As my reservist friend attempted to supply us with passes to get on the base, I had an opportunity to chat with the new apartment owner. Meanwhile, the Navy sent us through the ringer in order to gain access to the ship that my friend serves on (even though it was already arranged with the Captain). If terrorists have as hard a time accessing Navy bases as we did, our national security faces few threats (I doubt it works this way, though).
No, I'm sure she meant that the apartments were paying her. She said that they flow $1,000 a month. What?! By now she could no longer see me in the van because I had slithered off the seat and onto the floor, totally deflated and dejected. Don't get me wrong. I'm happy for her and glad that it didn't turn into the disaster that I had predicted, but it really was the salt in the wound for me--a wound that's taking it's sweet time to heal.
Let's tally. After much experience managing up to a dozen properties at a time, we bought two apartments--one for $2,950,000 with almost 20% down, and one for $1,110,000 with 20% down and we couldn't squeeze a penny out of either of them in TWO whole years. As a matter of fact, we paid them lots and lots of money. Now my friend's friend buys one with very little down for $500,000, has zero property management and investment experience, and they flow a projected $12,000/year.
Needless to say, I was speechless.
She wasn't, though. What I found out was that her father-in-law is an experienced apartment investor in the same area of Tennessee. He found the apartment complex for them, hired his management company, and has been overseeing the property. Her husband does make trips back often, but mostly to visit his parents. Also, her father-in-law is a contractor and controls the expenses on her property very closely. He's even looking for another complex for them to buy.
So, what have I learned from this depressing episode:
1) I hate gloaters.
2) I'm green with envy, which is not a good color on me.
3) I should have married someone whose father was an experienced apartment investing contractor in Ohio and Kentucky.
4) I have a hard time believing people who say that they are doing much better than I.
5) How does anyone expect me to overcome my real estate losses with optimism and humor when I'm trying desperately not to be bitter from someone else's success?
6) I'm an idiot.
7) Local ownership--or, at the very least, representation--is key to making a commercial investment work.
I learned all this before we launched the three-hour tour (which we all thought was very informative and fascinating). So, for the entire time, I had to smile and pretend that I liked her. My green coloring was easily explained by the wooziness that I felt being on a perfectly still frigate docked at the pier. The worst part is that I really did like her. I bet her management company likes her, too.