The risk came true....

[Peter 14.7]

Sad but familar story. Too much growth, too quick. My greatest fear with my own business.

The guy is likely to end up the manager for the person who will buy him out for a song. Have you considered buying out the business from him yourself D?

Peter 14.7

 

[WashingtonBrown]

I went straight up to him, shook his hand and gave him a "man-hug"....not too close if you know what I mean...and told him it's only money, we'll get .

What a great attitude - well done.

Regards

 

[yo yo ma]

On a personal note, my tenant was at the meeting and looked like he'd been dragged through the mire and back again. He was deathly pale / embarrassed to be there and forlorn. At least he was there !!!

I went straight up to him, shook his hand and gave him a "man-hug"....not too close if you know what I mean...and told him it's only money, we'll get through it....he seemed to appreciate that.

That is the best thing I have read on this forum... gave me goose bumps all over.
Daz, you are a champion
Steve

 

[Giulio Taranto]

Daz i dont know you but respected you before, and after your last post respect you even more now, you're an absolute legend !

 

[Pushka]

So dazzling, your first post was full of stress and concern, and I suspect you were expecting that you might take a lot of bullocking from people on this forum.

Instead, you have found a lot of support from the forumites, and your gesture above shows how much 'growth' this experience has meant for you. Aint it amazing where experiences can take you, and how much more we learn when things go WRONG, especially about ourselves!

 

[GoAnna!]

So dazzling, your first post was full of stress and concern, and I suspect you were expecting that you might take a lot of bullocking from people on this forum.

Instead, you have found a lot of support from the forumites, and your gesture above shows how much 'growth' this experience has meant for you. Aint it amazing where experiences can take you, and how much more we learn when things go WRONG, especially about ourselves!

That's the great thing about this forum. We may not agree with each others strategies, or others strategies just might not be the right one for ourselves right now, but when the going gets tough we tend to put away our swords and rally round. This is so important because its how you weather these challenging times that really makes one a success (or not). Its easy to say "I told you so" or "you are making the wrong choice" (ie different choices than me) but as this thread shows we can all learn so much when one of us stumbles. Kicking some-one when they are down can only reflect badly on the attacker.

 

[Dazz]

Yes indeed, I'm certainly learning quite a bit about this particular little patch that we are being forced to go through....and also what that spills over into, on a larger scale. Hopefully by sharing some of the steps involved, someone might glean something useful from it.

In terms of the positive reaction from the forum members, I am pleasantly surprised at the reactions written here. It would have been easy for people who differ from our philosophy to hook in and take a swipe at us. That did go through my mind, when initially writing it up, but hoped by sharing the negative experience we were going through, others may learn a bit, and maybe I'd pick up some pearl of wisdom from someone who'd been there and done that.

Looking back, it has been very useful to use you guys as an experienced sounding board. I'm constantly surprised how there is always somehow who has travelled the path beforehand, and how willing they are prepared to share their knowledge. Onya.

Aww, c'mon, I'm getting all gooeey now...I suppose a group hug is next ??

 

[redwing]

Aww, c'mon, I'm getting all gooeey now...I suppose a group hug is next ??

Maybe a Tummy Rub if your lucky

Interesting Post (as always Dazzling) and lots of insights from all that i find interesting

Thanks

 

[kathryn d]

On a personal note, my tenant was at the meeting and looked like he'd been dragged through the mire and back again. He was deathly pale / embarrassed to be there and forlorn. At least he was there !!!

I went straight up to him, shook his hand and gave him a "man-hug"....not too close if you know what I mean...and told him it's only money, we'll get through it....he seemed to appreciate that..

That was really a nice gesture.If he can get back on his feet, you should have the most loyal tenant.

 

[Dazz]

If he can get back on his feet, you should have the most loyal tenant.

Unfortunately that's not going to happen. The big boys in the industry are circling to take over the company's assets etc. By the very nature of the Voluntary Administration process, the decision has been taken fully out of his hands, he is now out of the picture completely. The chartered accountants are now running the show and personal loyalty / working relationships are all straight out the window and she's down to dollars and cents. They have a fiduciary obligation to get back as higher cents in the dollar to credits as possible. The figure of 40 to 45c in the dollar was muted.


Regardless of all of that process, I've just got off the phone with the GM of the largest operator in the industry who desparately wants to lease our site. His site and office is only 4 doors down, so the site is perfect for him. He said regardless of if they are successful in taking over his business that is going under, he still wants to move in.

He said he'd have a look at the assignment provisions in the Lease. I informed him we were operating under a "Letter of Intent" rather than a full blown Lease, and therefore I am free to negotiate and accept offers to Lease right now. I was a bit cheeky and mentioned a pretty wild figure. His ears caught on and we just agreed terms over the phone....woohoo.

