So, Your Property has a Sinkhole?
By Nelya Calev, author of Real Estate Investing: Nothing Held Back
Some time ago, my tenants were peacefully going about their business on a fairly ordinary day, when the ground opened up and a sinkhole emerged in our parking lot.
Now, there’s a lot of information out there on how to determine which buildings to buy, how much to pay, and how to finance them. There’s also a good deal of material on selecting tenants, showing units, and dealing with the ordinary travails of investment real estate. However, there’s precious little on sinkholes.
The thing anyone needs to realize when getting into this field is that you’re the one who makes the final decisions. Sure, it’s a wise idea to setup a property manager for the routine stuff, but don’t think that allows you to retire to a Greek island and become a subject matter expert in ouzo. Ultimately, when something needs to be figured out, that’s going to fall on you.
Now, it just happened that I didn’t know a single thing about sinkholes, so guess what I did? Well, the first thing is I used common sense. I had my property manager build a barricade around the hole with safety tape. That held off a lawsuit for a bit.
Next, I called the city and asked them to send their engineers. Amid thoughts of my entire building collapsing into oblivion, I knew the city would have the engineers who could tell me how bad this was. Even though the hole was entirely within my property, it’s in their best interest to know whether neighborhood blocks are about to be twenty feet lower.
While the city won’t fill a sinkhole for you, they’ll at least tell you whether it can be filled or whether further investigation is required. That should be a relief, since it’s not necessary for you to be a soil engineer. You should always seek experts before attempting to make assumptions yourself.
In our case, the city gave us permission to fill it in. The next tricky part was how? Some research told me what not to do: fill it with gravel. It turns out that, like a lot of things, filling a sinkhole requires some expertise. After some more searching, I found a company in the area that dealt with sinkholes, since they are relatively common there. While I could have just passed the number to our property manager, I instead called the company myself, told them a bit about the project, and then had my property manager arrange a site visit. When it comes down to important details like this, I wanted to ensure that things are done properly.
Some of you may be a bit disappointed that I haven’t gone into the gory details of exactly how to deal with a sinkhole. How precisely should it be filled? What types of material may you use?
The truth is we can’t become subject matter experts in everything. At some point you need to trust the people who do this all the time. In fact, trying to be the expert at the table can get you in more trouble than before, because you aren’t the expert at the table. Managing real estate is like managing any other company. Bring in people you can trust and let them do their jobs.
In my book, Real Estate Investing: Nothing Held Back I discuss sinkholes and a number of other problems that we’ve muscled through. I also cover the general attitude you need to have, because real estate is far more about thinking on your feet than it is about numbers.
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