All Forum Posts by: Tom NA

Whether you give him an invoice or not for services rendered, you do not want to be this guy's PM going forward. Get out after 30 days. It's clear how he does business and even if he gets his account up to date, you need to cut him loose from a business standpoint as he will surely end up delinquent again. People don't (or rarely) change.

I won't focus on how you got into this as that's past history now - hopefully you've learned your lesson. Don't feel guilty about stopping this situation now just because he's your friend. After all, he doesn't feel guilty about taking advantage of you.

If you don't want to preserve the friendship, tell him you are done caring for his properties immediately. Assuming you want to preserve the friendship, I would tell him *today* that he has 30 days to find a professional property manager and at the end of 30 days, you will cease doing anything for him. Additionally, I would itemize for him exactly what he owes you, based on the 10% agreement you had, and let him know that you expect to receive payment. I suspect he doesn't have the money to pay you but he should be very clear with what he owes you. Alternately, you can forego trying to collect from him and consider that the cost of maintaining the friendship. Which honestly may be your best move since either way, you probably won't collect anything and if you pursue the money, you may lose a good friend in the process.

Good luck and remember, nobody takes advantage of you unless you let them.

So, partying and hanging out aside (which I did in moderation), the fact that I went to school to get my degree only to "work for someone else" makes my education a poor investment? I couldn't disagree more. You're projecting your values of what's important in your life to other people. I've never wanted to own my own business or be an entrepreneur and getting my education led me to exactly what I want in life, including a very nice income. You also plan on using college to lead you to what you want in life - doesn't make college more or less valid an option for you vs. me. We just have different goals.

Everybody has grand plans to make a lot of money - relatively few people ever get there. I would suggest that college-educated or not, the majority of people in this world are just not equipped to be successful entrepreneurs. They can network all they want but they just don't have the mindet, intelligence, understanding, motivation, know-how, discipline, etc to be as successful as they planned. I probably fall into that bucket and I'm ok with that. More people fail than succeed at real estate, opening restaurants, or virtually any other entrepreneurial venture and I think that is lost in this whole discussion. For the select "capable" few, a formal education doesn't hurt but I agree is not necessary - these people will find their way regardless. For the masses, a college education is a huge leg up since the bulk of society ends up working for "the man".

So for now, I've decided to just hold the property. With the buyer unable to bring some skin into the game, it's just too risky a move in my opinion with not much upside. Plus, I've got both units rented out so my monthly cash flow is better than if I were to finance it for a buyer - albeit I get all of the associated landlording headaches. Thanks to all for the input.

Regardless of point of view, I always enjoy a nice, civil debate with varying perspectives and feel that I got one here. Thanks for a constructive debate - it's nice to know that on this site, respectful opinions are treated with the same respect and I do feel we all benefit from sharing and hearing various points of view.

But Tim, you're projecting *your* motivation and ability to find what *you* love with the overall population. Just because someone doesn't go to college, that doesn't exclude them from being a W-2 employee. In fact, I suspect you would find more entrepreneurs that have degrees than don't - yourself included. Sure, you can argue that my annual rise in W-2 income doesn't keep up with inflation but neither does that of the Coffee Shop Worker.

There are entrepreneurs and investors both with and without college educations but your implication is that only the non-college folks can outstrip inflation and someone like myself for some reason can't. I choose to work for "the man" because I really do love my job. Even though my discussion has focused on earning power, loving what I do is more important than anything. Pay me a million dollars a year and I'm still not going to want to flip burgers.

I don't mind Tom Bashing - after all, I told you guys to call me naive in my original post and indeed you have. Part of my point is that I suspect if people were *honest* and you polled a large set of people, you would find a much larger group of non-stock-pilers than the thread might make you believe.

The closest I've come to no access to services is several days of no power or groceries as a kid in a Michigan ice storm and... you got it, we got by just fine with our day-to-day supplies on hand (and as kids we enjoyed the days off of school!). We'll just have to agree to disagree on this - I sleep well at night knowing I'll be taken care of and you sleep well at night with your supplies on hand knowing you'll all be taken care of too. I don't carry a gun either nor do I desire to drive a motorcycle which is different than many of you as well but I'm very comfortable that my ultimate demise in this world will not be related to any of these items.

And to Tim's question around losing my income, I plan very differently for that possibility. In fact, I've lost my personal income due to layoff twice in the last 10 years. And I didn't survive because I had a pantry full of canned goods and water. I survived because I don't carelessly spend all of my income - I have a bank account with money, invest in stock and fully fund my 401k and don't buy fancy cars, etc. so when I was laid off, I had plenty of funds to fall back on - funds that could buy me the supplies that I don't have in the pantry or medical care or job training or whatever else I may need. I can't convert food reserves into anything - I can convert my financial reserves into just about anything I need which is why I place the value there.

I certainly don't expect you to agree with me nor to even understand my logic but I'm certainly not ashamed of it and I do sleep well at night.

Rich - you're taking specific examples which I pointed out anyone can do. My comment stated that *on average*, college grads are far more successful so you comparing an auto-worker to a teacher isn't respecting the *averages*. You could have just as easily compared a worker at the local Coffee Shop to an Attorney. Look it up - all of the recent studies indicate that *on average*, college grads make ~$20k more per year then non-college-educated individuals. So yes, it is true that there is a period of years where the college grad is trying to "catch up" to the non-grad since the non-grad presumably started making money at age 18 but over a lifetime, the studies show college to be worth several hundred thousand dollars in real dollars. And while the cost for advanced degrees is naturally higher, so is the delta in *average* earning power.

You asked for 'thoughts', I'll summarize a few:

o Just because you haven't experienced 50% expenses doesn't make that concept invalid. Remember, this number comes from the law of averages - over several years and several properties. You may be lucky enough to have a property that runs at 25% for the next 10 years or you may be unlucky and run at 85% over the next 10 years and you cannot predict what will happen. You have no idea if your roof will start leaking, 4 tenants will need to be evicted, or someone will injure themselves and sue you. My limited experience has been most years are well under the 50% average but then there are a few years where 50% would have looked great!

o You're using the 'reality' of the best deal that you can find in DFW to rationalize an investment. For some reason, you've already decided that investing in the DFW area *must* be a good thing. That's like saying "I've predetermined that I'm going to invest in an auto company and Ford is the best I can find so I'll put my money there." That doesn't make it a good investment.

o Depending on your market, don't bank on rent increases. My oldest property commands the same rent today as 5 years ago and if that tenant moves out, I would be surprised if I could get someone else to pay me that rate.

o I haven't looked lately so I don't really know what's available but can you really get 6% financing on a NOO property?

o As others have pointed out, your deal isn't the worst and you should generate a little cash flow from it. However, if your desire is to get to the point where the forum agrees that you got a 'good' deal so you feel better about what you've done, I just don't think it's going to happen. Some of the experts have given their opinions and there is really no additional information you can add that will change the professionals' assessment of the deal.

Good luck.

Easy question. A college education is worth every penny and then some and my kids will certainly have that opportunity. I never would have gotten as far as I have without my degrees. You can always find your exceptions but if you look at the data, college-educated people, *on average*, are far more successful and make far more money than non-college-educated inviduals. Some students take some time to find their way and their priority but there is no way I would deprive my children of that opportunity.