I met an old friend at a Starbucks downtown. We sat inside, drank our coffee and reconnected. As we ended our chat, exited the coffee shop and said our goodbyes, I turned and saw a man sitting on a bench. He was thin, graying at the temples, had an infectious smile and held a simple cardboard sign “ I am homeless and have diabetes, please help”. He was panhandling for change in front of Starbucks.
When I saw his sign, I understood. My wife is a diabetic, dependent on her injections of insulin to help her live. She worries about what the disease is doing to her body and if there will ever be a cure. I am sure this man had all the same concerns alone with the more immediate one of finding a meal and place to sleep.
I dug into my pocket and pull all the change I had and dropped it into his cup. I asked the man about his disease and how he was doing. His response caught me off guard. “I’m doing great!” “I got me some medicine, my Social Security Disability got approved . I got me a case worker and we are looking for a place of my own” His smile and hope for the future were infectious and I introduced myself.
I found out Melvin was a bus driver and lost his job due to diabetes. He got depressed, started drinking and began the decline. I’m not sure how it happened but he somehow turned himself around. He found a treatment program at Ohio State University and got healthy. He now knows how to manage his disease. In the process he filed for Disability and struggled on his own.
We chatted about living in the 14th Street shelter and how he was looking for a home. Goodwill is offering living assistance for 3 months and by then he will be receiving regular checks. I mentioned a 1 bedroom we had open and Melvin wanted to see it.
In the end, my partner and I worked with Goodwill and Melvin so he could move into his own home. We loaned him a few dollars for the down payment on a bedroom set from Value City and he moved in on the 1st.
Handing the keys to Melvin was heartwarming and reminded me why I wanted to try to make a difference. He told me how excited he was to be able to cook his own food – what he wanted to eat, and to have some privacy once in a while. The entire time we spent together he was grinning from ear to ear and it wasn’t hard to be infected with his smile.
Nov 4, 2010
Mar 10, 2010
The New Tenant
It’s been 8 months since we started our social experiment. In that time, we have spent a ton of money rehabbing a couple of buildings, got frustrated with banks and city bureaucracy, spent time in eviction court and dealt with problem tenants. During that time, we seemed to have lost our way, at least I did. I lost my perspective on our goal of enabling others to help themselves. That is until last week when I met Devon. She is a single mom with 3 boys. She called me looking for a 3 bedroom apartment that would take Section 8.
Our process may be naive, but when someone is interested in renting from us I ask them to fill out a standard application and then we chat. The application is normal stuff, address & employment history, references, contacts & permission to do a background check. While this is interesting, the conversation is what I find insightful and my chat with Devon reminded me of the big picture I lost.
Devon has 3 boys, 18, 16 and 10. She is a single mom, lives in a shelter and is working very hard to keep her family together and raise her kids right. It’s always easy for a parent to talk about their kids and Devon was no exception. In a short while I learned that her boys were in marching band, good students, worked weekends at the nearby skiing facility and summers for the City Parks system. She talked about her challenges keeping the focused on what was important and how proud she was of their accomplishments.
What I saw in Devon, was a parent who was trying to find redemption in her life by providing a better one for her kids. She lived vicariously through them and had reached a point where she was willing to make any sacrifice to provide a better world. After listening to the joy in her voice and seeing the pride in her heart, I knew I wanted to help her continue being a success and find a way out of the shelter.
We are working with Section 8 to get her out of the shelter and into a home. I hope to have her move in next week and we'll see what happens next. It's my hope we are providing a good home and a fresh start for someone who wants to make their life better. I’ll let you know how it turns out…
Our process may be naive, but when someone is interested in renting from us I ask them to fill out a standard application and then we chat. The application is normal stuff, address & employment history, references, contacts & permission to do a background check. While this is interesting, the conversation is what I find insightful and my chat with Devon reminded me of the big picture I lost.
Devon has 3 boys, 18, 16 and 10. She is a single mom, lives in a shelter and is working very hard to keep her family together and raise her kids right. It’s always easy for a parent to talk about their kids and Devon was no exception. In a short while I learned that her boys were in marching band, good students, worked weekends at the nearby skiing facility and summers for the City Parks system. She talked about her challenges keeping the focused on what was important and how proud she was of their accomplishments.
