Wow, I can't believe it's been a year since the last post. So let's see what has happened. Two major things that have happened is that I sold both Prince and Grand ave, the one where the partner didn't pay the fuckin prop taxes. owed $119,000. So we got an offer for around $1.2 million for the property and the taxes were covered and I got some money back, so over all I broke even, except that I have to pay taxes on money I used to keep the property alive 5 years ago, and now I get that money back except that I have to pay capitol gains on it. Money I already had. But the great thing is that person is out of my life, the stress I had dealing with them and my name being on the loan was too much. So I am thankful that is over.
Prince was a mess, I had to fix up so much, and then I got an offer for $795,000 but they subtracted money for the wall work the pest report claimed that all the wood under the stucco on the outside wall needed to be replaced. I disagree. but I was losing $20,000/yr on that property so I had to get rid of it, lightning struck and it slingshot out from underwater and went to nearly $800,000. So I pulled the trigger and sold it. Paid off the mother-in-law and got them out of my life forever. ex mother in law. I no longer owe anyone any money. So I am 9 units down from last year. and I have some money in the bank, although I have property taxes in Dec and Feb, also this year I will have capitol gains tax, so I may end up even by April.
Overall, there have been some issues, but for the most part this last year was the steadiest year I've had since being in properties. I have taken 20 years to learn how to get good folks in that want to stay and take care of the place, see it is better to have good people paying less than market and keep them in for 5 years paying. look at it this way, if I charge $1500 and I get it for 5 years that is a clean $90,000.
Let's compare that to getting the most rent but have problems and have to remodel every year or more.
say $1650/mo that's $19,800/yr but wait I had to kick them out and remodel which costs an avg of $4000. So I ended up getting $15,800 that year, but wait, it took me another 2 months to remodel and another month to get it re-rented, so I did not receive any rent for 3 months, so that is $4950 more, brings us to a cost of $8950 which gives us $10,850 for that year. and if I end up doing that every year, that comes to $54,250 for that same 5 year period. That is a loss of $35,750. Not to mention all the time I waste being at the property remodeling, shit don't get done by itself!!
I have many really good tenants now, I don't really have any bad tenants. I have one or two that irritate the shit out of me but they do pay. I don't have anyone that doesn't pay. I have my longest tenant now struggling, I have saved her before, but I am not going to save her anymore. She is now kicking her son out, he is 19 now. And she has a boyfriend who is basically a drifter that says he's a handyman, but he doesn't make any money and he has all his shit over at the house now. I am not happy. Sucks because this is someone I knew and took care of for basically 16 years. And now she avoids contact with me and I am the bad guy. Landlords should not make friends with tenants. At some point they will struggle and since you are friends they will expect you to be soft with them, then when you aren't the first thing they drop is the friendship and then they turn and start telling you all they shit they've done for you. and that you are an asshole and careless, heartless. Get used to this, it's part of the gig. Don't make friends. They are just tenants. When they are bad you have to get rid of them, period. When they start making excuses that is a red flag that will be manifested in problems paying rent, and will be the next eviction. It is inevitable. Don't fight it, let it happen embrace the asshole lifestyle, OR lose lots of money. Money or friends, you decide.
So my properties are coming back nicely. Before the recession I had about $4 million in equity and I owed about 5 million in loans. Now I owe about $2.5 million and have about $1.8 million in equity. I am keeping track of this growth here http://www.simison.com/props/prop-values.html So things are growing.
The new challenge is to decide what to do with the ex, she is now wanting 50% when before in the recession she just wanted the main house because that was the only house with any equity. All the rest were under water. they were worth a negative $800k. yeah so no brainer, now they are coming back she is claiming we never made a deal during the recession. She says they are her properties. Little does she know lawyers told me she would be lucky to get 20% and that they would gladly represent me. So I am considering taking her to the cleaners if she doesn't stop yelling at about what she's entitled to. the part you don't see is that the whole marriage I never asked for any of her money, and she worked fulltime as a high school teacher and kept $80-100,000 per year to herself. I paid for everything, housing, cars, taxes, car registration, kids sports, kids daycare, on and on. She always got mad at me when I had to go and fix property stuff and she would say "why don't you get rid of those stupid properties" And there was a time during the recession when I would tell her things were bac and she would just say "well, this is your thing not mine" totally disconnected from reality. If I am paying for everything and the properties go downhill, then it's going to directly affect her. She is still doing this, I had the loans go up $3000/mo that's $36,000 more gone every year, she didn't bat an eye still sends bills to me like it has nothing to do with her. insane.
So as a partner, she doesn't contribute any money, (we had separate bank accounts because she spent all my money when we made a joint account), doesn't work on any of the properties, never even visited them, and bitches at me about needing to spend time and money on them. And now wants 50%. She should be asking what she can do for me to allow me to spend more time on them to make more money and make our lives even better, but that is not what happened. When the recession hit she just blamed me and accused me of stealing from her. and then wanted a divorce at a time when we had no money and things were so bad, forced me out to spend even more money, putting us in an even tighter situation. and she buys a new car, sending us in deeper debt. Not rational thinking at all. all these events puts us in further jeopardy financially.
anyways, stay tuned .....
