found water damage everywhere. My contractor's now saying that the subfloor is rented through half of the house.
Rented or rotted?
Uh, rotted, sorry.
So this is that property we just fixed a couple weeks ago, right?
Yes. He says it's gonna add another $12,000 and I'm panicking. That's eating into my profit.
This is why you come to people like me. See, if you remember, you kind of argued with me a little bit and I said, Hey, let's build in about a 20% contingency. We still got money to cover this work.
So I didn't totally mess this up?
You've never messed it up totally. But what I do hope is that you understand how important it is to work with people like us that kind of not only coach and mentor you, but kind of guide you and look out for you. Have your contractor call me because I want to make sure we've covered everything in the subfloor and in the joists and there's no other hidden issues at hand.
Man, you make this sound a lot less scary.
Well, after you've done over 6,000 deals in the last 10 years, we pretty much have seen it all. And we always say the best rule of thumb is to prepare for the worst and hope for the best.
Well, that sounds great. I, I do appreciate your help.
Let's get this project done, over with, and on the market. Okay?
Okay. Sounds great.
All right. Talk to you soon.