A little bit of background on the property ;

We bought the property two years ago for 780K. It was renting for 44K p.a. when we took over. Lots of rubbish, lots of headaches and lots of argumentative scruffy tenants...looked like a bag of sh*te and felt like we had bought a dud.

We had it valued last month at 2.4 M. Tripled in 2 years, we were quite happy with that. The property was renting for 83 K p.a. plus all outgoings, for 5 years.

We just agreed terms with this new large company of 132 K p.a. plus all outgoings (approx. 10K p.a.) for 10 years, with updated market reviews in the rent escalation every 2 years.

Renting yield now 17% nett on initial purchase....but only 5.5% nett based on the new value.

Anyway....better choof off and write up the Lease I suppose. Happy days !!!

This whole saga has turned out to be one of the best things that has happened to us, on a property level.

 

[Mr. Fabulous]

Hi Daz,

That is awesome, truly awesome. In my view this experience is a reflection of the owners of the property. They must be genuinely good people I reckon. As I said to letiha in another thread - opportunity usually comes in the form of a crisis.

Mark

 

[JIT]

A little bit of background on the property ;

We bought the property two years ago for 780K. It was renting for 44K p.a. when we took over. Lots of rubbish, lots of headaches and lots of argumentative scruffy tenants...looked like a bag of sh*te and felt like we had bought a dud.

We had it valued last month at 2.4 M. Tripled in 2 years, we were quite happy with that. The property was renting for 83 K p.a. plus all outgoings, for 5 years.

We just agreed terms with this new large company of 132 K p.a. plus all outgoings (approx. 10K p.a.) for 10 years, with updated market reviews in the rent escalation every 2 years.

Renting yield now 17% nett on initial purchase....but only 5.5% nett based on the new value.

Anyway....better choof off and write up the Lease I suppose. Happy days !!!

This whole saga has turned out to be one of the best things that has happened to us, on a property level.

Great to hear. I think this might be the first time you've mentioned specific numbers about your deals on any forum, and it really does help put what you are doing in some perspective. Eg. a 780k purchase is not too far out of the reach of many resi. investors on this forum...with the upside in this case of yield and CG. 5 stars for this thread from me.

Thanks,

GSJ

 

[LynnH]

Hi Dazzling

Great to hear your good news! Reading your thread has been very enlightening - your honesty and generosity in sharing your experiences (in this and other threads) is certainly very much appreciated!

May you continue to enjoy much success in the future!

Cheers
LynnH

 

[Peter 14.7]

Just voted this thread 5 stars. Great real life example of the commercial game. Can alsmot be summarised as:

market conditions = return versus risk = demand

In a hot market, losing tenants can be good thing.

In a cool market, losing tenants can be bad thing.

As Perth is pumping, you are jumping ( for joy)

Well done D, Peter 14.7

 

[McBrain]

This whole saga has turned out to be one of the best things that has happened to us, on a property level.

Nice one!

The change in the way you must be feeling emotionally today from last week must be incredible.

 

[sunshine]

Oh Dazzling, I just love hearing stories with happy endings.

Well done!

Sunshine

 

[Pushka]

Wow! What a finish for you. You have been through such a range of emotions this last week, great to hear how it has all panned out. Who would have thought it!

 

[willair]

We had it valued last month at 2.4 M. Tripled in 2 years, we were quite happy with that. The property was renting for 83 K p.a. plus all outgoings, for 5 years.
days !!!

This whole saga has turned out to be one of the best things that has happened to us, on a property level.

Well Done,and thankyou for posting the numbers on your property it gives
a person like myself a insiders view on what happens ..
stay happy willair..

 

[geoffw]

We had it valued last month at 2.4 M. Tripled in 2 years, we were quite happy with that. The property was renting for 83 K p.a. plus all outgoings, for 5 years.

We just agreed terms with this new large company of 132 K p.a.

Would that new lease also increase the capital value, yet again?

 

[lizzie]

what a huge learning curve daz - both personally and professionally. i (and everyone else) am very impressed with how you handled the whole situation - and it's turned out the better for you in the long run.

gotta feel for the tenant tho. must be crushing. that sudden expansion can be a real killer - i know of another business where the owner was putting wages on his unlimited credit card for a several months because the business was expanding so quickly, cashflow couldn't keep up. hopefully he will bounce back as well as you have.

perhaps, once this is all over, with his passion and integrity you could become mentors to each other. that would be really cool.

thanks for posting the figures daz - you're an inspiration. scary investing moves for us plebs, but inspirational.