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7:21 AM
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The property behind hard money #14 has been sold and is supposed to close escrow this week. If it does, this will have been a 6 month loan, which is pretty good. (The mortgage note was for a one year term.) The property was rehabbed in two months and was on the market for four months.
Things are turning around slowly at the Houston apartment complex too. Occupancy for November was 90% and we saw a decline of about $3,000 in rent concessions as well. Revenue is up about $3,000 from the late summer months and $20,000 higher than March, which was the lowest month this year. Expenses dropped due to some management-negotiated utility rebates from overbilling. Management also waived some management fees - not sure why. Cash flow was about negative $1,600, the lowest it's been since February. Things definitely seem to be turning around. Rent concessions, while dropping, are still higher than I'd like to see. They are roughly four times higher than they were in January of this year and three times over the budgeted amount. If we can cut that expense down, the property will easily be back in the black. But that all depends on if the local economy can support that.
In looking at the income statement in more detail, I just noticed not only did management waive their fee in November, but they did in October as well. That's a $4,800 a month savings for the last two months. Obviously, that won't continue. And I believe our mortgage switches from interest-only to interest and principle soon after the first of the year. So we're not out of the woods yet, but we are on the right track.
Things are turning around slowly at the Houston apartment complex too. Occupancy for November was 90% and we saw a decline of about $3,000 in rent concessions as well. Revenue is up about $3,000 from the late summer months and $20,000 higher than March, which was the lowest month this year. Expenses dropped due to some management-negotiated utility rebates from overbilling. Management also waived some management fees - not sure why. Cash flow was about negative $1,600, the lowest it's been since February. Things definitely seem to be turning around. Rent concessions, while dropping, are still higher than I'd like to see. They are roughly four times higher than they were in January of this year and three times over the budgeted amount. If we can cut that expense down, the property will easily be back in the black. But that all depends on if the local economy can support that.
In looking at the income statement in more detail, I just noticed not only did management waive their fee in November, but they did in October as well. That's a $4,800 a month savings for the last two months. Obviously, that won't continue. And I believe our mortgage switches from interest-only to interest and principle soon after the first of the year. So we're not out of the woods yet, but we are on the right track.
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