PAY DAY

We have finally received our first paycheck from our apartment building. $4906.22.

I made color copies of it and plan on keeping it in a special place, sort of like what you see restaurants do with $1 bills put in frames behind the register. Officially it is not the first money that we received from the apartments (we were credited for a prorated portion of the rents at closing), but it is the first official check that we have received from rent.It will not always been for this same amount. The property manager has been doing a lot of work for us, at an hourly rate, in order to get the property in the running condition that we want it to be. They roofing and the siding are still being replaced, but the security gates are fully installed and awaiting fire department inspection. Once these things are fully completed, the property manager will not have as much to do outside of collecting the rent, and any minor repairs that may arise.

As I mentioned in my last post, not all of the tenets are caught up on their rent. But this payment covers two months worth of rents, minus two $800 management fees from the get go. Other fees that were deducted were for permits for repairs, and lawn services that the property manager paid for, new lease fees, and the service fees for each time they had to meet with the various vendors. Basically the property manager pays for the cheaper items out of pocket first and them gets reimbursed from the rent payments. They way she does not have to contact us for every little item that is needed and then wait for us to send the money. It makes less work for both of us.

So, what do we plan to do with this money? Not much at this point. It is going into the bank to re-build up our cash reserves for the next investment opportunity. We are just adding it back into our cash reserves. We are not big spenders nor are we prone to splurging. We are already looking for other properties, and the more cash we can set aside, the more properties we will buy. When the money starts to pile up faster than I can invest it is when I will finally feel comfortable.

Renters

When it comes to our first real estate investment, we are relying solely on rental income as the only source of income. There are no coin-op washersand dryers on site or anything else that could bring in extra income. In away we feel that we are at the mercy of our tenets. We have not raised the rent on them We are considering a moderate increase once the repairs are all done. We realize that our tenets are below the national poverty line, and we do not want to put any extra pressure on them to pay us more money.The problem is that they do not pay their rent on time. It is not just one or two tenants that have this problem, but most of them have this problem. I think that it is not a problem of discipline, but a problem of the lack of money. So, we have been trying to think of a solution. We have discussed payment plans with our property manager, but she did not sound too hopeful.

I have made no secrets of my plans to be a philanthropist, and I genuinely want to help people like our tenants who are at the bottom of the financial barrel, so I have been trying to think outside the box for a solution. I have thought about starting a business where employees could work for me from home, so that I cannot only have these people as tenants, but as employees. The major problem I have with this is that my tenants do not have access to computers, and most if the jobs like this require internetaccess. I plan on doing more research for opportunities for people in these situations to see what sort of solutions area already out there. I had an idea, before we even closed on this property, to give everyone of our tenants, regardless of their payment history, a break at Christmas time. I was thinking of either a discount for the month of Dec, or a freemonth of rent depending on how well we were doing for the year. At this rate I do not know if we can pull it off for this year, but I still want to do something for these people. So, we are considering sending them gift cars to the nearest grocery store.