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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Micawber who wrote (22014)	7/8/2004 11:33:04 AM
From: GraceZ	Read Replies (1) \| Respond to of 306849

My friends who have done small commercial or mixed commercial/residential around here have done rather well. I have one friend who is the ultimate bottom fisher and doesn't buy anything unless it is at a distressed price. He does his own management and acts as a general during any repairs and improvements. He is also extremely patient in finding tenants who are willing to do a lot of leasehold improvements, who will have a vested interest in staying for years. His style is a little more hands on than I like to be, but the guy has done really well in up markets and down. He never sells anything and all his properties are cashflow positive enough for him to have a very nice lifestyle with little debt. He got burned early on with a residential tenant. The guy was a well heeled lawyer who never paid a dime in rent after the original deposit. It took eight months to get the guy out and it turned out the lawyer had set up his affairs to be completely judgement proof. Baltimore City courts are completely biased towards tenants so even if you have a slimeball like that guy you can do little about it. This pushed him to look at commercial and it was a good move. I've done well with the residential properties but it has also kept me awake nights at times. Dealing with residential tenants is not fun for the most part. I can't tell you how many times I've had them complain bitterly about problems they themselves caused. It's always small annoying stuff like tooth brushes down toilets or water damage from air conditioners improperly installed, etc. They also tend to see paying the rent on time as completely optional. My photo clients are all business owners and I can tell you I'd rather deal with a small business owner any day before dealing with a residential renter even though small business owners can have frequent cash flow issues. At least small business owners have a clue about what the space is worth and are willing to pay you a fair price. The renters have this bizarre attitude that you own the house for nothing and then exploit them for outsized profits. They don't have a clue how tenuous the profit is for a small landlord. Most are financially naive with a child's understanding of how money works.

To: Micawber who wrote (22014)	7/8/2004 4:30:33 PM
From: David Jones	Respond to of 306849

>>>sticking to what I think I know<<< That's pretty much my mantra but it sure looks like it's time to chant a new tune. I'm sick of residential a condition mostly being caused by low rents and poor quality tenants. I've been moving every couple three years cashing out as I go but I've come to like the one I'm in now and may just stay. I have one over priced residence I'm sure I'd like to exchange. I could exchange this single over priced residence into two lesser over priced residences lowering my exposure to equity loss. Or could guess wrong and have to eat it. Flex commercial as XYZ's brought up have there ups and downs like everything else, I've seen it. Warehouses are something I know nothing about and has sparked my attention for their low maintenance. I'm going to get serious here and start to dig around. I find my friends and acquaintances helpful with this subject so they're all in for some free lunches. have a day