Time Out to Review
It's been a little over 6 months since the adventure started and it's been interesting to look back at my misconceptions and general ignorance.
The biggest is that I failed to appreciate how much my SFH marketing model (if you can call 'list it, sort through the applications, and choose a tenant' a model) does not fit the small multi-family. Craigslist is completely ineffective. Postlets exists in a whole different world than my potential clientele. I'm catching my breath and next week am going to community- oriented marketing. Tear-offs, cards in the grocery store, etc. I might even go crazy and buy a newspaper ad. Anticipating that this might be the case, I've already visited some stores in the area and asked if I could, the answer was yes so I'm that far ahead.
The other issue is simply how long it has taken to to turn units. I evidently don't have an inner slumlord and the properties are needing a tad more attention that I planned for, because I have to live with myself too.
Nonetheless, even at 50% occupancy (down from 80%, go me!) they'll pay the mortgage and insurance and another few months should get me truly profitable. I'm using re-finance money to continue so in that sense, the project is self-funded.
I really truly will do the numbers one day soon and post as promised.
Comments (2)
Roy N. - thanks for the words of encouragement. Not that we're planning to sell but our appraisal dropped six figures to the equity line after the re-fi... This cheers me on my gloomy days, I know there is ample value to get it right.
Deborah Burian, about 11 years ago
Deborah, You have to be comfortable and confident with the services and accommodations you are offering. I too like our units to be better than the competition in the neighbourhood - more efficient, healthy, clean, & comfortable. We have a 120 year old duplex which can carry itself when 50% full, but in hind sight we didn't get it cheap enough given what we have done to it and what we have left to complete - we have ploughed all cash-flow back into the property for the past three years. There is a long-term bright light. I has appraised for 30K more than purchase and CapEx - I have no illusions it would sell for that price, but it does give us access to more equity when we need it. When we are done all the rehab on the second unit and reside the building, we will have put another 30K back into the building ... but it has an operating ratio of 38% ... so, once the rehab is all finished, we'll be looking at CFBT between $350 and $450 per month.
Roy N., about 11 years ago