In regards to SYTE and how I can see growth (thanks scanner and KDAWGFARM) for finally waking me up, I couldn't see the forest for the trees were in the way. After my trip into the twitter sphere I (old dude 51 never tweeted) I had an eye opening experience an a wake-up call so to speak.
In my mind I was seeing what my own experience in the rental game was like not seeing what SYTE saw as their outlook and their capabilities, which is just fine and good and a sound investment strategy.
When I and a few friends got in the rental game we first stated snatching up cheap houses that needed work and we were 5 young guys wanting to get "rich" so we went at it, We worked together and all pitched in everyone had some skill-set he could pull from to pitch in and we built up our portfolio to 13 houses in 2 years, we were on top of the world, then next 5 years we had built it up to 46 homes and then the hammer dropped. The length of time it took to add to the portfolio slowed drastically. We were having to do repairs on the middle to low income homes more than work on new property's as the class of tenant we provided for were a nightmare. The took care of nothing and it was always one thing or the other. And me doing this while trying to run an Antique import export business and the others doing their own thing.
We found ourselves buying into one partners nephews new plumbing and heating business as the repairs in that aspect were through the roof as well, not due to the tenant due to the fact the systems were old and we only upgraded when it was a real need as the properties weren't worth it, we band-aided everything. But, we thought aha, we have part of a business that band-aids cheaper and we also make money on the business. We started a two van electric business for the same reason thinking aha we did it again a new business that not only makes money but we save on our repairs. Then we had a small painting crew as repainting every home was a necessity due to the tenants no matter if they were there for a year or 5, it was how they maintained the property.
We still thought we were doing great property owners/landlords and owners in three small businesses how great. Not so much, we started to see our dream of being big time landlords/property owners had evolved into a large beast that needed constant attention and there we were stuck at that time with 53 homes all needing attention at some point all the time (major attention) it was the nature of the beast.
We figured ok we will sell out the property and sell out the businesses and got into another line of work with all the proceeds, Well that was easier said than done, the properties all needed to be re-done before they could be sold as the improvements were all cosmetic short term solutions, vinyl siding, vinyl windows all needed replacement as they are plastic and it only lasts and looks good for only so long. So there we sat and a streak of luck came our way, the housing boom.
We redid every house as soon as tenants vacated in the natural manner they did, no eviction notices those places were natural turn-styles just another reality in that type of low end rental business. As we re-did them we sold them into a bustling housing market. In three years we were out licking our wounds, and enjoying the looks of our bank accounts. We all did different things with our profits and thanked god for the boom so we could bail unscathed and with a sweet profit, but, that was luck not by design.
Then came the housing crisis and the lady I was dating at the time had an idea. She was a well established real estate broker in the area (Shenandoah Valley, Virginia) there was an old monied lady that had just passed and head three homes in an old historic district that was up and coming. We talked and I was again't flipping market was to bad and going anywhere near the rental game, she explained that this would be different as you were investing in a different type of property and would deal with a different type of tenant. So we jumped in feet first, and re-did the homes as if they were for us to live in and rented them accordingly. It worked great the houses were well maintained the rent was there all the time and with turnover they were 9 times out of 10 already rented out prior to the previous tenants vacating.
And built up from there. We kept firm rules on our properties to invest in, nothing built after 1930, all had to be brick, stone or wood exterior (they last forever) nothing single story, nothing without a porch and all had to have a decent yard. People are proud of their yards even when renting when it comes to that type of tenant. Now we have thirteen rentals in the $2500 a month rental range, except two storefronts with apartments upstairs in the historic shopping district (we get 4800 each for those) and our property value rises year after year, nothing worse than re-doing a property and ten years later needing to throw 20K at it and you have not even made the original re-do $$ back after taxes,mortgage, insurance, repairs and simply put those types of homes do not increase in value as the area they are in and the types of homes they are to start with.
Is there money to be made in the low-end rental game sure,but is it worth it or prudent when you have access to capital, not in my experience. Why buy broken down houses with little value and run around fixing them in broken down old trucks (ambulances) with broken down tools, You only have to rob from Peter to pay Paul and do it the hard way when it is necessary and you have no real capital or access to it. It foolish in the end, but, that's just my life experience. You never have to put up a sign to keep panhandlers away if your not in an area that panhandlers and bums congregate. That's when the light-bulb switches on and one should think, maybe there is a better way.
Holding SYTE and gonna go have a look see for myself just what I think for me, This stock is a double this year and should do so next, which in this stock market is extremely!!! good. No hype or pr's needed it will get there on its own merits, two to three years out that's when one would be prudent and re-look the situations.
Have a great trading day, peace out.
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