Property X
Apt 1- Black Family: $700
Apt 2 – Consuela: $600
Total Rents Received: $1,300
Property Expenses: $120 (Alfonso Maintenance Fee)
Total Profit for Anita: $1,180 (used with other monies to pay school taxes) [2017: $720]
Anita decided to let the city do the sidewalk job and put it on the taxes, and that was fine with me. Having Al do the job would create more issues between she and I, and I don't need the drama. Other than that, not much happened at Property X in June. It’s months like this that make me question why Alfonso gets $120, but then I remember how poor a job I did at managing this property for years. Ever since he took over, it’s been making consistent profit every month. So the $120 is worth it.
Property 1
Apt 1 – Dharma and Family: $525
Apt 2 - Belle and Sebastian: $875
Total Rents Received: $1,400
Mortgage: $840
National Grid: $140.26 [2017: $144.58]
Property Expenses: $5.37 (Bug killer)
Total Profit: $414.37 [2017: $422.42]
I’m counting the days until I raise the rents at Apt 1 for the Nepalis. I could do it anytime I want but with so much going on, I’d rather not risk having yet another empty apartment.
Property 2
Apt 1 - Nicholas 2: $265 (moved out)
Apt 2 - Edward and Gabby: $750
Total Rents Received: $1,015
Mortgage: $754
Property Expenses: $198.72 (Nicholas eviction filing fee, faucet, door locks)
Total Profit: $62.28 [2017: $392.19]
Nicholas didn’t pay rent so I filed eviction on the 10th. Two days later he got in touch with me and explained his situation. His job training for corrections security has him moving to Ossing, NY, which meant he had to leave without giving proper notice. So I made up a penalty of $150 for early lease termination (even though he was month to month), $85 for the eviction filing fee, and then $30 for the broken faucet. The $265 total was deducted from what he owed and he was free to go, with no need for a security deposit return. He left the place in excellent condition, so a paint job and some minor fixes should get the place rented out fairly quickly in July. It’s kinda funny though. With the issues that Edward had paying rent in May, I seriously thought he’d have a problem in June but he was fine.
Property 3
Apt 1 – VACANT
Apt 2 – Emily: $0 (Paid when she moved in)
Apt 3 – Rory: $600
Apt 4 – Josh: $0 (Paid when he moved in)
Total Rents Received: $600
Mortgage: $882
Property Expenses: $6,918.78 (Full renovation of Apt 1, including $2,500 for labor)
National Grid: $183.70 [2017: $241.95]
Total Profit: -$7,384.48 [2017: $300.45]
So the big expense was renovating Chucky’s old apartment. After living in that apartment for 44 years, I knew it was going to be very expensive to update it. And with the problems I had getting Alfonso to renovate Apt #2 last year, I knew I wanted someone else to do it. I found a Jamaican guy named Handyman Gary who I hired to do the work. He actually did a decent job, but I messed up by not having the specifics for the job written down. So he got confused as to what he was supposed to do and I had no paperwork to back things up. What was supposed to be a $2,200 charge in labor turned out to be $2,500. By the end, he seemed annoyed and just wanted to get the hell out of there. Whenever I asked him prices for simple jobs he would give me astronomically high prices, so I think I ruined yet another good handyman. But in the end, he did a good job:
With all the work done, I was sure I’d get $700 for the apartment. But for the entire month of June, I only received one phone call for the place… and it was a welfare bum no less. I’ll give it some more time but, if I can’t find anyone at that price, I’ll have to drop it to $650.
Property 4
Tenant Latisha: $900
Mortgage: $0 (won't start until July)
Property Expenses: $665.04
Total Profit: $234.96 [2017: $900]
I didn’t expect anything to happen here, but I’m glad it did. On June 1st, Latisha called me to say that the hot water wasn’t as hot as it used to be, so I went over and turned up the heat on the water heater. Three weeks later, she calls me early in the morning to say that the basement was flooded and there’s no hot water at all.
