Monday, October 03, 2011

Latest Update

Got a request from an escrow company for a payoff amount on hard money loan #17, so that should be closing soon. Another short loan - just 5 months.

Got an update on the Houston apartment complex a couple of weeks ago for the month of August. It wasn't a good month. Our occupancy stayed stable at 93%, but expenses were up. The main culprits were higher utility bills during the summer - water and electricity are running about $10,000 more per month than they cost in the winter months. The good news here is that those bills should start declining. Management has said the September bills are running about $7,000 lower than August.

Another expense was an "extraordinarily high" number of counter top resurfaces for the 22 units that were turned over. Not sure if these were just really destructive tenants or if these units were just getting to the point where this needed to be done after several tenants had lived there. And, as mentioned previously, our loan payment has switched from interest only to principle and interest, so our mortgage went up. All these factors combined to create a negative $18,000 cash flow for the month - the largest monthly lost so far this year. And for the year to date, the property has a $10,000 loss. Unemployment in Houston is creeping up again and management is warning that we may start seeing higher turnover as tenants move out due to lost jobs.

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