When To Take A Break From Buying Properties?
Ok, in the last 9 months, we've been able to get seven properties. That isn't too bad, I don't think.
My partner -the boss, She-Who-Must-Be-Obeyed... My wife! She has suggested that we take a break. Here's why.
We've been repairing many of the income properties that we've purchased which requires $. So she has suggested that we not buy another property until I finish a rehab. we have going. I on the hand want to contiue.
She doesn't want to us into the ground with all the work -no, we don't hire out unless we got a place for a song.
Ok, what has worked for you? Have you been careful with your growth? Have you repaired the obvious on your properties? Do you take breaks, or have you continued with your due dilligence and buy the best deals?
Just looking for some guidance from those who've gone before me.
Thanks much,
OnTheWater 
I too have a Boss similar to yours, however we continue to look as we rehab our income units and try not to end up with unrehabed inventory. That is very costly, but if you find a deal, they usually take 30 days to close and if you have a rehab project going on, you should be able to finish it by then. The worst situation for us was when we bid on 3 HUD repos and won two of then with-in days of each other, combined with a total wall to wall rehab we were doing. BOTTOM LINE, If mama is not happy, papa is not happy. Good luck
Alot of variables to consider as you probably already know.
Things such as how much money you have you reserve. Do you have income outside of your rentals? Do you have mortgages on any/all your propertys?
What sort of vacancy rate do you have on your houses. Does the rent income cover all your mortgages, taxes, insurance etc and leave you a cashflow of $500, a $1000 . . $2000.
How much money do you spend per month on your cars, utilitiess, food etc.
You know basically what is your cushion. I know a guy who only has 25K in the bank but HONESTLY only spends $800 a month for EVERYTHING including housing, utilities, food etc etc. So he could go for 3 years with zero income.
Now if have the same savings but spend 6K a month then of course your cushion is much lower.
[ Edited by MrMike on Date 01/23/2004 ]
OnTheWater,
You private messsaged me to respond to this post so you asked for it.
Let me tell you how I re-hab a property, the thing that bugs me most when I pick up a property are the nails in the walls from where pictures were hanging. For some reason my sellers never remove these nails.
So I developed my own re-hab tool kit, it contains (1) pair needle nose pliers & (1) tube of toothpaste. I gently remove the nail, then take a dab of toothpaste and cover the hole from where the nail was. Wella a total re-hab for me.
If you are making money with what you are doing and you see that you can move the properties you are purchasing then there is only two things you are missing to continue on.
Two dozen Red Roses and a brand new automobile for your wife, I mean the one she really dreams about.
Keep pluging, make hay while the sun shines. I think a re-hab farmer told me this.
John $Cash$ Locke
Ha!!! I wear the pants in my family. It's just that my wife makes the decisions.
I use to be a rehabber, but now I'm just a Spick N'Span kind of investor.
I've seen marriages crumble because of rehab stress placed on the wife. Listen to her. Start thinking about switching or mixing rehabs with cosmetic cures of houses.
Something to think about. Of all the "gurus" that you know and admire, how many advocate rehabbing??.
The rents are covered well.
I have a fulltime job yet.
No vacancies yet.
No rehab. inventory -but my idea was to buy condemned props for near nothing and contract out the work as I continue to work on the one we're doin' right now that way I can do twice as many.
Yep, if mama isn't happy, papa is certainly not happy. LMAO on that one! What a hoot!
OnTheWater
Hey John
Toothpaste.....I bet your rehabs spell minty fresh.
Mike
It sounds like there is currently no bleeding. You're making, not loosing, money on the properties that you have, Right?
What is the worst case scenario? What happens if a tenant does $5K in damage? What if you loose 3 tenants at the same time? What if rents drop by $150 per month in your area? Are you flying by the seat of your pants, and living on the edge? Do you have very different levels of risk tollerance? Where is your breaking point (how low can vacancy go, how low can rents go, etc.)?
It is not uncommon for a couple to get involved in RE and the husband is gung ho, and the wife gets burned out. Often times, the husbands having the fun of wheeling and dealing, and once the deal closes, the wife get's the fun of symbolically feeding it and changing it's diapers. The wife ends up doing the managing, landlording, etc. While you're carrying on as usual at your day job, she has all of her normal duties plus everything that the rentals add to it. I don't know if this is your situation or not.
