Flipped Out
Hey, sorry I’ve been so distant! I’m really enjoying just living life lately. I guess I got to a point where I just couldn’t stand to worry anymore. So, I’ve decided to really make life worth living again. I’ve been working hard on finishing the hardwood floors in House 17–but, having fun blasting my favorite tunes and singing along at full volume while I work. And, in fact, the house is looking so great now that it feels good to work on it! I just got sick of looking at a construction zone all the time. We got an extension on our construction loan until January, I believe. So, there’s no rush–except that I just want my vision finally completed. I can’t wait for Halloween, Thanksgiving, and Christmas in our new home!
The leasing duties I’ve had for a while at my broker’s property management company were really a distraction for a while. BUT, the little bit of extra money has been nice. And, she needed me there. Now, though, she’s got enough help to allow me more time to finish my own projects. I haven’t told her yet–but, I don’t plan to renew my license after this year. I plan to take a break from investing and have no other reason to keep it active. I’ll find some other part-time gig to provide fun money.
Contractor 3 has gotten pretty far behind on lease payments to us. He’s indicated he’ll be able to totally catch up this week (I’ll believe it when I see it). If he doesn’t give us a big chunk of what he owes soon, I’m going to go ahead with evicting him from all three houses he lease-purchased from us (Houses 4, 8, and 13). I’m just tired of dealing with his excuses. I know the houses are in bad shape now, though. So, we’ll have to sue him for damages, too. I’m sick of worrying about the situation. And, maybe that’s where I needed to be to be able to do what needs to be done. The ideal thing to have happen, though, is for Contractor 3 to pay us what he owes, fix the houses, get tenants, and refinance us out of the houses. I’m not sure where we’ll get the money to fix the houses if he doesn’t pay up. But, I’ll deal with that if it comes to it.
We did finally get an offer on our old residence, House 2! But, it’s from an investor my broker knows who wants to purchase it as a rental. He lowballed us, of course. It’s been shocking as I’ve watched prices go down and down and down some more in our neighborhood! Everyone’s lowering their asking prices to attract what few qualified buyers there are. And, there are more houses going up for sale all the time! I counter-offered with a decent discount. So, we’ll see what happens there.
It’s so bizarre watching the local housing market tank. I did see it coming. But, it’s still weird to watch. I figure it could be five years minimum before we see prices recover here in my local market. Well, I say that, but we haven’t seen the bottom yet! Equity everywhere is going POOF!
At least we got a good deal when we purchased House 17.
I sat down for a chat with my favorite lender for flips last week to see how the credit crunch, sinking economy, and banking crisis has affected them. They said they’d had a few problems (translation: foreclosures). But, they felt like they’d be able to weather the storm OK. However, they’re getting lots of pressure from “the powers that be” not to involve themselves in any more real estate loans.
I told them I’ve pretty much exhausted my enthusiasm for flipping for a while. I need a freaking break from real estate in general. I can’t remember what it was like to only own one house!!! That seems like a dream come true to me! I still have a deep love for renovating properties. But, I think I’ll just concentrate on perfecting our own residence for the next few years.
For now, I’m done. Stick a fork in me. I’m looking forward to going on vacation and not having to worry about what the tenants are doing, if any of our vacant houses have been the target of crime, or if a contract is going to fall because I’m not there to push it through.
People who don’t invest in real estate probably don’t realize how much it can take over your life. I used to go to lots of movies and out a lot more with friends! I used to make time for fun classes and artistic pursuits. I used to love playing games. I’m SO looking forward to getting back to those things! I don’t know why REI can become so all-consuming, but I’ve heard many, many real estate investors say so. My best guesses are that 1) it’s a passion, 2) it’s competitive–you feel like you want to stay ahead, 3) real estate doesn’t stop at 5PM like other industries, 4) there are mortgages, insurance, and property taxes to pay, and 5) if you’re juggling multiple deals, you need every minute you can squeeze out of your day. Burn-out is probably quite common.
And, that’s where I am now!
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You bring up a very valid point. Investors typically attack real estate like Roseanne Bar at a buffet. Especially when the preliminary work results in cold hard cash.
You are correct: REI is a 24 hour gig. Dealing with tenants and their problems at all hours of the day. Having PM companies go flakey. Having all that stress and drama can lead to burn out.
I was hitting burn out with just four units. No clue how you survived with all your properties. Automation has helped tremendously. That and a thick skin and low tolerance for drama.
Wine also helps. Then again, a good plate of sushi takes away a lot of pain.
After 17 houses, I’m kinda sad to see you change directions.
1. The leasing thing can’t be that bad.
2. Maintain your license.
3. Look at multi-families > 14 units. Then there’s a “manager” on site. All you have to do is manage the manager (for the most part).
4. Flipping: look only to add value. Value = more square feet and maybe a bathroom. i.e. a 3/1 —– you add a bathroom and maybe a bedroom.
Best of luck and keep on blogging (sp)?.