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Durham REI June Super Meeting
06-04-2016 09:00 AM
Category: Durham REI Regular Meeting
Real Estate Investor News
In 2012, my wife and I purchased our first property. We were new to real estate, new to hiring contractors and had only a small idea on what labour and materials may cost to begin our maiden voyage. The property we had purchased was with a realtor through the MLS, and also happened to be a bank sale property which meant no warranty, no information and no previous contact with the original owner. It was a risk, flat out.
Despite being told by a couple people that the property looks like a money pit and was in total disrepair, we couldn't pass up on the opportunity since the land itself was perfect for our lifestyle and boasted future potential in our eyes.
Like most country properties, this location was serviced by well water and a septic tank, also of which was brand new to us and sounded like another avenue of education to learn the tips and tricks on. Prior to purchasing the home, we had a well inspection, and a septic inspection, both of which came back positive which satisfied us to move forward with the deal.
Within the first couple weeks, the well pump began to surge on and off which caused high electricity bills and an unusual water pressure situation. We called a water well contractor in to have a look at the problem, of which he told us that the foot vale in the bottom of the well needed replacing and the jet pump was old, it may be worth replacing as well. The estimated cost of this was somewhere around $3,000-$5,000 (but who really knew the final price at this point). That would have all been fine to do, except our water well was different. Our water well was artesian, which means that should the cap be removed from the well head, water shoots out like a Texan oil geyser and the situation gets ugly, real quick. Before we went any further, I called in for a second opinion. This contractor had mentioned that the water well was probably old and needed to be re-drilled anyways, it's not worth repairing. This was going to cost $20,000+.
To many families, and especially a first time home buyer, $3,000 was a ton of money, and $20,000 was insanity. Clearly our water well inspection wasn't worth the price since there was issues right away, and clearly there was a sincere disconnect between both contractors quoting the repair. I had to get creative.
After not knowing anything about water wells or foot valves, I quickly became educated on the function of a water well, how it worked, why it worked, and some ways that other people have proven repair methods over the years. Using all of these tools to my advantage, I also got in touch with Service Canada to located my well record specifically, back from the 1960's. I now knew how deep this well was, how it was created, where it terminated, who did it, and what to expect. I then dove into the cycling pump problem, realizing that the pump would only turn on when it sensed a drop in water pressure, and the water pressure was dropping between the foot valve and the pump. Solution? Put a check valve in the house, and change where the pump registers water pressure by means of relocating the switch. In a typical water well and jet pump system, the pump would need to be primed, but since my well was artesian, there was always pressure at the pump to "self prime" the lines. What was once a major hindrance, was now my biggest ally in making the system work. All in all, for a couple days of thought, and under $100 dollars in fittings, I was able to repair the water well system without the major financial setback.
The biggest piece of advice here is to be unconventional, think critically and be different. Always look to see who benefits from what contracting you need done, and always follow the money. I don't think contractors in this case were out to get us. They saw a young couple with their first home and I felt they were genuinely honest, but they also weren't looking to buck the trend and get creative either. Home ownership requires a degree of intelligence, and if you show weakness here, there is a good chance somebody will take advantage of that. Do your homework, ask your friends if they have a referral, read up on the problem before you call someone in, and face it head on. It's leverage, and it can work against you if you don't protect yourself.
Written By Ryan Carr
R.W. Carr Investment Co.