QUOTE (investmart @ Sep 11 2009, 07:12 PM) Interesting discussion.
Thank You Thomas for sharing. It was a brave move to purchase that 45-suiter in Detroit!
Like Adam, I am also trying to understand better what was the MAIN issue causing the loss and eventual sale of that apartment building in Detroit:
- was it very few huge unexpected maintenance issues (i.e. foundation, walls, vandalism..) OR was it more an unexpected high ongoing expenses
(i.e. 75% of rent a month(!) instead of the expected 50%)?
Lastly, for how long did you own the building: 1 year or like 3-5 years?
Regards,
Neil
no, it was not a brave move .. it was STUPID ! [Fortunately it was less than 8% of the money in our of our now closed investment pools .. so manageable .. but stupid in hindsight nonetheless]
we had no mortgage. Expenses often exceeded 100% of collected rent due to poor neighborhood, many non-collections, huge heating bills in winter, high taxes, huge deferred maintenance. It was poorly researched in hindsight. I had delegated too much to my then partner .. and did too little supervision ..
We owned it for about 2 years i.e. we bought fall 2007 pre-credit crunch and pre-car industry implosion .. sold a month ago in August 2009.