All Forum Posts by: Mike Nelson

@David Faulkner thank your concerns, but my son has recovered from pneumonia and is going back to school today.  Bur there is more to the story about the Labradoodle and my son''s health.  We could never afford to buy this dog.  She was most generously given to us by the Make-a-Wish Foundation and three wonderful volunteers who represent them.  Make-a-Wish helps families with children with life-threatening diseases.  My son had leukemia, and he picked the dog rather than a trip to Disney World.  We are now most thankful to be looking at a full recovery, thanks to the people at Children's Memorial Hospital, my wife, and the many friends who have supported us.

Thanks for the comments,  @Nat Chan, I am glad you found it entertaining.  It helped me see things in a new light and be aware of potential dangers.  I will keep the animal in her "crate" (actually a cage) as necessary.  She is actually a great dog with a good disposition.  Her only other negatives that come to mind is she has destroyed several pairs of shoes and books by chewing on them.  Fortunately, she has largely out of the chewing stage.

Yesterday my dog started a small fire in my home.  As a landlord, I do not allow dogs, but since this is my house I deferred to other members of the family and got a Chocolate Labradoodle (seriously, that is what it is called).   At 7:00 pm,  my wife and I took our son to the hospital because he had a minor case of pneumonia.  As the others were staying overnight at the hospital, I returned home alone.  I arrived home to a strong smell of smoke, and found the right-rear burner of the gas range turned on, with two very charred chicken drumsticks sitting on a white ceramic plate.  Fortunately, there was nothing flammable for the fire to spread from the chicken to.  The dog, Bonnie, despite being small-medium-size, has developed a habit of reaching for food items on the counter, and despite lacking opposable thumbs, had apparently turned the gas knob.  I am normally obsessive about order in the kitchen, especially around the stove.  The chicken was both the bait or attraction for the dog and the fuel, complete with grease and all.  This has pointed out that I need to see all possible aspects of fire safety, including eliminating the incentive for the dog to turn on the gas range, and repeating the need to  keep the range top clear.  Beyond that it gave me another reason for prohibiting tenants to have dogs.

In the Chicago area looking for, say, 50 units, I find it a challenge to find a property with a sufficient return on investment, because of supply and demand.   Beyond that selecting a competent management company would be an important component of the process.

The kitchen with the black-painted cabinets look great, but is that because it says trendy, or are they inherently better looking than natural wood?  I remember when natural wood was trendy and painted cabinets were considered dated.

These places have a lot of great family memories, with several generations of family!

 @Rich Weese thanks for writing.  I enjoyed your book!  I don't have a crystal ball, but I do know things run in cycles, and I look carefully what my return on investment will be moving forward several years in the future.  If prices are in fact too high, the return will be poor, not to mention loss of equity due to decrease in property values.

Is there any possible upside with upgrading the units, or any value for redevelopment?  I recall the resort I went to as a kid in Tomahawk called Spittin' John's, a group of eight little summer-only cottages on Lake Tomahawk, Wisconsin.  Someone bought the land with all the little old cottages and built year-round homes there.  

Generally like most things the average a property manager is determined by supply and demand.  The key, to me is having a property manager who is competent, honest, and hardworking.  This is not a given by any means.  As far as compensation.  I don't mind paying a highly competent property manager the "going rate" .    I don't want to overpay, but I don't them to not be adequately compensated.  If I am underpaying them, over time they will not be motivated to perform.  A fairly paid excellent manager can be money well spent.

Since you already successfully turned over one unit for $725, you have strong evidence the units are actually worth $725, as well as the amount of response and demand for the units.  This is a good solid benchmark on how you move forward.  You will need to consider the time and money required to turn units over, and the probability of several units being available at a given time.  To some extent, it is a calculated risk as to how many are vacant at once.  Tenants should generally expect a new owner to raise rents. The big picture is it looks like an opportunity for income growth.