Leasing & Marketing

Over all, the implosion of the subprime loan market is a disaster to everyone. The large-scale failure of any leading investment vehicle is bound to have reverberations throughout the economy as a whole.

And with the mortgage/loan industry, as previously seen/experienced in the Savings & Loan debacle of the 80s, the resulting mess eventually gets cleaned up by those of us who thought we were smart enough to avoid getting involved in the first place.

Awesome.

I would enjoy the opportunity to wax philosophic about the basis for this implosion (why isn’t THIS issue a “bursting bubble" instead of an “imploding market"? Has the “bubble" cliché gone passé?)

But here’s where I believe there’s something of a sweet-spot for the value investor, who is also likely to be amongst the majority who will eventually be covering that loan default gap produced by the recent spate of reckless lending/borrowing.

Soon, all those ARMs, “teaser" loans, and other exotics are going to explode all over the borrowers, and those properties will wind up in the lender’s lap. None of those lenders (or more than likely: the lenders who loaned to the subprimes, or their syndicated lenders, or on up the chain) are interested in dealing in the disposal of physical real estate. They sell returns on principal, not dirt.

Come late 2008, I’m expecting some DEALS to hit the market. My only hope is that the good multi-units aren’t snatched up in poorly advertised, vaguely mentioned “auctions". I never seem to get notice of those in time…

I've been out of pocket for a while here, cooking up some things involving BED BUGS. It's totally crazy how out of control the issue seems to be. But before I get into that...

Okay, I’ve been angry at Tenants before. I admit it. I’m human. And there’s never a time more typical for a Landlord/Tenant relationship to bubble-over with vitriol then right at the moment where it all ends, and it’s time to settle up. That’s when all the building irritation comes to light, and my, oh my is it unpleasant to look at.

I’ve never been so angry as to pursue any of my Tenants after the end of their lease, to date, as I’ve done my best to maintain a pleasant relationship with them through the course of our business together. But that doesn’t mean that everyone else has such healthy contractual relationships.

Gone Feral’s ex-Landlord is speculated to have gone to some rather creepy extremes to express their displeasure at some of the Feral’s previous slights. Something about their cat, the male half of the Landlord-set, and some sort of stay in a medical facility. Sounds pretty messed up. But then things apparently spiraled further out of control, involving harassing emails, and perhaps even the dispatching of a computer virus. Intrigue indeed!

Speaking of intrigue, what the hell is up with Detroit? Is that economy ever going to pick up in any measurable way? Will Ford ever matter again? At least one decent Landlord there made an effort to be kind to the Breakfast at Gigi’s couple, who were renting in some neighborhood plagued by crackheads and car theft. They requested that they be able to break their lease early to avoid certain tragedy, and the Landlord not only granted their wish without charging a break-lease fee, but even transferred their deposit to another of his properties in another, decidedly safer part of town.

It is a shame that their car didn’t make it out, though.

I’m currently dipping my toe back into the duplex market, back on the hunt. I’ve been particularly pleased with my current Tenant set, wondering why everyone else in the world doesn’t just leapfrog through duplexes.

Which, of course, led me to the interweb to find some contradictory, or at least counter-opinioned stories of duplex investing. I didn’t really find any true horror stories out there. I found the usual recommendations concerning repairs, Tenant selection and such. That’s all fine and dandy, but I honestly wanted to hear of some grizzly investing woes. Properties gone totally awry.

I found this story on Sitting Pretty Financially, one which I’d already read back in April, discussing the merits of different real estate investments (and a kinda healthy dose of bragging on the writer’s part, but that’s alright by me). She maintains the Duplex recommendation while giving fair warning on the dubious nature of Condo purchases.

Oh, Condos! Such the investment cad! So willy-nilly and difficult to pin down!

I am not a big fan of the Condo as a means of real estate investment. You own no land, just the rights to a piece of space above some land of which you may or may not own some miniscule number of voting shares for. Town Homes are typically slightly better, but only because they more resemble an actual home and there are fewer “owners� per square foot. Fewer cooks in the investment kitchen.

Regardless, my search was for duplex stories, and I stumbled one of the friendliest, most earnest approaches to landlord blogging I've ever read. And I read lots of them. This one’s called I Bought a Duplex! I can’t tell how long he/she’s been writing, or whether they'’ll continue, but it’s a rather good read!

Obviously nothing is dissuading me from my pursuit of another Duplex investment. Especially since I feel that we're passing the soft-rent plateau of the past five or so years, as rental rates continue to solidify under current market conditions.

Going out on a pretty sturdy limb here, but I’m pretty sure all of our visitors here are actual DIY Landlords. That, and a plethora of service providers (we are on the internets, after all). But there’s a rather distant chance that someone reading this is a prospective Landlord. Someone who has yet to make the complete jump into the pool we swim in every day.

But for one reason or another, they’ve got a toe in the water.

Perhaps considering the merits of a managed-property investment. Perhaps considering taking over their family’s Landlording business. Maybe their spouse is a Landlord who is currently unable to fulfill their duties as such, and they’re trying to fill that gap.

The obvious and natural question they’re asking themselves is whether or not Landlording is “for� them. It’s a good question for a beginner, and a perfectly reasonable question for even the most seasoned of Landlords: is Landlording in your nature? Letalife has a great 10-point list of things any Landlord, potential or current, should consider. Sure, it’s a UK-based list, so several points won’t apply directly to US markets (the whole “bed sits� and “house shares� thing threw me off for a spell), but the gist of the list is germane.

In my own experience, the toughest part of Landlording is sourcing appropriate Tenants. For the most part, it's an artform. But in recent years, there are better and better tools out there to aid in the search. That being said, for the Letalife bulletin on “reliable, cost-effective method of finding suitable tenants,� where Letalife recommends its UK self, any US Landlord may want to check out a site like Apartments-and-Rentals instead. Pretty much the same marketplace for Landlords and potential Tenants to meet each other, but US based.