So Al and I went to buy a new water heater to install. I was annoyed at having to deal with this expense, but Al quickly reminded me that I was able to get two and a half years of use from that rusty ass water heater and I should be grateful. And he was right. Anyway, he pumped out the water and installed the new water heater. Unfortunately we had to go to Home Depot, which meant the water heater has the dreaded Honeywell pilot assembly. I’m guessing I’ll have some kind of problem with it next year, so we’ll see.
Property 5
Apt 1 – Ras: $550
Apt 2 – Rich: $400
Apt 3 – Destiny: $525
Apt 4 – Tom: $500
Total Rents Received: $1,975
Mortgage: $0 (won’t start until July)
Property Expenses: $0
Total Profit: $1,975
After the tenants paid rent, I let most of the tenants know that “the owner” wants everyone out to renovate the apartments. Rich is the only one I’m keeping, and he agreed to start paying $500 a month starting in September. While most took it reasonably, Tom really played that violin with statements like:
“I’ve lived here for 18 years! Where am I gonna find a decent place for $500?”
“There’s more to life than just money.”
“Can’t the owner see that we’re all happy here and paid the rent on time? And we take care of the place. Why is the owner so mean?”
As much as I wanted to tell him to shut the fuck up, Tom has a special situation. While the other tenants are month to month, Tom still has a lease that doesn’t end until January of 2019. Technically, he can simply tell me that he isn’t leaving and, as long as he pays his rent, I can’t do shit to him. Since he believes that his lease was with the previous owner and not me, I’d like to keep him in as non-litigious a mood as possible… which means being understanding and nice about the whole situation. So I gave the tenants until the end of August to get out, which gives me some breathing room to get these credit card balances down before the large scale renovations begin.
Lawnmowing Services: $220 [2017: $130]
Net Real Estate Profit for June 2018: -$4,917.39 [2017: $1,885.06]
Let the losses begin! I knew that June was gonna be the first of several negative months as I ramp up renovations, but Property 3's vacant apartment cost about $1,000 more than it should have. That was because I wanted better quality cabinets and supplies so that I could get it rented for $50 more. So it was quite the shock when I put it up for rent and virtually no one applied. Whether the bet will pay off or not solely depends on getting someone good to take that place in July.
Just two weeks before the mortgage was to kick in, my insurance agent tells me that my carrier is dropping coverage for Property #5, and that no other insurer is willing to insure it. The main issue seems to be the Federal Pacific electric panels. Evidently they are prone to fire, and no insurance company will take on a property with those panels installed. I was hoping to use my old electrician Floyd, but he seems to be out of commission. So I'll have to get another electrician, and I'm sure the price is gonna be a pain in the ass.
I honestly didn't see this coming. Then again, that's probably because I didn't get an inspection done when buying the place. I knew getting an inspection would cost money and the seller would choose the buyer who wanted the least inspected, so I hoped that having Alfonso there would be enough. But even he didn't know about the dangers of Federal Pacific panels. Anyway, I have to get them all replaced and make other minor fixes to get the place insurable. So even though I made money off Property #5 in June, it's very likely that this place won't yield another profitable month until November. From July until the end of the year, everything is gonna be about Property 5. I have to get Ras, Tom, and Destiny out of those apartments, fix them up, rent them out, and do all this while building the attic apartment. It's gonna be a wild ride, but I'm not daunted. In fact, I'm very much looking forward to it.
There's a very small possibility that I could make profit in July, but that all depends on how much it's gonna cost to replace Property #5's electric panels as well as whether I can get Property 3 and Property 2 fully rented out.
Apt 1- Black Family: $700
Apt 2 – Consuela: $600
Total Rents Received: $1,300
Property Expenses: $120 (Alfonso Maintenance Fee)
Total Profit for Anita: $1,180 (used with other monies to pay school taxes) [2017: $720]
Anita decided to let the city do the sidewalk job and put it on the taxes, and that was fine with me. Having Al do the job would create more issues between she and I, and I don't need the drama. Other than that, not much happened at Property X in June. It’s months like this that make me question why Alfonso gets $120, but then I remember how poor a job I did at managing this property for years. Ever since he took over, it’s been making consistent profit every month. So the $120 is worth it.
