Thursday, March 31, 2011

February Apartment Financials

Before I get into the latest financials for the apartment, let me say the Chez Cliff blog has shut down. Cliff started out blogging about REI and, after being laid off, moved into a consultant role and steered his blog in that direction (very similar to what Kenric has done.) Cliff's last post mentioned that he didn't want to be posting on his blog just to post. I can understand that. It's easy to fall into the trap of feeling like you have to post something every week or every X days. I've felt that way too, but my desire to post informative items tends to outweigh that desire, so I can resist that urge, it seems. (Case in point: I noticed I didn't post at all last month.) A while ago, I wrote a post musing about where all the old bloggers that I used to follow went. Many have given up on their blog and / or (presumably) moved on from REI. I'm sorry to add Cliff to that list. But it's pretty clear that he's not abandoning what he was doing. In fact, it's obvious he is enjoying his new consulting business. He just got tired of blogging. It's sad to lose another blogger that I regularly followed, but I understand Cliff's reasons and I wish him the best. (P.S. I'd link to his old blog, but he seems to have taken it down. That's a decision I personally disagree with. Even if I didn't want to blog anymore, I'd still leave the blog up - simply because I think it's got a lot of useful information that people might learn from, even if no new content was being added.)

On to the latest apartment news.

The February numbers are in and the financials continue to improve. February showed a $2,600 increase in revenue from January and more than a $7,000 improvement over December. This is not quite as big a jump as management expected (last month they said they expected a $5,000 revenue increase), but it's still nothing to sneeze at. This month, managment says they are expecting a $2,000 increase in March.

Occupancy inched up another percentage point to 94% while rent concessions dropped by about 10%. Marketing and retention costs also dropped by almost 20%. Perhaps this is a sign the economy in Texas is improving. We received almost $50,000 back from the escrow impound account after the yearly escrow analysis. This is a one-time gain and the money was used to pay off some old bills that were not paid during the leaner months of last year. Overall, for the first two months of the year, we are running about $40,000 ahead of our budgeted income. Granted, that large chunk of change from the escrow impound refund helped us, but moving foward, I think we'll be in better shape. As mentioned last month, our March loan payment will be about $8,000 a month less due to our property tax valuation appeal from last year. That will definitely improve the bottom line. I'm crossing my fingers, but it looks like we might have turned the corner here.

In other news, I have completed the rollover of my Roth 401(k) into my self-directed Roth IRA. As soon as my partner finds a new hard money loan, I'll put those funds into action.


Clifford said...

Shaun, thanks for the note. When I fire up my new blog, I'll let you know!

I think if I had done chezcliff on a free blogging platform, like blogger, I would have kept it up. But I was getting charged each month and making zero revenue. I'll check into creating a freebee account on blogger and uploading my entries there.

Shaun said...

Cool. Didn't know you were planning another blog.

I've got another blog on a different topic and I use GoDaddy. It was $80 for the first year for the domain name and web hosting using WordPress. Renewals are a bit more at $90, but you can get discounts if pay for more than 1 year at a time.

I bet if you made your new blog a part of a larger website that was for your consulting business, you could write off the cost of the website. Or keep them separate, but buy a different domain name at a reduced cost (since you'd already be buying one for your business) and save that way.

Or just go to Blogger :-)

MJB said...

How long have you been in this apartment investment now? Have you received any dividends yet? How would you say this investment is performing? It seems to be a losing proposition so far, but it is difficult to track...

Shaun said...

I got into it in Jan 2008. I did receive several dividend payments before the economy tanked. But I should note that, while quarterly checks are nice, the real income from this investment has always been planned to be when it is sold. The plan was to hold for at least five years, then look at seeing what kind of return we could get for selling. We've got a guaranteed return of around 9% on the investment, but we're shooting for an annualized ROI of around 13%. Our original numbers can be found at But things are definitely turning around. Had another good month in March. I just haven't had time to write something up yet. Stay tuned.

Shaun said...

Ha.. I did it on the original post I quoted and did it again here.. We are shooting for an annualized ROI after selling of 30%-35%.

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