I'm leaving for my two week cruise this weekend, so I'm spending the remaining time packing and getting ready. No posts for a couple weeks and, since comments are moderated, any comments probably won't show up until I get back either. Bon voyage!
Monday, May 12, 2008
Friday, May 09, 2008
I've been remiss in posting the details of what's been going on with my real estate investments, so here's a catch-up post.
I've decided to sell Rental #1, since it seems no one wants to rent it and it's in a bad part of town. My new PM company figures it needs about $1,500 worth of work to get it ready to sell. The new company is set up to accept payments over the internet using PaymentServiceNetwork.com. That service really seems to be geared more towards tenants paying rent than owners getting funds to managers, but I was willing to give it a shot. Unfortunately, the managers need to set up the people who they accept payments from before you can make a payment and they have not set me up yet. Since I wanted to get the repairs going as soon as possible on the property, I just mailed the PMs a cashier's check for $3,000. That should be enough to cover the repair costs and the $100 a month management fee they are charging me.
I've signed a management agreement but have yet to sign a listing agreement. The PM company has requested the last two appraisals I had on the property to assist them in setting the price. I will almost surely have to sell this property at a loss and it will most likely be to another investor. The neighborhood is 63% absentee owner. 80% of the rentals have rents under $499. Given that I had the place rented at $750, I do have some doubts about the validity of this data, however.
My first multi-unit investment is once again on track to close at the end of this month. After missing a couple of earlier escrow closing dates because they didn't have enough money raised, the prinicples finally have all the funds needed. Our loan interest rate has been locked in at 6.15%, which is higher than the 6% the original proposal used. During the extended escrow period, we have been getting copies of the financial statements each month to monitor the performance and the property is showing gains. The principles feel the pro forma goals can still be met, even with the slightly higher interest rate.
And finally, the last week of this month and the first week of next month, I will be out of the country on a two week European cruise! Woo-hoo!
Thursday, May 08, 2008
Bryan Properties, the property management company that I fired last month, is still causing me problems. I checked my P.O. Box today and found they had forwarded a bill to me from the City Of Tulsa - the electric bill. The due date on the bill is April 21, so it is now overdue. Let's look at the timeline:
The bill was printed on March 28. I fired Bryan Properties on April 4. That's just one week after the bill was printed. OK, it's possible they didn't get the bill before I fired them. So when did they forward the bill to me? The postmark on their letter is May 1. They sat on the bill for a full month. To make matters worse, they had a $250 maintenance deposit from me. I just received that refund today as well and the date on the refund check is April 28. So they could have paid the bill using my own money, but they didn't even do that.
On the other hand, if they had been receiving monthly electric bills the whole time the property was empty, they were paying them with their own money. The bill was only about $20, but the place was empty for over 5 months, so that's over a hundred dollars they did not charge me. I got my full deposit back. So I get hit with a 1% late fee, which amounts to about 20 cents and I saved over $100. Sometimes their ineptitude works in my favor. This is all assuming they were being billed, that is.
Friday, May 02, 2008
I've been trading email all day with the property management company I was going to hire. Basically, after speaking to some other PM companies and getting more details from this PM, I've decided to just sell the property. I asked the company that turned me down for managing it yesterday if they would be willing to list the property for sale. Here is their response:
I am sorry . We would not be interested in listing this property. It needs to managed and the management company would need to have about $1500 to maintain the yard and the property. I think it is going to need constant maintenance while it is for sale. It has been spray painted with graffiti the weeds are very high the utilities are cut off and the place needs to be cleaned. The back sill plate under the porch on the NW corner is rotted and disintegrated which will cause the porch to fall and some structural damage. We have people that provide these services for us but we would require a monthly management fee of $100 plus the operational funds necessary to maintain this property without getting citations for code violations. Without the management fee and operational funds I believe that it is more than we care to handle.
So I've agreed to sign on with them and pay $100 a month, rented or not, plus the costs of repairs that are needed to get the place in salable shape. But what really gets me mad is the fact that the old management company allowed the property to get into this shape in the first place. They obviously never visited the place in the five or six months they were supposedly trying to rent it. Yet another reason to avoid Bryan Properties.
Oh yeah...and I'll probably have to sell this property for less than I paid for it. So it's been an expensive education. More details on that when this is all over. But, the bright spot of all this is that I am now in a position where problems can be solved by just throwing money at them. Not the best spot to be in, but it is much better than being in limbo with no management company, no tenants, and no idea what is going on out there. After all, money is a renewable resource.
Thursday, May 01, 2008
After two weeks not returning my calls, I received email from the property management company I was going to hire saying they cannot manage my property after all. This after they already drove by the house and the woman spent 30 minutes on the phone with me telling me how she was going to market it. Furthermore, the email was from someone I have never spoken to and whose name I did not recognize. The email did not have the name of their company either, so I only knew it was them by calling again.
I'm calling other management companies now, but if I can't find one soon, the place will be going up for sale.