Some of us have lived long enough to have made an offer on something of great value. Being a classic car, investment property, precious metals or stock. In my case, there was an investment property.
Tenants were paying $950 per month. If I could have purchased the house for $79k or less, the mortgage would have been $660. At that point there would be a profit of nearly $300. It was assessed for $61,000 and there wasn’t really any updates on it, beyond basic repairs. Location was decent, “layed out” in the heart of plattsburgh NY, near down town and close to government buildings.
The garage would have been perfect for my Jet-ski rental business (www.tinyboatrentals.com). Vandalism at my other location has been terrible! Since Covid19 pandemic, crime has increased GREATLY. Anyhow, I would have liked to move into this property but current occupants had a lease until August. Therefore, I could either wait and collect a small profit until the end of their rental agreement or “move on”. However, landlords all over the country are dealing with non- paying renters, and I don’t want any part of that! In either scenario, potential losses were apparent. I couldn’t seeing paying $80,000 and only getting a return of $300, plus waiting several months to move in. Perhaps, if the profit were greater, things would have been more different and resulting a better deal!
More over, there was not enough monthly cash flow for adequate monthly repairs!
We must know when to walk away, regardless of how attached we are to the object. There’s no sense in getting emotional about it. Anytime I bought something when my feelings were too involved, I lost. Moreover, the same investment money could have been “better suited” placed in another deal. One last tip, when checking out rental homes, ask tenants about recent repairs. They are typically more forth coming than property owners, who just want to sell without disclosing all the pertinent details.
Don’t force deals… Create them!
