All Forum Posts by: Mark Whittlesey

Well, I for one.. am not on board with this if that is the concenus.

First, kudos to the OP. Great topic and I love the call for analysis.

I think that the scenario he envisions is indeed a possible problem. The economy is starting to improve. I don't see the Fed keeping interest rates at zero forever. (And more to the point, we are closer to the end of the zero interest rate cycle than the beginning.)

Yes, the Fed only controls short term rates. Yes, long term rates do not move in lock step with short term. But they are not unrelated.

One of the things I have always liked about REI is that there are no margin calls. But what the OP is referencing here is something akin to that. It is also something that I have referenced in the past: matching the duration of your assets and liabilities. And it's definitely a potential problem with commercial loans.

In this case, you want to keep the apartment complex "forever" but your commercial loan has a 10 year call on it. so you are indeed at the mercy of the interest rate market sometime between now and 10 years from now.

One more note... the OP makes no mention of rents in his post. Because to a large extent... it doesn't matter. The cap rate and interest rate movements have the potential to blow away any rent increases.

Commercial loan explosions have been predicted for a quite a few years already. Have not happened. Maybe this one won't either. But to dismiss it out of hand seems dangerous to me.

Can you elaborate? I mean.. isn't this the holy grail?

Personally, I don't see this a wholesale candidate. Pretty much every house I look at I want to look MUCH worse than this. The interior is clearly dated but fairly well kept.

Yes, it needs upgrading to appeal to a retail buyer. I guess you can try selling that notion to the siblings but they seem mostly aware of it since they already dropped their asking price some.

This is one of the reasons I don't actually get "inspections" any more... the inspector tells you everything in the world that is/might be/could be wrong with the property but gives you NO idea what it will cost to fix.

I send in a handyman to check the plumbing, electrical, roof and general interior and then an HVAC person to check the heating/cooling. I pay them a service call charge and they tell me what the issues will cost to fix.

I have seen this as well (for a LARGE job that I was ready to start work on NOW).

They may be good construction guys but they are bad business guys.

I see only 2 possibilities:

1) They have more work they can handle and expect that to last forever.

2) They don't understand how they get paid.

@Chris K. 

 Cool. Thanks for the update. USPS specifically forbade from doing anything like this years ago. At least they woke up...

I would get a UPS Store (or similar) box instead of a PO Box.

It costs more but is much more flexible (is an actual physical address, can receive UPS and FedEx etc.)

I had a PO Box for a while and got rid of it for exactly those reasons.

These are state law questions. I would ask your tenant/landlord attorney. He can give you the definitive answer for your state...

For me.. the answer is: 3 days then the tenant can start deducting daily rent.

One more point.. It does seem like there was a history with that boiler. Without dates, it's hard to know how far apart the incidents were but if the one where the plumber came out and the one where the boiler gave up, I would call that plumber and ask him about it.

He could. I don't understand this. I have never signed ANY deed as a buyer and I have signed EVERY deed as a seller. As a buyer the deed just shows up in the mail after recording.

Maybe the process is different in NJ.

This is a landlord problem. I would ask the manager to release you from the lease and return any monies that you have paid.

If the manager refuses, small claims court is your remedy.