Hi new viewer. Every month we mail out this newsletter to our partners. We attach the individual operating statements of each of our partnership properties. I have not attached them here but if you would like to see one or all please write and I will forward. I also give the brief commentary on each building which follows. We call this the Safari Partners IV LLC monthly update. You are therefore seeing the highlights of operating apartment buildings from an owners viewpoint. It is not always positive but as you know, over the long term it all works out O.K. So, warts and all, enjoy.
May 08 Update: (operating statements follow 20 to 30 days behind to accumulte the data.)
The Wilmington Inn and Spa, Wilmington CA: You cannot underestimate the volume of people falling thru the economic cracks in Wilmington. You will see we netted $1,033 on $14,231 in gross revenue. Not our biggest volume numbers, but about average, giving us a 5% annual return on our investment. Valarie, our on site manager, has been able to keep the Inn pretty full but the turnover remains a bit high, and the "in between tenants move in period" is costing us revenue. We continue to raise rents as we are able.
240-250 Calaveras, Fresno CA. : Management problems. We fired Tylar Property Management at the beginning of the month. I toured the building last month and we had two vacancies. Both units have been available /unrented for about 3 months. Both were unclean, one had no toilet. It is no wonder these units remained vacant. These two vacancies have been costing us roughly $1,400 per month. This represents our 5% budgeted vacancy factor and our profit.
222.N. Effie, Fresno, CA: Same story. Managememt problems. We fired Tylar here too. Tylar did minimal fix up work. They did not even remove the plywood covering two broken windows. They prepared no units to rent and simply sat on the building. I made a mistake hiring Tylar and I apologize. As my friend Gary says- "no matter what the temporary management issues, we still own the buildings."
We now have a new management company for both Effie and Calaveras, Southland Property Services. The owner is a personal friend of mine and I have known him for 6 or 7 years. As of this writing, only one vacancy remains on Calaveras, and the second unit is rent ready. Southland has rented 6 of the 11 units on Effie. Southland has very aggressively placed open house, "Se Renta" signs on the busy corners and handed out flyers to fill our vacancies. I anticipate we will be 100% full on both buildings in the next few weeks.
Southland is utilizing a good local handyman for our properties. Troy, a retired carpenter. Troy charges us $15.00 per hour. Tylar was charging $65.00 per hour for the same services. If all goes well we will get more repairs done for less, and the difference will fall to the bottom line. Southland utilizes a web based management program. In next months update I will provide you with the website, a Log in name and password. You can then view our Fresno properties online and check up on each unit, maintenance requests, rent payments etc. I hope you will enjoy this new service.
N street, Fresno CA:- our pending acquisition: The lender was ready to send out loan documents last week. The problem we the terms of the loan were incorrect. The seller had declined carrying a second T.D. on N Street in an amendment to the purchase contract. When our escrow officer forwarded escrow instructions and the purchase contract to the lender she forgot to include this amendment- so the lender assumed we wanted the second TD and gave us a loan under these terms. When I got the loan terms I sent it back to the bank with a copy of the missing amendment and requested our original 25% down payment.
As of this writing we wait.
Rick Padilla, our loan broker, says all his old contacts at the banks are being laid off. He/we now have no "old boy network" to push our deals thru- and this old boy network has been replaced with a new, stringent underwriting staff. As I have mentioned in the past, the underwriting of the loan on N is like nothing I have experienced in the past 10 years. We had to bring in a second strong borrower to be on the loan with us- unlike the Calaveras deal 9 months ago.
Is this good or is this bad? If we can keep raising money the deals to be had are really good and we can name terms with the sellers. Can we get the banks to loan on favorable terms? Time will tell. Cross your fingers that we can close escrow on N Street.
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