Property 1
Apt 1 – Dharma and Family: $525
Apt 2 - Belle and Sebastian: $875
Total Rents Received: $1,400
Mortgage: $840
National Grid: $140.26 [2017: $144.58]
Property Expenses: $5.37 (Bug killer)
Total Profit: $414.37 [2017: $422.42]
I’m counting the days until I raise the rents at Apt 1 for the Nepalis. I could do it anytime I want but with so much going on, I’d rather not risk having yet another empty apartment.
Property 2
Apt 1 - Nicholas 2: $265 (moved out)
Apt 2 - Edward and Gabby: $750
Total Rents Received: $1,015
Mortgage: $754
Property Expenses: $198.72 (Nicholas eviction filing fee, faucet, door locks)
Total Profit: $62.28 [2017: $392.19]
Nicholas didn’t pay rent so I filed eviction on the 10th. Two days later he got in touch with me and explained his situation. His job training for corrections security has him moving to Ossing, NY, which meant he had to leave without giving proper notice. So I made up a penalty of $150 for early lease termination (even though he was month to month), $85 for the eviction filing fee, and then $30 for the broken faucet. The $265 total was deducted from what he owed and he was free to go, with no need for a security deposit return. He left the place in excellent condition, so a paint job and some minor fixes should get the place rented out fairly quickly in July. It’s kinda funny though. With the issues that Edward had paying rent in May, I seriously thought he’d have a problem in June but he was fine.
Property 3
Apt 1 – VACANT
Apt 2 – Emily: $0 (Paid when she moved in)
Apt 3 – Rory: $600
Apt 4 – Josh: $0 (Paid when he moved in)
Total Rents Received: $600
Mortgage: $882
Property Expenses: $6,918.78 (Full renovation of Apt 1, including $2,500 for labor)
National Grid: $183.70 [2017: $241.95]
Total Profit: -$7,384.48 [2017: $300.45]
So the big expense was renovating Chucky’s old apartment. After living in that apartment for 44 years, I knew it was going to be very expensive to update it. And with the problems I had getting Alfonso to renovate Apt #2 last year, I knew I wanted someone else to do it. I found a Jamaican guy named Handyman Gary who I hired to do the work. He actually did a decent job, but I messed up by not having the specifics for the job written down. So he got confused as to what he was supposed to do and I had no paperwork to back things up. What was supposed to be a $2,200 charge in labor turned out to be $2,500. By the end, he seemed annoyed and just wanted to get the hell out of there. Whenever I asked him prices for simple jobs he would give me astronomically high prices, so I think I ruined yet another good handyman. But in the end, he did a good job:
 |
| Because I had nothing written down, he didn't know that he was supposed to paint the entire bathroom. Still, the new bathtub setup and new sink makes the room look better. |
 |
| Vinyl flooring is king. Easy to install, waterproof, and lasts a hell of a long time. Definitely using this type of flooring for the floors that need a new look for cheap. |
 |
| Bedroom. Good vinyl flooring again, and nothing else was done except painting the trim. |
 |
| By far the most expensive work done was in the kitchen. The sink (and therefore the basement plumbing) had to be moved from one side to another. Also spent extra money on better quality cabinets. |
With all the work done, I was sure I’d get $700 for the apartment. But for the entire month of June, I only received one phone call for the place… and it was a welfare bum no less. I’ll give it some more time but, if I can’t find anyone at that price, I’ll have to drop it to $650.
