I was recently engaged in a conversation by a fellow real estate investor concerning minor setbacks in the Raleigh-Durham real estate market.  This discussion on "setbacks” was not based from the perspectives of lack of appreciation, equity, or cash flow.  Tenants were causing this investor’s setbacks.

 

First of all, I sincerely empathize with any of you with regards to your recent real estate setbacks, whether tenant related or not.  Setbacks are an unknown entity in this game.  What is important to focus your energies on is the preparation for these setbacks.  My father always told me that as long as you live through the good times, bad times would soon follow.  Ironically, the good thing about bad times is that good times always follow.  These “setbacks” will always make you stronger to better appreciate your portfolio overall when it is performing more to your liking.

 

I trust that tenant expenses are not a surprise to most of you, although I do understand that they always come with bad timing.  What you may not understand or appreciate is the ability to control your tenant’s actions. 

 

Unfortunately, in our business we deal with all types of people.  Most of them are hard working and honorable people.  Some of them are knuckleheads, and some of them are okay until they are provoked.  Whether you realize it or not, an eviction to most tenants is internalized as being provoked.  If a tenant has lost their job, down on their luck, can’t get ahead, and then, the owner enforces an eviction, they could feel like they are being pushed back into a corner.  Most people can deal with it rationally and keep it moving, but every now and again, we experience a tenant that may choose to damage the property as a means to vent or retaliate at their individual issues and shortcomings.  I would imagine that those who have ever rioted might have suffered with the same emotional state.

 

So, my point is, to just let you know that the real issue is dealing with the human struggle in life.  The issue is also realizing that you are a part of this struggle, as long as you are an investor.  Trust me, if you remain in this game as long as I have, you will definitely have to learn to balance all the challenges you will face. 

 

You have to remember that you may have acquired your portfolio with minimum cash outlay (usually 5-10% down).  You also may have to remember that many of your purposes for these investments were to obtain long-term equity and growth.  While I am not discounting your potential concerns, what you may be experiencing is all a part of the process, unfortunately.  If you don’t physically manage your own properties at some point, you may not ever fully grasp what I have typed.  If you ever need to talk about these types of setbacks, I am here to help in any way. 

 

Go Hard…Everyday… 

 

Gary L. Hooker, Sr.

United Real Estate & Investment Group, Inc.

919-872-6223

919-872-6266  Fax

  

 

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