Hiya Folks,
Thought I’d share something that happened this week to us.
Everyone who doesn’t agree with our philosophy of property investing, will be glad to know that one of the big bogey risks that normally scares the bejesus out of most investors has come to fruition….as they sometimes do….and so as the ultimate party responsible for paddling our canoe, the problem has landed in our lap.
Received a phone call from a previously unknown chartered accountant on Monday arvo to advise that one of our industrial tenants has gone into voluntary liquidation. OK.
This is a guy who has a fantastic brand name, is a real go-getter, has been in the property for over 18 months and improved the property out of sight to accommodate his business needs.
He’s sunk more than 300K into the property whilst renting it since we gave it over to him, performing the following ;
Cleaned up the rest of the dross still on the block
Extended the height of the roof on one of the sheds from 3.5m up to 6.5m
Fixed the dodgy bros. wonky driveway with a brand new concrete one
Improved security arrangements at the place
Fixed the laydown area at the front with brand new hotmix hardstand
Ripped up the courtyard and concreted the whole area (over 600 sqm)
Painted the entire complex (took 3 men 2 full weeks)
Re-wired the whole complex with 3 phase power
Cleaned out the drains (not easy) and installed new improved drainage where necessary
Installed 2 new office blocks
Replanted the street facade with new shrubery
Constructed a new fuel stand with concrete bund
Paid all of his rent due so far
Paid all of the outgoings on the prop for the year
….and a few other things that I can’t remember
The money in the kitty from the rent payments are enough to carry us through for a further 6 months before we need to chip anything in, so the cashflow side of things is OK.
Seeing as though he was supposedly locked up for 5 years, we had another 3.5 yrs before we could impose a market rent review on him (read jump up heaps).
The wife and I are looking at this as an opportunity to insert some other tenant who can use the infrastructure since improved…..he can’t exactly up and leave with the roads and concrete aprons....at a greatly improved rental rate.
Anyway…..there’s only two things I’m dark about.
1. He didn’t have enough character to call me up and tell me himself, or better still invite me around there and inform me face to face, man to man, in a reasonable manner over a cup of tea. Being ‘advised’ by some stranger who doesn’t really give a rats is p*ssweak IMO. We've got on so well since January last year and he was a real go-getter.
2. I thought this lark was “set and forget”. We’re still wiping these tenant’s noses, even though they are 10 or 20 years older than us….when do they start standing on their own two feet ??
OK, this is your chance to hook in if you so wish and tell me “I told you so”…and “phew, I knew what he was doing was risky….thankfully we didn’t buy that awful stuff”.
Our overall aim is to remove his operation and install someone else ASAP. Dragging stuff out with enquiries and submissions is the last thing we want to happen.
Other than that….it's still happy days…
Thought I’d share something that happened this week to us.
Everyone who doesn’t agree with our philosophy of property investing, will be glad to know that one of the big bogey risks that normally scares the bejesus out of most investors has come to fruition….as they sometimes do….and so as the ultimate party responsible for paddling our canoe, the problem has landed in our lap.
Received a phone call from a previously unknown chartered accountant on Monday arvo to advise that one of our industrial tenants has gone into voluntary liquidation. OK.
This is a guy who has a fantastic brand name, is a real go-getter, has been in the property for over 18 months and improved the property out of sight to accommodate his business needs.
He’s sunk more than 300K into the property whilst renting it since we gave it over to him, performing the following ;
Cleaned up the rest of the dross still on the block
Extended the height of the roof on one of the sheds from 3.5m up to 6.5m
Fixed the dodgy bros. wonky driveway with a brand new concrete one
Improved security arrangements at the place
Fixed the laydown area at the front with brand new hotmix hardstand
Ripped up the courtyard and concreted the whole area (over 600 sqm)
Painted the entire complex (took 3 men 2 full weeks)
Re-wired the whole complex with 3 phase power
Cleaned out the drains (not easy) and installed new improved drainage where necessary
Installed 2 new office blocks
Replanted the street facade with new shrubery
Constructed a new fuel stand with concrete bund
Paid all of his rent due so far
Paid all of the outgoings on the prop for the year
….and a few other things that I can’t remember
The money in the kitty from the rent payments are enough to carry us through for a further 6 months before we need to chip anything in, so the cashflow side of things is OK.
Seeing as though he was supposedly locked up for 5 years, we had another 3.5 yrs before we could impose a market rent review on him (read jump up heaps).
The wife and I are looking at this as an opportunity to insert some other tenant who can use the infrastructure since improved…..he can’t exactly up and leave with the roads and concrete aprons....at a greatly improved rental rate.
Anyway…..there’s only two things I’m dark about.
1. He didn’t have enough character to call me up and tell me himself, or better still invite me around there and inform me face to face, man to man, in a reasonable manner over a cup of tea. Being ‘advised’ by some stranger who doesn’t really give a rats is p*ssweak IMO. We've got on so well since January last year and he was a real go-getter.
2. I thought this lark was “set and forget”. We’re still wiping these tenant’s noses, even though they are 10 or 20 years older than us….when do they start standing on their own two feet ??
OK, this is your chance to hook in if you so wish and tell me “I told you so”…and “phew, I knew what he was doing was risky….thankfully we didn’t buy that awful stuff”.
Our overall aim is to remove his operation and install someone else ASAP. Dragging stuff out with enquiries and submissions is the last thing we want to happen.
Other than that….it's still happy days…
