$287,300 In the hole - Posted by An Old Buddy

Real Estate Investing
1

Posted by Jim FL on August 08, 2003 at 13:40:59:

Old Buddy,
I work with my spouse, sort of.
We each run our own businesses, from home.
She helps me and I help her on occassion, but over all, we each do our own thing.
Right here under one and others foot, daily.
Yes, it does make you get on one and others nerves here and there, and cause some stress.
However, it is nice to take a step back and realize, each day, we get to watch our kids grow up, together.

I like to take time off here and there, and make sure that we each have something “out of the office” to do daily, seperately.
This seems to help.
School has started, and because I’m the busier of the two of us business wise, she handles the kid erranges, for sports and other after school and night time activities.
This seems to help too, because we get time apart.
Beleive me, you need this, just as much as you need “quality time alone together”, “Quality time truly alone” is very important.

It is nice to have another head to bounce ideas off of here and there, and help get things done.
Just be sure to each take time for yourselves, even when it seems there is none.
I took a few days last week at the beach, not all in a rowe.
Yes, I’m playing catch up a bit, but don’t mind, because what had to be done today, will still be there tomorrow if I don’t get it done.
Yes, the 5 a.m. work days sound familiar, and getting up what some might view as late as well.
However, at night, it is quiet, no kids or activities, and paper work, and office work are easier for me to do.
I’m a night owl and always have been, probably always will.
Getting up earlier simply does not work for me, it just keeps me more tired throughout the day, and not sharp.
Rather than change your schedule, take a look at what you do during those times, and become more efficient with its use.
Maybe get someone else to do some things, so you can focus on making money.

Work smart, not hard, something I still need to remind myself of on occassion.
With at least some time off once in a while, as a must.

Good luck,
Jim FL

2

$287,300 In the hole - Posted by An Old Buddy

Posted by An Old Buddy on August 08, 2003 at 24:27:41:

I just made a real barebones calculation as to what I owe creditors and family members…

$187,300 (± a few dollars…)

This is besides mortgages. this includes all debt…

has anyone been in the red, and eventually climbed out of it? I currently have 26 units, 11(?) vacancies, renting them out as fast as I can… but the rehab time and lack of good workers is delaying me…

I cannot go get another job at this point… doing what I am doing is a full time job…

any people out there who have been in my hole and got out?

(thank god, My wife and I am happy and we know in the long run it will have been worth it… evicting $500 a month tenants and paying them off to leave… then all the rehab costs… and I cannot refinance at this time… )

thanks so much to all!

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Re: $287,300 In the hole - Posted by Phong

Posted by Phong on August 08, 2003 at 13:18:01:

Do you like the situation that you’re in right now?
If not then try to find a way to get out of it… If you spend so much time in this (with your wife, too) and not getting what you could easily achieve by getting a full-time job then you need to change your strategies.

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$287,300 In the hole… $187,00 is Biz Debt. - Posted by An Old Buddy

Posted by An Old Buddy on August 08, 2003 at 12:40:45:

That is why both numbers are correct… First I was going to post $287,300, then I realized that that number sownds too lousy to contemplate :wink:

so I seperated my biz debt from my personal debt.

The units are divided by seven properties, ranging from duplexes to sixplexes.

Here is what I have done so far:

  1. called a real estate broker that was recommended to me by an investor that will work for a small commision ( he has sold several houses here in Brooklyn to end-buyers using her, she is not a newbie at the job…)

  2. I will make a calculation now of what my properties are worth. I can probably re-fi my house for $70-80k cashout, maybe more… although I am not sure that is a smart move, to max out my residence…

  3. I will get out of bed earlier in the day. (I work until 5 AM sometimes, but I NEVER et out of bed before 10:30 AM…)

I would like to hear some more advice from y’all regarding this point…

My wife left her job two months ago, she is god-willing due shortly with our first child. (and i am NOT telling y’all what it is… yet!!:slight_smile:

she works with me, takes care of alot of paperwork and she is great at organazation… so we work as a grest team, thank god…

but now that we realized how much we are in debt (even though, I realize from your posts, it may be good debt…)it’s making 24 hours a day constricted, not like when we leave the “office” (a room off the kitchen) the hardship of the day finishes…

anyone work with thier spouse, and have anything to share about this?

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Re: $287,300 In the hole? (or $187,300?) - Posted by Jim FL

Posted by Jim FL on August 08, 2003 at 12:27:27:

A old buddy,
Okay, as other indicated, we know how much you owe, on debts that are not mortgages.
Now, what about equity?
Are these 26 units all single family, or at least some of them.
What about equity in some of those?
Take the larger ones, and liquidate one, or some.
Take this cash to build reserve, and perhaps work for you generating other income streams.

I am at the point in my carreer, where I am doing just that.
Seeking income streams, and trying to get my REI business on auto-pilot as much as possible.
My marketing is getting cranked up SEVERAL notches, and employees will be sought.
Along with a few other small businesses, some internet based, that will generate income monthly as well.

