Rehabs and Rentals: Belmont Ave

We bought this property from a “Semi-Turkey” provider. That basically means that they flip the house to the investor, often with a tenant, but then recommend you to use their property management partner company.

I would not recommend either of these two operations. The turnkey company provided a poor product, in that the renovation was mediocre at best, and the property manage they referred me to was also mediocre.

The property mangers were nice people to deal with but I got they sense they were not going out of their way to save me any money on repairs. Then one day a water main breaks to one of the properties. I get one estimate from the management company for 5K. I ask them how many more bids they are going to get and they say “none, because they know they get the best prices from their pre-approved vendors.”

So I hit the phones and get a bid for 3K within a couple days. I hired that plumber, and put them in touch with the manager, to see it got done. Then of course the manager was “not as easy to get a hold of”…classic. So after it was over, I moved to another manager…who also was not that amazing.

I ended up selling this property under undesirable circumstances, due to the new property manager, I mentioned above. It's a bit of tale that you can read under the 91st case study here. If I had sold it retail I bet I could have gotten at least 120K for it. It still makes me crazy to think about!

Looking at the numbers, you can see most of the money made was amortization equity. Meaning, while my cash flow stunk, at least some of that cash was really going toward equity. But equity is not available as cash until you refinance or sell, so it needs to be tracked separately.

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