The was a major collapse of some sewage infrastructure at one property. It sucked up the majority of the saved funds and then it started happening. The owners were put in a system of catch up - the funds coming in were insufficient to pay current and past commitments. Over time it resulted in a downward spiral where loss of one property would mean the loss of the others.
When we reviewed the case we found:
- that the properties within the portfolio were quite good
- the were under producing from the standpoint of revenue
- no contracts were in place with the tenants
- tenants were tardy in their payments
- some were doing trade offs in terms of fixing aspects of the property and deducting it from the rent
- the insurances were pending renewal
- the owners needed financing fast as foreclosure on three of the properties were pending
- one property actually began foreclosure procedures as the bank sought to recover
- the owners were already cashed strapped, they were doing this as a means of helping less fortunate people
Thankfully this worked out well.
- We were able to assist the client in the formation of their property management entity.
- All tenants were met and new leases were drawn up
- The new leases in had with new terms and conditions guaranteed a positive cash flow for the period of years for which we sought financing for them
- Through obtaining the financing we were able to get back the property which had begun the foreclosure procedures and actually went through the auction process.
- The system for operating such an entity was taught to the owners who now have the templates for not only operating their current stock of inventory, but also expanding their portfolio to include others