The biggest thing you need to find out from your wife is "Why". Is she concerned about over-leveraging yourselves? Does she worry that your collective lack of experience will bite you as you grow? Does she worry that her workload is going to triple? Find that out, and let us know. She may have a difficult time pinning it down. Sit down with her at her favorite restaurant and bring it up calmly and listen to every word without offering a counter arguement. She very well may be justly concerned.
You may want to consider some other things as well. Perhaps now is a great time to learn some other ways to make money in RE that doesn't stick your neck out. Sandwich lease options, sub. to's, assignment of contracts, birddogging, may be good ways for you to make money in RE without any extra burdens of owning additional properties.
Finally, words of wisdom can be found in the Bible.
Proverbs 21: 9
9 It is better to dwell in a corner of the housetop, than with a brawling woman in a wide house.
Proverbs 21: 19
19 It is better to dwell in the wilderness, than with a contentious and an angry woman.[ Edited by hibby76 on Date 01/23/2004 ]
The above have given some excellent advice, especially MrMike and Hibby.
As stated, you need to find out why yuor wife really wants to "take a break." You also need to know where you really stand in a worst case scenerio. I've seen a few investors that went "gung ho" on buying properties, but when they had the first little problem, they weren't financially strong enough to survive it. They hadn't saved enough to cover the problems. As one told me, "I flying down the road to success, but the first pothole I hit knocked me into the ditch."
Even if you have the reserves and you've not went over your comfort level for leverage, your wife may have reached hers. If that is the case, then you'll have to consider your rush to grow against your wife's security.
Personally, I have a low tolerance for debt, and I'm a fairly small-time investor compared to others. Currently, I only buy one property at a time. I don't purchase another until a get the last one fixed up and at least under contract/leased. If there is a particularly good deal offered, I might jump on it, but otherwise, I birddog/assign any other deals at the time to other investors.
But that is just me. I prefer to build slowly and surely. As my cashflow and money reserves increase, I take on more properties.
Roger
Quote:
On 2004-01-23 12:02, JohnLocke wrote:
OnTheWater,
So I developed my own re-hab tool kit, it contains (1) pair needle nose pliers & (1) tube of toothpaste. I gently remove the nail, then take a dab of toothpaste and cover the hole from where the nail was. Wella a total re-hab for me.
John $Cash$ Locke
SOOOOO......... your the one that snuck into those apartments with the tube of tooth paste........I spent hours digging that stuff out cuz my paint just didnt look right with that stuff all over the wall.
Next time your in NC I will be glad to buy you a case of Paint-N-Patch lightweight spackling.............I'll even get you a new set of pliers...............(laugh)[ Edited by NC_Yank on Date 01/23/2004 ]
You know I must say: women do not say what they mean ALL the time.
I would bet that Dr. Phil might ask you is:
" Are you sure she wants to take a break from the rehab or is it that she might be wanting to take a break from all the time you are spending on the business?"
Even though you do it together this is not the together women call "quality time"
(Just a little FYI from some of the biggest arguments I've had)
[addsig]
I agree with wheeler my somtimes better half thinks I spend entirely to much time on my buissness, not enough quality family time. I didnt think I spent as much time there ( Im home by six) but I was stealing her time.
ED
NC_Yank,
Ok my final assessment of OnThe Waters sure fire "wife" cure to resolve the issue.
http://www.1-800-cruises.com/travel/cruises/default.jsp?source_num=12204&src=ad&adv=ov&kw=cruise+line&v1=111803
Total "decadence" and their toothpaste complies with painting codes, so take a tube when you depart.
John $Cash$ Locke
GOOD ONE JOHN!!
Age + Experience = WISDOM
[addsig]
7 Words: "A Happy Wife Makes a Happy Life"
Q
Man have you guys got it lucky. After not seeing her the past two days when i finally did I asked her who she was and what did she do with my wife? Hadnt seen her so long I almost didnt recognize her..Sometimes the only time I see mine is when shes on her way out to work at 4 am and I am about to take a nap til 7am and then its back at it again. This may happen 3 or 4 days out the week and then I'll be comotose for about 12 hours straight..but take a break..no way. I'll get all the breaks and sleep I need when im dead..LOL. Sorry but Im still not hearin no fat lady singin over here just yet....
