Wednesday, July 25, 2007

Summertime Slowness

Nothing much seems to happen in the summer. Here in Arizona, it's just too hot to go outside and do anything and with vacations and family visits, it seems like real estate has taken a back burner for a moment.

My Louisiana investment has finally been brought current. Actually, more than current since I've already received the payment for August. That brings the mortgages up to date. The other aspect of this investment - buying out the old majority owner and possibly getting an equity share of this and several other properties - is still in process. I think escrow is supposed to close by the end of the month, but with a deal this big, I wouldn't be surprised if it took longer. No more details yet either, so I am not entirely sure how good of an investment this may be and if I'll want to stay in it or cash my money out and move to something else.

My tenants in Rental #1 still have yet to pay their $200 from May that they were mistakely undercharged by my management company. The tenants told the management company last Tuesday that they wouldn't have that money until August. If they have not paid everything by August 10, I've instructed the management company to evict them. Their lease is up on November 1 and I am 95% sure I will not be renewing their lease. It might cost more to evict them now than to simply keep dealing with their issues until their lease expires, but I would rather be trying to rent the place in August and September than in November and December.

The investors I was rehabbing and flipping properties for are evaluating their options right now. I think all the media coverage about the housing meltdown has got them a bit worried about flipping and they aren't sure if they want to keep doing that. They are looking into getting a rental property, perhaps something in the Payson area that they can rent out part time and possibly use for themselves other times, or perhaps just a straight rental somewhere in the metro Phoenix area.

Personally, I'm saving up my funds for my next REI purchase, which will definitely be a multi-unit property. I'm not saving as much as I'd like, mainly because I've been hit with a rash of big expenses lately (well, that plus a losing vacation to Las Vegas!), so I'm not sure when I'll be ready to pull that trigger. Just a few months, hopefully.


Doug O said...

Shaun, something occurred to me - if you're looking for someone who is pretty well tuned into the Phoenix/Scottsdale market, I can put you in touch with someone I was looking to partner with on a deal in Houston... He has interests in a lot of larger multifamily properties around you (I think he has ownership interests in around 400 units)... That might be helpful if you are looking to go up to larger properties... He's a good guy, and quite knowledgeable...

Shaun said...

This guy's first name wouldn't happen to be Steve, would it? Thanks for the offer. I'll wait a bit though. I don't have funds right now to do anything, but when I do, I will definitely take you up on this offer!

Doug O said...

Yes, that is exactly who I am referring to... I met up with him in Houston while searching for properties there... He's got a lot going on in Phoenix, and if you were looking to get involved, I'm fairly certain he'd be good to speak with..

Shaun said...

I've met Steve O. a couple of times. He was at the forum member's get together last year. I also had coffee with him and Kenric and Glenn, another Phoenix area real estate investor some time ago. Steve recommended a couple of books on apartment buying that I picked up. Funny, but for some reason I was under the impression he was no longer looking to buy more units. Maybe that was just in the Phoenix area... And it was over a year ago..

But anyway, when I said my next purchase was going to be a multi-unit, I was thinking more along the lines of a fourplex. But if the Louisiana thing pans out, in a couple of years, I should have enough for a decent downpayment on an apartment building.

Doug O said...

Haha, you've always got to be thinking bigger!!! :)
I'm still bummed that we missed out on the one property we really liked down in Houston... Would have been a real nice one - 192 units, with very little deferred maintenance... Strong cashflow... Those are the kind you've got to move quickly on, as it was already under contract by the time our offer was submitted (which was only about a week and a half after we visited it)...
Oh well! That's a problem I have often, I tend to be very conservative in my analysis... And that takes time before I come to a comfortable conclusion, by which time the property might be gone! It's a constant learning process..

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