Property 4
Tenant Latisha: $900
Mortgage: $0 (won't start until July)
Property Expenses: $665.04
Total Profit: $234.96 [2017: $900]
I didn’t expect anything to happen here, but I’m glad it did. On June 1st, Latisha called me to say that the hot water wasn’t as hot as it used to be, so I went over and turned up the heat on the water heater. Three weeks later, she calls me early in the morning to say that the basement was flooded and there’s no hot water at all.
 |
| All that was missing was a raft. The old water heater couldn't handle the pressure put on by me turning up the heat, so a corroded connection gave way and BOOM! It took Al about two hours to pump all that water out of the basement |
So Al and I went to buy a new water heater to install. I was annoyed at having to deal with this expense, but Al quickly reminded me that I was able to get two and a half years of use from that rusty ass water heater and I should be grateful. And he was right. Anyway, he pumped out the water and installed the new water heater. Unfortunately we had to go to Home Depot, which meant the water heater has the dreaded Honeywell pilot assembly. I’m guessing I’ll have some kind of problem with it next year, so we’ll see.
Property 5
Apt 1 – Ras: $550
Apt 2 – Rich: $400
Apt 3 – Destiny: $525
Apt 4 – Tom: $500
Total Rents Received: $1,975
Mortgage: $0 (won’t start until July)
Property Expenses: $0
Total Profit: $1,975
After the tenants paid rent, I let most of the tenants know that “the owner” wants everyone out to renovate the apartments. Rich is the only one I’m keeping, and he agreed to start paying $500 a month starting in September. While most took it reasonably, Tom really played that violin with statements like:
“I’ve lived here for 18 years! Where am I gonna find a decent place for $500?”
“There’s more to life than just money.”
“Can’t the owner see that we’re all happy here and paid the rent on time? And we take care of the place. Why is the owner so mean?”
As much as I wanted to tell him to shut the fuck up, Tom has a special situation. While the other tenants are month to month, Tom still has a lease that doesn’t end until January of 2019. Technically, he can simply tell me that he isn’t leaving and, as long as he pays his rent, I can’t do shit to him. Since he believes that his lease was with the previous owner and not me, I’d like to keep him in as non-litigious a mood as possible… which means being understanding and nice about the whole situation. So I gave the tenants until the end of August to get out, which gives me some breathing room to get these credit card balances down before the large scale renovations begin.
Lawnmowing Services: $220 [2017: $130]
Net Real Estate Profit for June 2018: -$4,917.39 [2017: $1,885.06]
Let the losses begin! I knew that June was gonna be the first of several negative months as I ramp up renovations, but Property 3's vacant apartment cost about $1,000 more than it should have. That was because I wanted better quality cabinets and supplies so that I could get it rented for $50 more. So it was quite the shock when I put it up for rent and virtually no one applied. Whether the bet will pay off or not solely depends on getting someone good to take that place in July.
Just two weeks before the mortgage was to kick in, my insurance agent tells me that my carrier is dropping coverage for Property #5, and that no other insurer is willing to insure it. The main issue seems to be the Federal Pacific electric panels. Evidently they are prone to fire, and no insurance company will take on a property with those panels installed. I was hoping to use my old electrician Floyd, but he seems to be out of commission. So I'll have to get another electrician, and I'm sure the price is gonna be a pain in the ass.
I honestly didn't see this coming. Then again, that's probably because I didn't get an inspection done when buying the place. I knew getting an inspection would cost money and the seller would choose the buyer who wanted the least inspected, so I hoped that having Alfonso there would be enough. But even he didn't know about the dangers of Federal Pacific panels. Anyway, I have to get them all replaced and make other minor fixes to get the place insurable. So even though I made money off Property #5 in June, it's very likely that this place won't yield another profitable month until November. From July until the end of the year, everything is gonna be about Property 5. I have to get Ras, Tom, and Destiny out of those apartments, fix them up, rent them out, and do all this while building the attic apartment. It's gonna be a wild ride, but I'm not daunted. In fact, I'm very much looking forward to it.
There's a very small possibility that I could make profit in July, but that all depends on how much it's gonna cost to replace Property #5's electric panels as well as whether I can get Property 3 and Property 2 fully rented out.
No comments:
Post a Comment