Benny
[addsig]
As "the wife" in our family scenario I have to say that the cruise is the best idea yet!
But also - I like the restaurant idea - and it could just be she's got something else she'd like to spend some money on and she's just waiting for the right time to tell you . . . .
My .02 - Alison
I see my wife every day when we wake up then again when I bring her coffee, when she brings breakfast upstairs, when she brings lunch upstairs and basically all day long since our computers are about a foot apart.
Wife AND life are GREAT!
On the water:
I think Rajwarrior gave you some excellent advice!
My advice would be for you to further your
education in real-estate and create some
more cash-flow by "wholesaling" properties to other investors. It seems like you know how to find them, right?
Then why don't you go out there and create some immediate cash-flow to make the wife feel more comfortable and
wholesale properties to other investors
for 4k -10k per deal! Tell your wife you
are going to buy some more properties,
however you are only going to own them
for a week or so with no rehab!
I think the best thing that happened to me
in my real-estate career was when I put down the paint brush! Stop rehabbing
your own properties and hire someone
to do it for you. Spend your time wisely
looking for other deals you can flip to
investors for some quick cash!
Once you build up your cash, lets say
you buy 4 houses, retail one, rent one and wholesale the other two.
Best Riches,
Jeffrey Adam
[addsig]
Ah, that cruise looks great (8 days and 7 nights along the coast of Mexico!)!
Yep, you could be right... She may want to spend $ on something else; believe me, there aren't any moths in her purse!
Funny you should mention find other ways to make money.
Continuing on with my real estate ed., Friday I bought Successful Real Estate Investing: How to Avoid the 75 Most Costly Mistakes Every Investor Makes
and finished it last night. In that book, he talks a bit about wholesaling. I think I'm going to take a look at not only that, buy Locke's Sub-to stuff.
Any of you wholesale before? If so, could you send me a step by step of a few of your deals?
Thanks,
OnTheWater
You don't need a step-by-step to wholesaling. IF you've already bought and sold properties, you know how to do it, the same way as before, but without all the fixup in between.
Seriously, you buy a house, and advertise "TLC needed", "handyman special" "Investors wanted", etc. Whatever works best for your area. Call on other investors you know, or visit the local REIA and promote the property.
The biggest difference between wholesaling and retailing, besides the fixup, is pricing. You have to make your price attractive to other investors who also want to make a profit. Some new to wholesaling get stuck because they want to make a minimum amount of $$$ per deal. Personally, I'd rather make a $1000 in a week, than keeping a property 2 months to make $5K.
Roger
With out all the fix up, hey? Well, I'd be happy making 1 to 3k/week doing that!
I'll head on over to the whole sale area to take a look.
If I have any questions, I'll send them to you guys.
Thanks,
OnTheWater
I didn't know that you can get the marriage council here as well. WoW. That's great! Does someone have any idea how you suppose to handle 2 girlfriends fist-fighting for a man type of situation?
Hi, new bride here ,
but I must say, I know my gorgeous husband is definatley the boss in our home, since I told him he could be.
By the way Mr Locke, I've used nail polish in the nail holes once...but good ol'white out works best tho, the paint sticks better
OK GUYS.
Maybe you are not letting your wifes help out with the projects.And she feels left out. I am the wife and I like working on the projects as much as he does . Well who said that spending time with your partmer and doing something to get you both at home full time can't be quality time. I go out every january and start looking for the next project. And by march we are starting on the next project And yes I do all the other things around the house. WE WOULD RATHER WORK HARDER NOW THAN HAVE TO DO IT LATER!!!
i like to take breaks during and after rehabs. i will take a couple of days off fishing. it relaxs me. i can then go back to rehabing with renewed vigor........kenmax
My wife plans 2 vacations a year .
The family vacation and the just the two of us vacation.
We spent a week at Disney with the Kids in March and in 2 weeks we leave for Nashville.
She mentions where she would like to go, (now this part is important) I agree and we go.
We will squeeze a week in down the cape during the summer as usual but those were the ones that she felt were important and they were.
I put things on hold during these times and I know this means a lot to her.
Best of Luck
JohnNH