Blog Post

Rehabs and Rentals: 91st Terrace

PROPERTY NARRATIVE

This property was just a total BEEATCH since inception. I would seriously like to walk up to this house and BEEATCH slap it big time. (I really just kind of realized how inappropriate that very common colloquialism is)

Within four months, the initial tenant that was placed there abandoned the property and left a ridiculous mess. It was like they were inviting people to come and drop their trash off at the house. Big make ready expense and lost rents.

Then it was fine for two years…and I was feeling better. That tenant left and not only did I endure another expensive make ready, but also 5 months of vacancy (yeah go ahead…tell me how f’ing ridiculous that is…sure…why not).

The cut to the next blunder…

I was approach by the (new) property manager, who also happened to be a turn key provider (I actually bought 92nd St from them which was a big win). They ask me if I was interested in selling any property.

I actually had been thinking about it, but only if I could sell Belmont and 91st at the same time and 1030 the combined proceeds into a property close to me (this would be hard to do with retail sales because of the timing requirements). Now if I couldn’t sell both I would have waited and sold Belmont retail after the lease was up and made much more money.

Anyway, they say they can do it, and actually get both under contract in a couple weeks…great! Cut to 60 days down the road, and only Belmont crosses the finish line, with a last minute bail on 91st. By that time I am past all contingencies on the property in FL, and can’t back out.

So I end up being forced to sell Belmont at a very low price, and basically did a nearly useless exchange. Plus I have to pony up another 35K to cover the missing funds on the FL purchase. The whole thing was bust. Man I was pissed. I seriously thought I had been hustled into selling Belmont cheap, to tell you the truth.

The one silver lining is that they (finally) 91st rented, on a 2 year lease, at a 26% rent increase. This increase in rent actually allowed me to sell 91st at a higher price to another investor to just get this cursed house off my hands. (Being I live in FL now, I really wanted to move some equity down here where I can mange the properties)

I learned a few lessons on this one. Even with all that I still made a 5.77% CAGR on the cash invested. Could have been worse I suppose.

(This property has been sold)

Related Posts