Why?
Because I’ve lost twice, a lot, and while I managed to survive, and start darn near fresh again with nothing…it was the kind of fun I don’t want to repeat.

Here is what I did when faced with a situation that almost fits the description of yours, but with different numbers.
I looked to see what I could liquidate quickly, and did just that.
Even taking a little less cash, and carrying seconds on a few things, to keep cash flow, and get cash now.
I took that cash, refilled my reserves, and spent a bunch marketing and working on other projects.
With the marketing, I cherry picked deals, and still do today.
I buy mostly subject to, but WAY under value.
I then retail the houses, for a slight discount, to owner occupants with financing in place.
This gets cash, and in some cases, holding small seconds creates more cash flow…monthly income.
The cash gets put back into marketing, and other ventures that create more income, and more cash.
A cycle for sure, but one that if run long enough, will make me NEVER have to worry again about how much I owe.

Beleive me, making bad decisions, moving from one location to another with not nearly enough in savings, suffering some theft, health issues, and a slew of other “life circumstances”, and STILL standing here today as a full time investor, FREE from employment, is/was one he-ll of a ride.

The key my friend, and you have it just as we all here do, is to have the ability to make money with little or none.
Use that, forget about the negative attitude, and just knock out goals, small at first, one at a time, until that debt is gone.
If I can do it in a few months time, so can any one.

Good luck, and don’t let this get you down.
You got here somehow, so find a path forward,
Jim FL

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Re: $287,300 In the hole - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on August 08, 2003 at 11:00:05:

An Old Buddy--------------

Well, as GL(ON) says, you are only presenting part of the picture. Why are you concentrating on the “negative?” That is the way losers think, not winners, in my opinion.

How much is the property worth “as is?” How much will it be worth when it is finished up? How much cash flow will you have on each unit? You mention $500 a month rents. If the property is worth more than about $1.25 Mil you are doing fine, it sounds to me like.

Is this your only property? Is this your first deal? Or have you had some other deals before it? If other deals, how did you do on them? Sounds like you must have made money with those otherwise how did you buy this size of property?

If this is your first deal, why did you jump into such a large project as a first one? Didn’t you listen to the advice that a lot of us give here on CREONLINE.COM website to start small and work up to big projects?

I hope you are working more than 8 hours a day to get those units up and running.

I know what you mean about having a hard time finding good workers. Even when you pay what seems like a high pay, the quality of applicants for the work is still variable and largely low. I hire by putting a classified ad in the local Classified Flea Market–a classified ads-only paper. I don’t hire from the ads run by the people seeking jobs. RULE: He who places the ad gets the better of the deal.

A couple of weeks ago I scheduled four new people to show up start work: 9 am on Monday, Tuesday, Wednesday, Thrusday. Not a single one showed up. I scheduled a fellow to show up on Friday who had worked for me on Wednesday and Thursday, paid him Thrusday evening. Friday: no show. Five days in a row with no shows. When I called h is home on Monday, the person said “We don’t know when he is going to be able to work. He may not get out of jail until next week.”

Oh yes, the glamorous life of the real estate millionaire-in-the-making.

I don’t know you, so I don’t know if you will make it or sink. But, given the project you have going, it sure sounds to me like you can make it.

Persistence is the “secret” of real estate investing success. Keep on keeping on. Try to find some fun in the frenzy. Try to learn and enjoy the process as much as possible. After all, you are probably on the journey a lot longer than you are resting at the end.

Good Investing****************Ron Starr***********

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Re: $287,300 In the hole - Posted by David

Posted by David on August 08, 2003 at 06:48:01:

Do you want to sell it?

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Re: $287,300 In the hole - Posted by Linda Simms

Posted by Linda Simms on August 08, 2003 at 05:29:11:

Dear An Old. I sympathize with your plight. Sometimes it seems like there is no bottom to the hole. However, look on the bright side, there is always something positive in life. Perhaps you need some out of box thinking? Find some new ways to make money in R.E. or deligate some responsibilities so you will have more time. You have got to have a goal and a plan to get there. Is it achieveable? If not change the plan. Maybe you need to go do some wholesale flips to get some cash? Maybe a second mortgage to get some cash to tide you over. Perhaps some innovation to get the vacancies rented now? The power of not giving up and looking on the positive and persistence, persistence, persestence can work wonders. Empower yourself and light the fires.

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Re: $287,300 In the hole… $187,00 is Biz Debt. - Posted by GL - ON

Posted by GL - ON on August 08, 2003 at 16:15:41:

Are you really in the hole? Add up everything you own. Set that down. Now add up everything you owe. Set that down. Now subtract what you owe from what you own.

I expect you will be pleasantly surprised to find out that you are doing better than you thought. And that you are a lot better off than you were a year ago. And if you keep on the way you are, you will be even better off in another year.

This is the only way to be sure where you stand. I know it feels right now like you are working like a dog and getting noplace but lift up your eyes off the ground and take a good look at what is in front of you, and what is behind you , and what is around you and you will feel different.

I wish I could put this in some fancy way that would make you feel better.