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Rehab702,

Thanks again for your help.

Looks like we'll be eating this cost.

No wonder these guys have a bad review!

http://www.apartmentratings.com/rate/WA-Kirkland-Montebello-Apartment-Homes.html

And it looks like the move out charges are pretty standard.

Here's a quote from the tennant reviews written just about a month ago:

"Moving in was fine, Price was right at the time. After our first 10 months, the price was raised $190 / mth. The Employees treat you like you are inferior and unimportant. Upon moving out we were charged almost $1000 for 'A Dirty Apartment'"

Sounds familiar... a little TOO familiar... Looks like this happens quite a bit there.

Rehab702,

Thanks for your help!

So to boil that down in a bit harsher terms...

Because we don't have anything to dispute in terms of evidence, we are pretty much out of luck?

Thanks!
-Sean

Hey everyone!

I'm currently breaking the chains of renting.

I moved out into my Condo, but those pesky corporate land lords are still bugging me and my old roommates!

They charged us a total bill of about 700 bucks upon moving out. They replaced the entire carpet and paint and fixed up a few minor blemishes, and attached a $40 dollar cleaning charge.

I thought we cleaned pretty darn well (but didn’t take any pictures.)

Anyhow, next thing I know, I get another "amended" bill with an additional cleaning charge for $260 bucks!

The reasoning for this was "apartment was really dirty"

Now I realize that "dirty" is subjective.

But can they do this? Can they charge me for cleaning, and then just turn around and charge me for more cleaning, for a total bill of $300 bucks worth of cleaning?!

Seems strange to me.

But as I plan on being a landlord in the very near future, I don't want to disrupt my landlord Karma :)

But I don't want to just lie down and take this if they are just harassing me for more money.

This will bring the move out bill to a little over $1,000 bucks!

Thanks for your help.
-Sean

MikeOH,

I can't seem to find data past 1968, but here's some good info taken from the National Association of Realtors.

http://www.realestateabc.com/graphs/natlmedian.htm

This shows that the average inflation rate between 1968 and 2004 was actually at 6.4%.

When leveraged at even 4:1 you are making a 20% return on your investment even at 5% inflation.

Not bad!

Here's some of the quotes: (From the book "Equity Happens")

Dire Media Predictions

"The prices of houses seem to have reached a plateau, and there is reasonable expectancy that prices will decline." -Time Magazine, 1947

"Houses cost too much for the mass market. Today's average price is around $8,000 -out of the reach for two-thirds of all buyers." -Science Digest, 1948

"The goal of owning a home seems to be getting beyond the reach of more and more Americans. The typical new house today costs about $28,000." -Business Week,1969

"You might well be suspicious of 'common wisdom' that tells you, 'Don't wait, buy now.. .continuing inflation will force home prices and rents higher and higher.'" -NEA Journal, 1970

"The median price of a home today is approaching $50,000.. .. Housing experts predict price rises in the future won't be that great."-Nations Business, 1977

"The era of easy profits in real estate may be drawing to a close." - Money Magazine, 1981

"The golden-age of risk-free run-ups in home prices is gone." - Money Magazine, 1985

"Most economists agree.. . [a home] will become little more than a roof and a tax deduction, certainly not the lucrative investment it was through much of the 1980's." - Money Magazine, 1986

"Financial planners agree that houses will continue to be a poor investment."
- Kiplinger's Personal Financial Magazine, 1993

"A home is where the bad investment is." -San Francisco Examiner, 1996

Note: We got all of those funny media quotes from the great book by Gary Eldred,"106 Mistakes Home Buyers Make -and How You Can Avoid Them".

Why can't values keep appreciating?

They've done so consistently in the US for the last 50 years.

The average appreciation is over 6.3% annually at the moment for the last 50 year period.

For as long as we've been tracking home values, there has never been a year that home values have on average gone negative.

Economists have predicted 25 of the last 2 recessions! :)

Keep in mind we live in an inflationary economy. The government keeps printing money which in turn creates inflation, which in turn inflates the values of assets.

That being said, property values CAN go down, and sometimes do.

On average, they don't.

Especially if you are using a buy and hold philosophy. I have never seen anywhere a period of 10 years, even in the biggest housing recessions, where prices have not stabilized and actually increased in value over their original value.

This bubble babble may be over-hyped.

Minna,

Awesome job!!!!

Congrats to all your hard work, it looks like it really is going to pay off!!

You are going to give a great home to one happy home buyer!!

Very inspiring!!

Thanks!!!!

-Sean

I agree with both sides of this debate.

I think that it is very important to learn as much as possible before acting in order to minimize failure in your efforts.

While that is true, the fear of failure can often cause "Paralysis of Analysis" which is basically becoming too immersed in book knowledge and information and never actually acting on your knowledge.

One great tool to overcome this "Paralysis of Analysis" is to accept failure as a part of success, and actually embrace it as a piece of your journey. This belief will allow you to “Fail forward.”

In achieving success, you do not always fail, but often times you first make mistakes while learning. People often times confuse failure with mistakes.

I think failure is only truly realized when you quit. Otherwise you simply make mistakes and correct them on your ultimate path to success.

-Sean

MikeOH,

I agree, I would love positive cash flow!

And combined with appreciation, that would be awesome!

Also, getting a property for 35% less than its worth would be a steal!

How do you realistically get a property for 35% less than what it is actually worth? How does a seller really lower their price that much without being absolutely desperate to sell, or without the property having some serious problems?

And what does that do for your reputation if you are consistently making offers at 65% of their true value and getting rejected 99% of the time? Wouldn't real estate agents and others develop a bad taste in their mouth for working with you and begin to not take you seriously?

Also, would it make sense to take your positive cash flow and then use that to control another mortgage to help you gain more properties and increase your portfolio?

Thanks again!
-Sean

Thanks for your responses guys!

Ryan Webber, SoBeREI, and charles whitaker, all three of you folks seem to think that a mix of both appreciation and cash flow is the best solution.

SoBeREI, you said that you'd rather have 100 properties in 10 years appreciating at 5-7%. Actually if you put 20% down on a property, then 5-7% is going to be 25-35% return on your personal investment.

For example if you put down $100,000 on a $500,000 property and your property goes up by 7% then your $500,0000 property would be worth $535,000. Since you only put down $100,000 and your property appreciated by $35,000, you effectively made 35%. Even though the property only went up 7%.

So 100 properties appreciating at 5-7% with a 20% down payment would be incredible!

My question would be then, without counting on appreciation and then using cash out refinancing, how would you get those 100 properties in 10 years?

Thanks!
-Sean