I received notification today that I have received the final payment on my last outstanding loan with Prosper.com. I'm now finally through with that experiment. I made a total of four loans and two of them defaulted. One was paid in full over the 3 year loan period and one was paid in full early - about 10 months ahead of schedule. I lost about $350 of my $500 investment.
I've said it before and I'll say it again. Lending through Prosper isn't for me. I can get higher rates of return on loans that are secured by real property. Prosper is apparently going through some sort of registration process with the SEC, so they are not currently accepting new lenders or originating new loans from existing lenders. They have been in this state for a couple of months and they give no indication of when they might start lending again. That's got to be hurting their income.
Once the last payment to my account has been finalized in about 2 to 3 days, I'll transfer my money out of Prosper and close my account.
Apartment Complexes Being Abandoned By Owners (Updated)
This article on msnbc.com today brings up an interesting subject: apartment complexes that are being abandoned by the corporate owners as they go into foreclosure. The examples in the article are all in the Phoenix area, which caught my eye since it's where I live. I've passed this info on to my friend who deals with apartment investing to see what he thinks. He already owns some apartment buildings in Phoenix and knows the area well. Could be some buying opportunities here. Phoenix doesn't have the strong economy that the Houston area does, but if the price is cheap enough, these could be worthwhile.
Update: Heard back from my friend. He and several other investors are indeed watching these properties. Unfortunately, he says the banks that are foreclosing are still looking to sell in the $70K per unit range, which is what they were valued at some time ago. Now they are valued at closer to $30K per unit. The banks will come around eventually.
Update: Heard back from my friend. He and several other investors are indeed watching these properties. Unfortunately, he says the banks that are foreclosing are still looking to sell in the $70K per unit range, which is what they were valued at some time ago. Now they are valued at closer to $30K per unit. The banks will come around eventually.
Fell Out Of Escrow
The property that is the collateral for hard money loan #6 fell out of escrow and is now back on the market.
Nothing much new to report. I've been working on getting my paperwork together for my taxes. The four flipping LLCs I am invested in in California all reported losses last year. The amount ranged from 1% to 3% of my investment. I'll be taking the losses as deductions on my taxes. On the positive side, the people running those have some other LLCs they recently started that are showing profits now. Perhaps the California real estate market is starting to turn around. Either that or they are able to buy at serious discounts.
I just finished reading The Snowball: Warren Buffett and the Business of Life, a biography of Waren Buffett. I recommend it to anyone interested in business or investing. The first one-third was somewhat hard to get through for me because it dealt mainly with Buffett's ancestors and how they came to America and what they did. The latter part of the book was much more interesting, especially since, having been a Berkshire shareholder since 2000, I was reading about events I had heard about through Buffett's annual letter to shareholders.
I am also about 2 chapters into The World Is Flat 3.0: A Brief History of the Twenty-first Century and I can already tell this is another must-read book for anyone interested in business. My wife is taking classes for her MBA and this was one of her textbooks. I'm glad she convinced me to read it.
Nothing much new to report. I've been working on getting my paperwork together for my taxes. The four flipping LLCs I am invested in in California all reported losses last year. The amount ranged from 1% to 3% of my investment. I'll be taking the losses as deductions on my taxes. On the positive side, the people running those have some other LLCs they recently started that are showing profits now. Perhaps the California real estate market is starting to turn around. Either that or they are able to buy at serious discounts.
I just finished reading The Snowball: Warren Buffett and the Business of Life, a biography of Waren Buffett. I recommend it to anyone interested in business or investing. The first one-third was somewhat hard to get through for me because it dealt mainly with Buffett's ancestors and how they came to America and what they did. The latter part of the book was much more interesting, especially since, having been a Berkshire shareholder since 2000, I was reading about events I had heard about through Buffett's annual letter to shareholders.
I am also about 2 chapters into The World Is Flat 3.0: A Brief History of the Twenty-first Century and I can already tell this is another must-read book for anyone interested in business. My wife is taking classes for her MBA and this was one of her textbooks. I'm glad she convinced me to read it.
Update
Time for another monthly report on the Houston apartment complex! In short, everything seems to be going according to plan. Income and expenses are pretty much on-budget, once the repair expenses from the hurricane are reimbursed from the renovation impound account. Also, the hurricane repairs are now complete, so there will not be any more of those expenses going forward. Management is working on upgrading the office entry and resurfacing the swimming pool deck to enhance the overall look of the property. Cash flow for January was just over $20,000. Occupancy dipped in January to 94%, which apparently is typical after the holidays. At the time the monthly report was written (last week), occupancy was back up to the phenomenal 97% again. In going over the financial reports, I see we made close to $400 in pay phone income. That surprises me. I can't believe pay phones get that much use anymore! To put that figure in perspective, the pay phone income was about $20 more than the income from the laundry machines last month and 50% than the income from the vending machines. I should find out if we are getting any sort of monthly payment from a phone company to have the telephone on the property.
As I wrote about last time, hard money loan #6 should be closing soon. I don't have a specific date for when the sale will close escrow, but I am guessing it will be the end of the month.
And finally, next month, my one remaining loan from prosper.com will be paid off. I'll be glad to be able to get rid of that thing. Three of my for loans defaulted and the final one was only bringing in about $3 a month. Hardly worth the time I had to spend keeping track of it.
On a personal note, last week, I achieved my Microsoft Certified Technology Specialist certification for SQL Server 2005. Whee.
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As I wrote about last time, hard money loan #6 should be closing soon. I don't have a specific date for when the sale will close escrow, but I am guessing it will be the end of the month.
And finally, next month, my one remaining loan from prosper.com will be paid off. I'll be glad to be able to get rid of that thing. Three of my for loans defaulted and the final one was only bringing in about $3 a month. Hardly worth the time I had to spend keeping track of it.
On a personal note, last week, I achieved my Microsoft Certified Technology Specialist certification for SQL Server 2005. Whee.
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Hard Money Loan #6 Wrapping Up
It was just a short couple of months, but Hard Money Loan #6 is closing sometime this month. No late payments and everything is in good standing. We got a call from a title company asking for a payoff amount, so the property is in escrow and will be sold. I should have my funds back by the end of the month.
There is also another apartment investment opportunity on the table right now. This is another apartment complex in the Houston area and is being offered by the same group that found Multi #1. The terms are close to the same and in other circumstances, I would invest in this property. However, this investment only distributes profits quarterly and right now I am looking for something with a monthly distribution. That likely means another mortgage on a single family home, like HML #6 was. I also like having a combination of short term and long term investments. The apartment investments are typically for 3 to 5 years while the hard money loans are 1 year or less.
There is also another apartment investment opportunity on the table right now. This is another apartment complex in the Houston area and is being offered by the same group that found Multi #1. The terms are close to the same and in other circumstances, I would invest in this property. However, this investment only distributes profits quarterly and right now I am looking for something with a monthly distribution. That likely means another mortgage on a single family home, like HML #6 was. I also like having a combination of short term and long term investments. The apartment investments are typically for 3 to 5 years while the hard money loans are 1 year or less.
