Now that all the paperwork is handed in and the loan processing can finally begin, I started looking at prospective property Charlie #3 (PPC #3) closely. What am I going to do once I get the place?
The first option is to throw everyone out and remodel everything. I don’t mind throwing everyone out, but the old guy that’s been there for 43 years kinda bugged me for a bit. I mean, this has been his home for over four decades, and now he has to leave just so I can make more money? He seemed like such a nice old man, and throwing him out in the cold cold winter is so harsh. That’s not fair, is it? Well, the answer to that is yes, it is absolutely fair. All the tenants are month-to-month, which means that they can be thrown out at anytime. They could have asked the landlord for a lease to guarantee their safety but they didn’t, and they’re all old enough to know that when a place gets bought, the new landlord might throw everyone out. This is what they don’t show on those real estate shows, throwing out the existing tenants of these properties because it looks sad. But I use the “my fault” philosophy so it’s all fine with me. So fuck them, and if any landlord has compassion for them and chooses to lose money, fuck them too.
So anyway, back to the first option. I would have to remodel the whole place, including replacing the kitchen cabinets, kitchen sinks, replacing the wood paneling in the rooms with sheetrock, and finding a solution to the carpeting issue over there. I hate carpets so I’ll either have to finish the wood flooring (sanding and staining) underneath the carpets, put a “floating floor” on top of the existing wood floor, or some wood look-a-like sticky tile on the existing wood floor. Either way, that carpet has to go. I also want to put central air conditioning in the building. All four apartments have ONE shared furnace, so I have to pay all the utilities which will cut into my profits. That sucks, but the advantage is that, if I want central air conditioning in the building, I only have to pay the price of ONE condenser for a furnace. My HVAC guy Gonzalez says he will do it for $2500, so we’ll see. An apartment with both heating, electric, AND air conditioning free, I can charge $600 for each of the 4 one-bedroom apartments. A profit of $2400 minus the mortgage costs ($500) and the estimated National Grid bill ($300), will give me a net operating income (true profit) of $1,700. That’s $20,400 annually and that’s awesome!
The other option would be to keep all the tenants in their apartments. Condi told me that all the tenants have expressed the desire to stay in the apartments. If I keep them and make the minor repairs needed to make them comfortable, I can throw everyone out in 12 months and use the profits to fix up the property. According to the certified rent roll that was submitted, I should have a little over $14,000 in 12 months if I keep everything as is.
I’ll be honest: I dunno what to do. That’s pretty rare, as I usually have an answer to a proposed question by the end of a post. Both options have me throwing the tenants out, so it’s just a matter of whether I want to do it now or later. Either way, I’m sure I’ll hear the word “nigger” muttered out of at least one of the tenants’ mouths. But it doesn’t matter. I have to make maximum profits from property Charlie, and I’ll do whatever it takes to get it. I have the heart for this business, I just have to use my mind to ensure I make the best decisions possible. I’ll have to think about this, but either way those people will have to go. That's one of the costs of success.
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