What Are You Carrying?

Can any of you real estate investors relate to this? I woke up thinking about a property (actually a number of properties!) that I’ve been carrying for longer than I planned. I ran through my number, exit strategies, assumption, options, etc. Then I realized why they’re called carrying costs.

Stay with me for a moment . . .

For those of you with kids, remember those nine months? For me, the cost of our baby may have been a “holding” cost or “quiet” cost, but for my wife-this was a carrying cost! When we first found out she was pregnant, we were so excited-lots of plans, lots of prayers, lots of talking. I notice that as her tummy got bigger, she seemed more and more interested in having the baby. In fact, in the few days before delivery, it reminded me a little of the scene in Prometheus (nerd sic-fi movie reference) where Elizabeth is desperate to get her “baby” out of her body!

Back to real estate . . .

That’s how I feel about some of my houses. I don’t care (much) how much profit I make, if I break even, or even if I take a loss (ouch!). Please, someone, just take them! Which leads me to the problem: I didn’t properly account for my quiet costs.

What are quiet costs?

• Buying Costs
• Holding Costs-Taxes, insurance, landscaping, utilities, etc.
• Cost of Money-Especially important with a hard money loan.
• Selling Costs-Commission, closing costs, etc.

How about you? How have you done with yours?

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