I know that you investors out there can relate to my countdown to the day that our last apartment sale closes---Wednesday, October 3, 2007. Four days and counting. We are selling at a loss. Surprise!! If we were realizing a profit than this blog wouldn't exist, right? The loss on the sale is minor compared to the amount of money we put into it.
I can't wait to post all the details about this one. Unintentionally, it ended up being an experiment gone awry. I can tell you that it's a 49 unit (in addition to one converted into an office/laundry room) in Kentucky. It's in a C-D class multi-family area (the class refers to the apartment building, not the resident population--although, I can't lie, there is a relationship between the two). When we first started looking at small apartments in San Diego, we used a great commercial agent who told us that we can either have an income producing property or one that we can bring our friends to--but not both. Get it?
So, this one was supposed to be a good income producing property--once we completed rehabbing about 40% of the units. There's something that never works about projecting numbers, even at worse-case scenario. With a distant rehab, we found out the hard way that it's just too hard to oversee and impossible to predict the unpredictable challenges. There were many, mostly consisting of monthly statements from our various PMs asking for $7,000 to $10,000 a month. I don't know about you, but, with no money coming in from either of our "income sources," it was hard to find that much money laying around. I looked under the cushions and in the washing machine, and, although I have to say that the wash garnered me quite a large chunk of change, it just was never enough.
I bet some of you are thinking that we should have found a way to hold on to both properties so that our losses would not be so great. We played that game for about a year: sell the only the one in OH, sell only the one in KY, keep both, sell both, every scenario that you can imagine. However, we decided that it was best for us and our children to sell both and lose the money, or risk losing more money AND our other properties, too (our primary residence and two SFR). Hopefully, in the course of the next few months, you will have a much clearer understanding of the chain of events over the past two years. Also, as more people start posting comments, I can respond with information that fills in some of the blanks.
As one of my friends explained, "You just need to get the monkeys off your back." Amen. I have never known stress as I have for the past few months. This was the first time in our years of investing that I actually lost sleep at night. Not good. Not cool. Not conducive to shrinking the giant bags that exist under my eyes anyway. I hate to say this, so please don't hold it against me because it's totally twisted, but it gave me great comfort to hear about the troubles that so many were experiencing with foreclosures. I was not happy for the sufferings of others (now that would be really twisted), it was the whole concept of being in the same boat. That's why this blog was born. I pray that our situation will bring comfort and hope to others who feel despair at their financial circumstances.
What a minute! Did I just get sappy on you? Yuck! Wipe that slobber off your cheek. I don't intend to do that too often. So, please forgive me and don't forget to check for a post tomorrow--sans slobber.