Saturday, March 21, 2009

Oh wait, I still HAVE a blog?

Oh, Crap,I'm sorry. I didn't think anyone really gave a shit about what was going on in my life or my business. Ok, Ok, I'll give a recap on how things turned out.

I won my court case against the tenants from the previous year for $5000. The court ruled it as a no-contest and just gave me what I wanted.

The current Tenants broke the lease and moved out on the 31st. At the time, I told them no hard feelings, and I would forward on their security in 30 days.

Since the house was still messed up from the first tenants, and now more (medium) damage from the last tenants, I had decided to keep the place vacant for the month, and remodel the place once again. I fixed all the things that were driving me nuts.

My phone business was suffering because I spent all my time at the house fixing it back up. By the end of the month, my sales had plummeted because I could not spend any time at it.

The first tenant and I settled for $2000 cash to drop the whole thing and move on. We parted peacefully, and apologized for really messing up each others year with this nonsense.

I opened up a Home Depot Credit Card to try and bury some of this remodeling cost.

By the end of the month, the cost was about $1500-$2000 in materials to fix it back up to it's original glory, and then some.

I found a tenant who signed a lease and wrote a deposit check to move in on December 1st. As it turned out, the check bounced. Needless to say, I did not let them in.

Because of tight money, I did not pay the insurance payment.

I used the $2000 from the lawsuit to pay for some repairs, and the rest went to pay for the month's mortgage.

The house stayed vacant and I could not find anyone to rent the place no matter what I tried. The insurance company dropped me since I did not pay them. Later in the month I signed with another insurance company.

I stabilized my phone business, and was ready for my board game sales to skyrocket with the holiday season. That never happened. Lots of traffic, but sales were terrible.

I had another couple who signed a lease for January 1st. A little digging revealed that they were evicted earlier in the year and did not pay the landlord. Once again, I canceled the lease.

I opened a Credit Card with a $1000 limit, and used the money to buy inventory, and float credit card purchases for customers, since deposits took 3-4 business days.

I did not have enough money to pay the mortgage. This started my credit spiral into oblivion.

On January 18th, I found a tenant, and signed a lease.

On January 20th, some nosey person from Craigslist went to my property, looked in the window, and saw that my basement was flooded. They called the fire department, who broke in, shut everything off, cleaned it out and left a note. A few days later, I went to get the last of my stuff out of house, and discovered that I had a flooded basement earlier in the week.

I decided to make an insurance claim, and quite surprisingly, they accepted it, and paid for everything. The downside was that quite a lot of work that was just completed, now needed to be redone. Drywall, Tile, doors, sink, tub... all of it was ripped out because of the moisture. My real motivation for doing this was because earlier in the year I had another flood from the same location (different pipe) that had left much mildew growing since I ignored it the first time.

Still did not pay mortgage, but had started a workout with them. Credit continued to tank.

To make this quick, I submitted a quote for $7500 and had the work done for $3000. So, when it all ended, I walked away with over $5,000.00 cash. I used this money to pay off most of the companies begging me for money all year long. I also invested a bit into my phone business on office supplies, new computer equipment, etc. Still had some left over as a financial cushion.

Tenants are settled and happy. They pay rent early.

My Phone business went through the roof. I guess income taxes started coming in, because I went from 10-20 phones in January to over 100 in February. I became completely overwhelmed and my under-structure of the business/office/tracking completely fell apart. I was lost under a sea of money in/out/returns/repairs. I realized that if I wanted to succeed, I needed to rebuild my inventory tracking and billing procedures from the ground up. This is what it was like to run a real business.

The bank gave me a really shitty workout that only fixed their best interest, and did nothing to fix my real problems. I sat on the paperwork for the next month trying to figure things out.

I hired a bookkeeper who is building my company inside of PeachTree. The bottom line reason for PeachTree as opposed to Quickbooks was because of inventory tracking. I wanted to track the serial numbers on the phones to ensure that any returns were really my phones. As I have started selling more and more brand name phones, it would otherwise be easy to have me fix someone elses broken stuff. The bookkeeper will likely cost several hundred dollars just to get this up and running, but it will be a benefit in the long run. As I said, the way I was doing business before was collapsing under it's own weight.

I hired an assistant. My wife wants to know where I am getting money to pay for him. I explained that as long as I continue to give him money generating work, he will make his own salery. As an example, I have been having him build CraigsList ads for the items I have in stock. Once they are built, they can just be relisted every few days and a regular customer generator. It has worked out as I expected, if not better.

Basically, if I sell a phone from CraigsList, that is a local customer. They are then showing it around to friends. My referrals in the past 30 days has started snowballing and I am getting more cold calling with no extra effort.

The assistant actually offered to take less pay, if I teach him how I am running my online business. He has tried to get his own stuff off the ground, but was not successful. So, I get cheap help.

I also found another go-getter who is out trying to make sales. He knows my price, so he can mark it up whatever he wants, and make the sale. Once again, someone else does the work, and I collect the money. I like this idea.

The insurance company dropped me (No big surprise). The new company cost $50 more per month, but since I walked away with $5000, I think I made out quite well.

I signed the workout and sent it in. Basically they are taking out a 2nd loan for $40/mo to payback the missed payments. This means I need to deal with the house taxes separately. Oh, did I mention I did not pay taxes all year long and now they put a lien on it? Yeah, I need to have the bank open an escrow account to pay that off. So, that means the monthly cost is going to skyrocket. with these 2 extra payments.

The tenants want to buy the house, so I am going work out something from that angle. I will be quite happy to just be done with that money pit, and buy something else at a better deal. It cost me way too much per month to keep that property. I think it has paid me back quite nicely over the years, despite the headaches.


Travis Milne said...

Thanks for the update, I used to read this when the updates were frequent, but it's still in my blog reader so it's nice to see an update.

-Kyle Out said...

Glad to see everything sorta worked out, I wish I could comprehend all of this. I have been looking at cars all day on craigslist and those people are damn liars that want $1500 over kbb for their cars that I drive 30 minutes to go look at. And are pieces of shit. I have to buy a car in cash no bank will finance me being a RE agent less then 2 years. Anyways good luck with the lien on the prop. Glad to see you update this, and glad you got cheap help for you online biz. My eBay business tanked because of the econ. But fuck it
-Kyle out

JoAnn said...

Whatever happened with your account?

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