I’m sick of it… I wanna propose this thread be all POSITIVE stuff…y’all down? LOL.
My positive is I went surfing last week and there were 7" waves in Daytona Beach plus bangin rip tides. I went a mile and a half laterally to the beach on my board. First time in 6 years I USED A LEASH. Lifeguards kicked us out but OMG it was great 6 tries two full rides to knee deep.
Of course it was storming and raining but it was sooooo cool.
There is a lot of bad things happening right now and to tell you the truth I’m not sure how to deal with most of em…if the playing field stay level we WILL recover. I think there is a backlog of demand for affordable housing but not right this second and that is killing me.
Keep busy, enjoy this slack time, rechargs your batteries.
Took my son to visit St. Louis Univ. last weekend. Sorry Shawn, didn’t have the extra hours to get to Rolla and back. We had a good time, enjoyed St. Louis. It is a far cry from the disaster of a city I visited 28 yrs. ago.
Returned for my birthday celebration, getting close to middle age now. 12 y.o. son made a fantastic chocolate cake for me.
Winterized 3 homes last week, 2 sales pending this week, 1 or 2 expected repos by Dec. Made 1 call about 2 SFRs for sale. Napped, noodled around on internet, generally have done very little except chat with PMs and collect checks for the past 5 weeks. Might do something or other by April. keeping my options open.
Ps. Now more relaxed that our railroaded socialist government policies have been checked and I’m not going to pursue (un)SAFE ACT compliance.
Well I can say lots of positive things, such as I enjoyed the best summer of my life so far this year with my family. We have an RV and spent 62 nights in it between April and Halloween. We are also amusement park junkies and I personally spent 35 days in various amusement parks this year. It’s sad that it’s all packed away for the winter now.
Having cash flow coming in while I was camping has been a blessing. Money is great and everything, but the unintended positive consequence I never really thought about was all this great quality time with my young children. Priceless. Thank you Lonnie!
Greg, I didn’t start in this business until early 2005 and by that time, my state had been in a recession for several years. Being in a depressed area is all I know as an investor. Ignorance is bliss, I suppose.
My business is mainly LD… it is difficult to do L/H in this area primarily due to the stigma associated with it and severe lack of product. I use the zero-debt approach and have strict criteria to determine what deals I will do or not. I require quick payback of my investment (ve got, as I look for other RE opportunities to invest this cash flow, for long term holding and diversification.
Good to hear a Michigan success story, we desperately need them here.
We’ve adapted in Michigan as well, but it sure isn’t easy. My new attitude is I didn’t cause the banking crisis, but I sure am going to take advantage of it
We now buy FNMA houses at 0.60 on the dollar and sell them at 0.75. Our latest “innovative” purchase was a 12,000 sf strip mall off I-75 bought for $17/ sf from a struggling bank. The best part is we got non-recourse 70% financing from that bank, and the mall is 80% full!
We bought our park just over 5 years ago. Although the park is doing relatively well, our 5 year note is coming due in March. The bank we originally used is really on the ropes, with shares trading at 0.60/share. Our banker warned us they may not be able to roll the note over, but what choice do they really have? Challenges are, we haven’t been able to increase our rent or lower legal fees to try to collect. We’ve also not been able to get new houses into the park, as the area has really been hammered due to plant closures.
Things are great here in the Southeast…money flowing everywhere. LOL, I wish. Seriously, things aren’t as good as they were a couple of years ago but not as bad as others are experiencing.
The positive aspect is that the sum of my businesses (SS and MHP) have had small gains the past two years. My secret was to follow the major companies that experienced profits during this recession. By the way Greg, I agree with you that what we are experiencing is really a depression. Take away the government spending and expanding welfare programs and there would be people standing in bread lines.
Getting back to the secret, most successful companies founds ways to cut expenses and do things smarter because they knew the likelihood of future income growth was slim to none. So, I set out to scale back as many expenses as possible. Unfortunately, that means I’m now working more “for” my business than “on” my business.
A couple of things that helped was taking over the 15+ hours per week in bookkeeping and doing more maintenance, especially on the SS facilities. I actually enjoy getting out a day or so per week getting my hands dirty.
Oh yeah, another very positive thing is that I’ve paid down a ton of principal on all of the loans. Fortunately, I wasn’t leveraged to the hilt when the economy turned and can still service the massive amount of debt I have quite comfortably.
