Thursday, March 31, 2011

February Apartment Financials

Before I get into the latest financials for the apartment, let me say the Chez Cliff blog has shut down. Cliff started out blogging about REI and, after being laid off, moved into a consultant role and steered his blog in that direction (very similar to what Kenric has done.) Cliff's last post mentioned that he didn't want to be posting on his blog just to post. I can understand that. It's easy to fall into the trap of feeling like you have to post something every week or every X days. I've felt that way too, but my desire to post informative items tends to outweigh that desire, so I can resist that urge, it seems. (Case in point: I noticed I didn't post at all last month.) A while ago, I wrote a post musing about where all the old bloggers that I used to follow went. Many have given up on their blog and / or (presumably) moved on from REI. I'm sorry to add Cliff to that list. But it's pretty clear that he's not abandoning what he was doing. In fact, it's obvious he is enjoying his new consulting business. He just got tired of blogging. It's sad to lose another blogger that I regularly followed, but I understand Cliff's reasons and I wish him the best. (P.S. I'd link to his old blog, but he seems to have taken it down. That's a decision I personally disagree with. Even if I didn't want to blog anymore, I'd still leave the blog up - simply because I think it's got a lot of useful information that people might learn from, even if no new content was being added.)

On to the latest apartment news.

The February numbers are in and the financials continue to improve. February showed a $2,600 increase in revenue from January and more than a $7,000 improvement over December. This is not quite as big a jump as management expected (last month they said they expected a $5,000 revenue increase), but it's still nothing to sneeze at. This month, managment says they are expecting a $2,000 increase in March.

Occupancy inched up another percentage point to 94% while rent concessions dropped by about 10%. Marketing and retention costs also dropped by almost 20%. Perhaps this is a sign the economy in Texas is improving. We received almost $50,000 back from the escrow impound account after the yearly escrow analysis. This is a one-time gain and the money was used to pay off some old bills that were not paid during the leaner months of last year. Overall, for the first two months of the year, we are running about $40,000 ahead of our budgeted income. Granted, that large chunk of change from the escrow impound refund helped us, but moving foward, I think we'll be in better shape. As mentioned last month, our March loan payment will be about $8,000 a month less due to our property tax valuation appeal from last year. That will definitely improve the bottom line. I'm crossing my fingers, but it looks like we might have turned the corner here.

In other news, I have completed the rollover of my Roth 401(k) into my self-directed Roth IRA. As soon as my partner finds a new hard money loan, I'll put those funds into action.

Thursday, March 10, 2011

Self-Directed IRA Is Now Profitable

Last year, I started the process of converting one of my IRAs to a self-directed Roth IRA. It took about 5 months to get it all set up, but it's been rolling along for a while now. I'm pleased to say that, as of last month, it has become profitable. What I mean by that is I incurred about $3,500 in setup expenses to get the everything transferred and the LLC set up. With last month's hard money payment, I have now recouped all those setup expenses and the IRA is now out of the red.

I also recently changed jobs and am now working on rolling my Roth 401(k) from the old job into my self-directed IRA to give me some more capital to invest with.

Wednesday, March 2, 2011

HML #15 Closed And Apartment January Financials.

Escrow closed on this property on Monday, so hard money loan #15 was paid off. Looking for another place to invest now.

The January financials for the apartment have arrived and, as we expected, things continue to improve. Occupancy increased to 93%, up from 88% in December. Revenue increased by $5,000 and management expects the same increase for February. Our property tax impound amount will drop by about $8,000 per month with the March payment following our successful property tax valuation appeal last August. The property still lost money in January, but occupancy is heading up and expenses are heading down, so we are moving in the right direction. For January, our budget called for an $8,500 loss and our actual loss was closer to $11,500, so we are $3,000 off of our budget. If trends continue, we should be looking good for February.
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