All Forum Posts by: Mike Nelson

Another aspect is to invest in a high crime area that will appreciate in value.  The problem is, it is often difficult to know what will actually appreciate.   I invested in Wicker Park in Chicago in the '80's when it had a high crime rate.  The area actually did appreciate, and now the crime rate is much lower.  On the other hand, I invested in other areas, Humboldt Park, Pilsen, etc. which I thought would appreciate, and did not - or would take much longer to do so.

The problem is I have had a hard time being honest with myself, and basing my decisions on wishful thinking, not cold hard facts.  There is also the aspect of manageability.   I had to deal with a lot of bad tenant situations.  It was difficult back in the day to attract good tenants and keep them.  I am glad I invested in the rough areas, but do not have the patience for these tough management challenges any longer.  For me, the attraction was the anticipated appreciation, not the cash flow.  High cash flow is typically key, which is more my approach now.

What is the value of the land itself?

Art of The Deal by Donald Trump.  This is one of the books that got me pumped up about real estate years ago. I just reread it.  I don't claim the book is better than most of the books mentioned, but there are actually some interesting concepts. The author's father was successful in real estate, and Donald found some success (and failures) in real estate.  He became very well known in reality TV and in politics.

I was curious, what are they paying, and what is market rate?

My personal bias is I don't allow dogs.  If I did, I would charge $1000 per month per dog.  I have two bad experiences.  The first was when a tenant's pit bull attacked me.  I was very fortunate, escaping with just minor injuries, a few stitches to my Achilles area of my ankle.  The bottoms of my jeans legs were shredded, so it could have been a lot worse.

Another incident, the Labradoodle my wife made us get started a small fire on our stove.  She started some chicken on fire which I (stupidly) left on top of the stove.  She turned the burner knob in an effort to reach the chicken.   The fire was fortunately confined to the chicken, but it was burnt solid black.  This occurred when I had to take my son to the hospital, didn't take a moment to check the stove, and returned to home to a smell of smoke.

Thank you @Michael Nelson for sharing!

Any update on this?  I have one washer and one dryer for six units.  CSC ServiceWorks just sent me a letter  stating I have two options (1) they pay me 60% of the revenues above $.72 per machine per day (30x 0.72 x 2= $43.20 a month threshold for the washer and dryer.  Big threshold 

or

(2)  I agree to pay $20.66 per month  $41.32 for washer and dryer, or $495.84 per year - and I get to keep all the quarters.  

They and their predecessor serviced the building since 1987 when I bought it - I never signed a contract.  At these rates, I would be operating at a loss.  I have always looked at providing laundry as a service and convenience to my tenants, not as a income stream, but this is ridiculous.  At these figures, I would be operating at a loss.  

I just bought 17 boxes of heavy luxury vinyl flooring at Home Depot.  I loaded them onto the cart, checked out, loaded them into the Dodge Caravan, drove to the property.  Carrying them from the car up to the second floor was a pretty good workout for someone in their 60's.

What is their rationale for wanting a reduction?  Do they perceive that they are great people and spent money on landscaping?  They do sound like probably good tenants - keep them if reasonably possible.  They need to know how your expenses are.  You may give them something, but you need to keep the upper hand.

There is a multi-unit building on the market built in 1969.  The building has been tested for asbestos, and it was found to exist in the joint compound, not in the drywall itself.    My understanding is the asbestos particles could possibly be released if, say a nail was pounded into he wall to hang a picture, or someone cuts into the wall.  Does this present any kind of health hazard or potential legal problem?  Is the perception of this type of hazard worse than the reality?  Another question is, "was asbestos commonly used in construction during this time"?