Good to see you back in action. Can’t wait to sit down and have a pot of coffee with you.
So nice to see the familiar and some of the “oldies” coming out to post again. My story is similar to Steve - focus on EXPENSE reduction and manage the income defaults. Four (4) years ago, I made a promise to myself (and family) to spend as much time as possible with my newborn son ~ posting on the internet was the first spare time thing to go. A blink of the eye, a full blown recession later, and next year he goes to school!! Wow does the time go by!
Here are some positives for the collective (in no particular order):
Manage the P/L. Largest line item is debt ~ I managed to catch the tail end of the “good times” and during 2006-2009 paid down $1M in interest only debt (700K seller carry-back and $300K investor investment capital). With good times behind us this reduction is the #1 reason my head is above water today.
Recently took full advantage of all the “talent” on the streets. My “people” team is the best team ever and its because of the hard times. There is no way I could afford (or attract) the people I’m working with today during the “good times”. Same goes for contractor bids and material costs - both of which are a better value today then yesterday. My total expenses in these areas are about the same as before, but the quality and quantity of work product is superior to the “good old days.”
I’ve been consolidating projects: Sold 50% of my holdings in one city and have been repositioning that money back into my largest project.
Take advantage of the buyers market with little deals: I used to sell a Mobile Home subdivision lot (just the lot - no home) for 50K. Lately I’ve been buying back lots WITH the homes for $30K - many times owner financed with no recourse.
Completely eliminate all consumer debt (i.e. - no car loans or cc debt.) and keep liquidity high for those special buys or projects.
Reshuffle older 2002 seller carry-back financing from 10% to 6% interest, all non- recourse AND negotiated early payoff discounts for any principal reductions on my smaller park/subdivision (this particular investor realized our relationship and pay history would be very hard if not impossible to replace. Lower returns for this family are far better then NO returns followed by the uncertainty of any replacement investment).
Looking at this list, it is not a bad list of “good things” that have come out of bad times.
So what I’m working on right now? On my largest project I’m still paying 2005 “investor” terms (second to the mortgage this is the largest line item on the P&L statement). After doubling the investors money from 2006-2009 (that’s no proforma folks, that’s real cash in hand) these folks obviously do not want the good times to end. Unfortunately, they are also not realists and seem to be unimpressed by the magnitude of todays challenges (in fact, they will not even acknowledge the facts I send them like collection and default lawsuits etc.). My stance is straight honesty and simplicity: keep the people who appreciate you and are willing to be a part of the solution, and replace those who don’t. Like employee turnover this is painful and emotional work (and frankly sad). But the project must go on and it is my opinion (supported by my employee turn over and other investor experiences) that in bad times we can all find and become even better investors.
So the time has come to sharpen up the old “syndicating” skills (and network) with the goal of replacing these investors and having enough left over investment capital to buy something new in 2011! Having never missed an obligation, payment, projection or promise it is fun to be back in the private capital arena. I recently started working with a newly retired finance executive in CA (a career man from Boeing with all the higher education degrees a person can earn. Most importantly a man of character, a great father, and a fantastic friend.) on an “investment model” that I’ve been creating, modifying, and kicking around in my brain for the last 5 years. With his corporate credentials and critique, and my street skills, experience and reputation ~ I predict fun times ahead.
By the way, I ventured into building my own website for my big project. Check it out if time permits:
I’ve also rekindled a childhood love of photography. For those who would like to see some pics:
Good to hear from you! Thanks for the update. The community looks fabulous. Is it officially a 55+ community or does it just tend to work out that way? Your photography is very cool. I am partial to the waterscapes.
Glad to be heard from and thanks for checking out the park and pics. We are NOT 55+ but is does tend to attract that crowd. We are also finding that our Canadian snow bird friends have a very strong currency right now. With their dollar on par with ours, Canadians “feel like” they are getting another 40% discount (as compared to 2002 when it was .60 on our dollar). Our prices are already 50-70% off in US$ and I expect this winter to bring a higher volume of sales then last (not higher prices, just volume).
Q - How does one eat an Elephant?
A - One bite at a time.
Q - How does one do business right now?
A - One deal/decision at a time.
The key is to keep making decisions and chewing on that Elephant, one bite at a time
