This is pretty awesome, especially some of the stats. The value of a solid gold toilet over time? Something I never thought I wanted to know but now I’m glad I do!
Click HERE to view.
I just read this book Shark Tales by Barbara Corcoran. She was a real estate mogul in New York City in the 80s and 90s and sold her company for tens of millions of dollars. She’s now on the ABC show Shark Tank and is investing in other people’s businesses.
You have to love Barbara. She’s brash, honest, simple in her approach and is also utterly charming. I’m not sure if the techniques that worked so well for her brokerage 20 years ago would work the same way today, but maybe that’s just me making things more complicated than they are.
I’d love to get an interview with Barbara. The people who get on Shark Tank generally seem to take for granted that they are standing in front of 5 people who could change their life forever. Believe me, if I ever got face time with Barbara I’d come out of it with the knowledge to make millions. So, Ms. Corcoran, if you’re listening, please drop me a line. I’ll meet you anytime, anywhere.
Great. I’ve basically been in freak-out mode since Monday morning. There was an online auction for properties. I told Dad there was a property I was interested in but that it was going to be too expensive for us. I watched anyway. And guess what…I bid. And guess what…I got the property. For $72000 plus the buyer’s fee of $3600. I really didn’t think no one would out-bid me. I really didn’t. I only clicked the stupid button once.
Here’s a pic of the house:
So now I was stuck. I would have to cough up the down payment of $3700 and walk away, or try to figure out a way to buy the damn thing. Since I only have 40k in cash right now for property I would have to borrow the rest. The house is a good deal, not a screaming deal but a good one. Here’s the numbers:
Comps in immediate neighborhood
Last sale 126k (with basement mine is on a slab with slightly larger square footage)
Current pending contract in subdivision 115k under contract in one day
Mine needs about 10k in paint, carpet and appliances to look great. So:
The problem was I didn’t discuss this with Dad before I did it. I felt horrible. I’ll admit it I peed in my pants a little when the auctioneer said my number won. Dad was upset, but said he trusts me. This is my business. I know I can do it and make a profit, I just shouldn’t have done it this way. I’ve learned my lesson and will never, never do anything like this again.
Also, flipping was never in my plan. I just want to buy properties under 50k and rent them long term.
In the end a real estate agent friend of mine agreed to go in on it with me 50/50. We’ll both put in half the cash and split the profit when it sells. Personally I can’t wait for the day.
Someone clicked on my blog by using the search term “tennant fix up property for lower rent”. Yes, they spelled tenant incorrectly, but it made me ponder their question (which I hadn’t previously considered).
The answer I would give is unequivocally NO. Not only is it difficult to monitor their work, but if there is any disagreement now that person is LIVING in your house. Heck, if they got really pissed they might not pay at all then you’d have to evict them. Not only that, but if they got hurt doing repairs you might be liable, adding yet another crappy layer to an already crappy situation.
Just pay someone licensed a fair price. Your tenant should have 2 roles, one is to not destroy your property and the other is to pay a fair amount for rent every month. Don’t let your relationship get to be any more than that or you can prepare to deal with the consequences.
That’s what Dad asked me this morning when I said that I thought I might want to increase the number of days B’s in daycare. Currently she goes MWF from 8 to 3:30. As she’s gotten older it’s become increasingly difficult to work on TTh when she’s here. She requires a ton of attention, which I love giving her, but there is no way for me to get good solid work done.
Currently we pay $570 per month for daycare. It would increase to about $1000 if we were to put her in 5 days per week, assuming they could even accommodate her. I told Dad I could easily make more than that with the extra time I spend working. I was more justifying the extra cost by saying I could make up for it, but it does sound a little like trading quality time for money. Isn’t this what every parent does who sticks their kid in daycare?
Dad didn’t seem to be super against it, but I think he’s sad that I feel such a strong need to get ahead quickly. I keep telling myself we’re sacrificing now for later gain, but when does it end? Am I really going to be OK when I have 10 rentals? Or will I need 20? And when I get there will it still not be enough?
Numbers as of 11/01/2011
Total Cash $25,000.00
Total Real Estate $270,000.00 (140k Primary Residence, 60k Rental 1, 70k Rental 2)
Total Retirement $11,300.00 (Vanguard Roth IRA)
Total Mortgages $177,000.00 (Primary Residence, upside down)
Total Other Debt $15,700.00 (Student Loan)
Total Equity $113,600.00