Davo Tries Again

[Davo36]

Davo gets a small payout, for details, see my blog.

[MarkButThis]

Just read the blog. Congrats! and good choice taking the cash.

[DaveW]

Good victory.

Is the property paying a good return now it is fully occupied?

[eri]

well done

that man

[Davo36]

Good victory.

Is the property paying a good return now it is fully occupied?

Thanks guys.

DaveW, the property has always been full from day 1. I built it so it would be - mix of tenancies, all with good profile, undercover parking and of course, balconies!

The commercial tenancies were leased prior to starting construction, which is what kept me going on this project. And I thought the residential bits would rent OK. And they do, there's always people wanting them.

The return is on the low side though. Really need to wait for the first lot of rent reviews on the commercial tenancies which are at the end of this year for it to be worth it.

The residential rents are slowly creeping up which is nice.

If I had done nothing and just held my previous properties, I would have been better off. So building up again...

[DaveW]

Lends weight to what Bob Jones said about all developer going broke doesn't it, at least you are in the position to keep hold of it. What about selling the residential parts, presuming the unit title went ahead.

Pretty much like Trump does, sell off the condominiums at a premium and keep the higher yielding office and retail floors - freeing up cash for more aquisitions.

[Davo36]

Yeah, and the thing is, going into this, I had read all Bob Jones' stuff and agreed with him. But I still did it!

Developments look so promising. They look easier to do and cheaper to do at the start. Even if you've been around for a while, it's easy to get caught. Seems I had to learn the lesson for real, rather than just reading it in a book! Oh well, some of us need to be smacked around the head to learn!

I had thought one day I might sell of the apartments and keep the commercial bits too. They are in a good spot, right on the corner.

Thing is, residential rents and sale prices are going up just now so might be worth holding onto them for a bit longer to get a bit more value out of them.

Also I've been looking around for something else to buy and haven't seen anything. Commercial properties are selling on low yields still. Hard to get any more than 8% on anything decent.

[DaveW]

What about buying an empty warehouse, tarting it up, then getting it tenanted. Something Bob himself used to do.

[Davo36]

Yeah I've done this myself. But they're all very dear just now.

The sell for the same price empty as full it would seem.

[Wayne]

Yeah I've done this myself. But they're all very dear just now.

The sell for the same price empty as full it would seem.

I was just going to comment the same. What is with that? When I had a building empty and put it up for sale (half-heartedly) I got low offers but all the buildings I see want high prices - and seem to get them! Leased now so not selling any more.

[DaveW]

Its because while bank interest rates are low there are plenty of owner occupier buyers. You need to buy something that doesn't so much appeal to owner occupiers and then turn it into something that is. Multi units is one option.

[Davo36]

Hmm yeah. I yearn for the days Bob talks about where there were government departments selling properties and they didn't know what their values were.

So he could perhaps buy an industrial property, tart it up, tenant it, and it would be worth say double what he paid for it. Imagine that?

That's how you really make money.

These days there seems to be so much more awareness of property values and so many more people in the game. Makes it very hard to find the deals where you can buy under value. You certainly can't buy properties for half their value.

Still, I suppose this must add to the demand when selling...

[Wayne]

Its because while bank interest rates are low there are plenty of owner occupier buyers. You need to buy something that doesn't so much appeal to owner occupiers and then turn it into something that is. Multi units is one option.

Interesting thought - I hadn't actually thought about that. Thanks a lot.

[Davo36]

Roller Grille Hassles

Had 2 new roller grille doors installed at my property around a year ago.

Used what I thought was a reputable company, MetalBilt to install them. Cost over $11k plus GST.

A year later, one of them is showing very heavy signs of wear. On closer inspection they have forgotten to install the polypropylene strips in the vertical rails on this one, so metal has been rubbing against metal for a year.

So had to stop the tenants from using the door (they have to come and go from the rear door which is a real pain) and called MetalBilt straight away.

They were evasive from the start and have just sent me an email stating they can fix it, at a cost of $1250 + GST. What fantastic service eh?

Install the doors incorrectly, then charge to fix your mistake.

Needless to say I won't be doing that. I'll be arguing with them until they do the right thing.

But in the meantime, just be aware MetalBilt are not a good company to deal with at all.

UPDATE: Just had a call from a higher up guy in the organisation. They are going to repair the damage at their cost. Phew. It will take a week or so for them to get the parts made and installed but they are going to do it.

Man I hate arguments like this, I actually couldn't get to sleep until around 1am because of it. So relieved they are going to do the right thing. Shame they had to try it on first.

[Bluekiwi]

If you have any problem always just go to the top of the company rather than next step up.
I had a problem with Air New Zealand, wrote to Rob Fyfe, he got on to it straight away.