What I saw in Devon, was a parent who was trying to find redemption in her life by providing a better one for her kids. She lived vicariously through them and had reached a point where she was willing to make any sacrifice to provide a better world. After listening to the joy in her voice and seeing the pride in her heart, I knew I wanted to help her continue being a success and find a way out of the shelter.
We are working with Section 8 to get her out of the shelter and into a home. I hope to have her move in next week and we'll see what happens next. It's my hope we are providing a good home and a fresh start for someone who wants to make their life better. I’ll let you know how it turns out…
Jan 26, 2010
OPM
Building a property management business in these economic times isn’t easy. Actually, repair the building and finding the tenants isn’t so bad. The hard part is finding money to keep growing.
My partner & I have built a really good financial model. Our strategy is to find properties that are in need of repair, buy them at a good price, update them to meet market demand and then rent the buildings. Typically, we can find buildings in disrepair at about ½ the market rate. During remodeling we hire local tradesmen to do the work and focus on improvements to make the building more efficient and lower our expenses. This strategy lets us drive an operating margin at about 35%, So, for every dollar in rent, we get to keep thirty five cents. The only problem with what we are doing is that we don’t have enough of our own money to keep going. What wee need is a OPM – Other People’s Money.
Armed with a solid business plan, equity in the buildings we own, cash flow from rents and good credit scores, we began talking to lenders. Boy, were we in for a challenge. What we didn’t count on was how scarce money is after the implosion of the housing market. Banks are absolutely afraid to loan money. I don’t know if there are too many restrictions on debt holdings, too much government involvement or something else, but there is no money to be found. After a month of searching, the best financing we could find was a loan up to the amount of our collateral. Remember, we have clear title to 2 properties which are making money but the bankers won’t even consider it. They’ll take the pink slip to our cars but not the deeds to our buildings.
We did find one place that would make a loan for rehabbing buildings for rent – the Federal Government through Freddie Mac & Fannie Mae. To qualify you need to find an authorized lender and borrow over 1 million dollars. While our model is good there is no way we are ready to make that kind of commitment. So in the end our plan for growth is on hold until the financial market improves.
What concerns me is more than a loan. I wonder how will our economy will every turn around if you can’t borrow money? In every major downturn, the thing that turns the economy around are people who are willing to take a risk. They borrow money to leverage a new opportunity creating jobs in the process, stimulating markets with spending and thus beginning the slow process of recovery. Without access to loan dollars the process will never start. I’m no economist, but I just don’t know how we can turn things around without putting dollars into the market for small business loans.
My partner & I have built a really good financial model. Our strategy is to find properties that are in need of repair, buy them at a good price, update them to meet market demand and then rent the buildings. Typically, we can find buildings in disrepair at about ½ the market rate. During remodeling we hire local tradesmen to do the work and focus on improvements to make the building more efficient and lower our expenses. This strategy lets us drive an operating margin at about 35%, So, for every dollar in rent, we get to keep thirty five cents. The only problem with what we are doing is that we don’t have enough of our own money to keep going. What wee need is a OPM – Other People’s Money.
Armed with a solid business plan, equity in the buildings we own, cash flow from rents and good credit scores, we began talking to lenders. Boy, were we in for a challenge. What we didn’t count on was how scarce money is after the implosion of the housing market. Banks are absolutely afraid to loan money. I don’t know if there are too many restrictions on debt holdings, too much government involvement or something else, but there is no money to be found. After a month of searching, the best financing we could find was a loan up to the amount of our collateral. Remember, we have clear title to 2 properties which are making money but the bankers won’t even consider it. They’ll take the pink slip to our cars but not the deeds to our buildings.
We did find one place that would make a loan for rehabbing buildings for rent – the Federal Government through Freddie Mac & Fannie Mae. To qualify you need to find an authorized lender and borrow over 1 million dollars. While our model is good there is no way we are ready to make that kind of commitment. So in the end our plan for growth is on hold until the financial market improves.
What concerns me is more than a loan. I wonder how will our economy will every turn around if you can’t borrow money? In every major downturn, the thing that turns the economy around are people who are willing to take a risk. They borrow money to leverage a new opportunity creating jobs in the process, stimulating markets with spending and thus beginning the slow process of recovery. Without access to loan dollars the process will never start. I’m no economist, but I just don’t know how we can turn things around without putting dollars into the market for small business loans.
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