Posted by DMcGehee.SF on June 01, 2009 at 21:54:42:
In Reply to: Apartment Investing Mistakes sharing posted by james on May 29, 2009 at 17:11:42:
Years ago we purchased a property that at the time was great. We bought it at a steal, it had 100% occupancy, strong operations and above market rents. It was substantially nicer than surrounding buildings.
The tenants were great, most had been in the property for years.
Then the local manufacturing company went bust. Needless to say, almost all of our tenants worked for the company and soon our occupancy plummitted. After the plant shut, the property could never break free of 20-30% vacancy.
We learned some great lessons. 1) Be wary of a property that is dependent on a industry (this is very hard but good due diligence can uncover a lot). 2) Have a contingency plan for every situation. This is just common sense 3)In drastic situations, respond accordingly. We probably should have completely dropped our rents and started to target a new tenant profile but we were stubborn and believed that we'd still attract the highest rents around. The truth was that most of the people in the area couldn't afford the rents. The manufacturing company was by far the best gig in town. The drop off was huge.
- Re: Apartment Investing Mistakes sharing Mike 12:07:26 06/02/09 (1)
- Re: Apartment Investing Mistakes sharing Casey Cavell 08:18:52 06/05/09 (0)