May 2013 Competition Update

Today was the first day I was late to work without my former Nigerian co-worker Ola to cover for me. I called his replacement at 6:29 to say that I just pulled in but I had to hurry and take a dump, which would explain why I was in the building but not seen. It was all for naught, however, because my boss Sandra won’t be here all week. Overall, it was good but I’ve got to try and make it here n time on Mondays, even if I’m on 3 hours sleep after a 12 hour shift.

Sunday morning I had breakfast with Sha at Friendly’s. I hadn’t seen him in a while, staying true to my resolution of distancing myself from him. I hadn’t written a competition update for a while now, so I wanted to see how he was doing. Things for Sha seem to be the same, as he continues to have issues with idiot handymen and job stability. One issue that came up dealt with one of his properties:

What used to be a nice looking property

What used to be a garage

This is one of Sha’s properties. It’s all boarded up because the loser tenants he had in there did something in the kitchen and the whole place caught fire. It came up in conversation because it’s adjacently around the corner and across the street from what will be my new property Charlie. I told him that I was “driving around and saw it was still boarded up”, and was curious about what he plans to do with it. Of course, I don’t want him to know that I’m simply concerned about how that property makes the neighborhood I’m now investing in look. Sha said that he and his handymen are getting around to fixing it, but it will take some time because the insurance company refuses to cover the fire. I asked why, and he said it was because the insurance people believe that the fire was set deliberately for the insurance money. You see, when one files a big claim like a house fire, the insurance company takes a look at the property owner’s real estate and credit history along with the damages themselves. Sha’s credit history is shitty and, thanks to his strategy of collecting rents and not paying the mortgages for various properties, he also has many pre-foreclosures on his record. Because of this, Sha’s claim was rejected and seen as suspicious. Sha has the right to appeal, but the cost of suing the insurance company isn’t worth it for him, so he has to do repair the place one step at a time. That will take years.

Meanwhile, my brother Rex found a job with a VOIP company in Seattle several months ago. He writes stories about his times there which are pretty funny and sad at the same time. His boss is a maniac who mismanages almost everything and likes to take personal vendettas out on people. He absolutely hates his job and the pay isn’t something to brag about, but he’s no longer unemployed—and that’s the most important thing. If he keeps applying to different tech jobs, he should be able to get a new job with higher pay within 6 months. That seems to be the flow of the job market right now, and a man that learned about computer on his own with no help from anyone should do just fine in this job market. The biggest variable for him will be motivation, but working in an environment like that should be all the motivation he needs. Once he gets a better job, I’m guessing he’ll once again attempt to do his forex trading and keep the competition going.

Sha’s business strategy has turned on him. He collects rent but only pays certain mortgages, leaving the rest to foreclosure. This allows him to build up money faster and buy properties with straight cash, but there are numerous problems with this strategy. He has full-time handy men to pay for. He has a wife with expensive tastes. The money he gets from the delinquent properties are mostly used to pay for repairs to keep the tenants paying rent, so I’m not sure just how much net profit he actually makes. And now, because of his bad business practices, he’s not trusted by the banks or the insurance companies. At the height of his real estate empire, Sha had close to 30 properties in two different counties. Now it seems he’s down to 12 or 13, half of which he doesn’t pay the mortgages on. Only 3 of those properties are in good neighborhoods (the one that caught fire being one of them), so he still has to deal with a lot of welfare tenant/code enforcement/costly repair bullshit that goes along with bad area properties. And now he has to pay for all major repairs himself because no insurance company trusts him, yet he has to pay the insurance every month for the mortgaged properties he plans on keeping. It’s like a self-made trap.

I made a bet a long time ago when I started this competition, that good business practice beats bad business practice. When Sha had almost 30 properties, I had 2. I was going through the same thing as Sha (albeit on a much lesser scale), but I decided to pay my delinquent mortgage on property Alpha. Sha was always telling me that I was wasting my time catching up with mortgage payments and that his way of letting them go into foreclosure while continuing to collect the rent was a better move. The dust hasn’t settled yet, but it looks as if he’s wrong on that belief. I worked long and hard to erase the mistakes I made early on and, in just two days, I should have some level of vindication. I honestly don’t know if I’ll be able to beat Rex, but I’m starting to believe I can beat Sha.


P.S.: This was the first time I’ve ever gone to Friendly’s and didn’t get iced cream. I wasn’t even tempted. Slowly but assuredly, I’m staying true to my sugar diet. I want to get it to the point where it becomes routine and something I don’t have to think about or be tempted by. Looks like I’m on my way.