Our largest midtown property is a 56 unit complex on Holman St. If you’re one of those people who are interested in where names come from, then you’ll find this interesting:
Holman St. is named after James S. Holman who was the first Mayor of Houston back in 1837. He won in a close race against Francis Lubbbock and Thomas Ward. James Holman received 12 votes while Lubbock received 11 and Ward received 10. Talk about a close vote!
Thanks to Dana Thorpe for the info!
The owner of Fat Property has been known to go on and on about real estate subjects of interest One of the most interesting things in the market right now is the Wrap Around mortgage. In our discussions with owners about purchasing property, the “wrap” come up often. And when is does, we’re often asked to explain how they work.
With that in mind, our very first entry in our Owners Blog will be ironically titled “Lets Wrap”. Check it out
We are pleased to announce our new office and company headquarters, located at 3800 Garrott St. This new office will allow us the room to expand our personnel, as well as provide a better meeting place for our vendors, investors, and partners.
The property is located in a nice 7000 SF corner lot on W. Alabama, in the heart of Montrose just a few blocks East of Montrose Blvd.
Built in 1930, this 3 bedroom 2 bath home has 1600 SF — giving us work spaces that include a large reception area, conference room, mini kitchen, and office space for all our employees. In addition to this work space, there is also a separate bedroom area for out of town guests with washer/dryer, private back entry, and full kitchen.
The property has been painstakingly upgraded inside to modernize many of the features while keeping as much as the original charm as possible.
A large back yard provides room for outdoor entertaining. The back also features a two story guest house that has been almost completely rebuilt. It features brand new kitchen cabinets, stainless steel appliances, new doors and windows, an attached 2 car garage with washer and dryer, new bamboo flooring upstairs, and the addition of a new central air system.
Keep your eyes open for an “Open House” welcome party coming soon!
(picture below shows the building in process of being repainted)
It was a busy year for Fat Property. Lots of new projects and properties, including a few firsts. Here is a quick recap:
Other activities
A lot of tenants think of the typical landlord as Scrooge Mcduck. Taking the rental income and using it to fill a giant pool with gold coins to dive into. Sadly, that’s not the case.
As 2012 draws to a close, we decided to dig into our books to get a global picture of where rental income actually goes. As those who rent from us and work with us know, we’re an open book. So in the spirit of openness, we’re giving our tenants a dollar by dollar breakdown of where your rent goes.
A few notes: I tried to find a quote that someone once told me about accounting. The CEO says to his accountant “How much did we make?”, to which the account replies “how much do you want to have made?”. And so goes with accounting. There are so many ways to look at identical numbers and draw different results.
While our accounting system can generate reports that show every dollar in and out, we have some property types (mortgage notes from properties we sold via seller financing, single family homes with only partial income/expense capture in the system, vacation homes, places we manage for others, etc.) that are not applicable that throw things off. I removed most of those. However, the largest problem with a company like ours doing a report like this is we are often operationally negative on a property for up to years due to capital improvements put into the property. So if we buy a building and put $200k of improvements in, then a report like this would show more than $1 being spent for every $1 of rent collected that first year. And we bought a lot of new properties in 2012.
This also doesn’t take into account insurance costs, which I noticed were not included after I did the chart. Also, the ‘supplies/repairs’ might be inflated as it captures some capital improvements as noted above. And the mortgage number includes principal portions of payments that shouldn’t be included. So I guess what I’m trying to say is the chart below is close, but not exact.
If we take a rental amount of $800 a month, here is where your rent goes:
Mortgage: $267
Supplies: $142
Repairs: $105
Utilities: $105
Taxes: $91
Management fees: $56
Cleaning: $14
Other: $11
Auto / Travel: $7
Legal: $5
Company income: $4
Landscape: $3
Advertising: $2
Permits: $1
So using the estimated data above, about 5 cents out of every dollar goes into the companies coffers for growth. So if one month of rent isn’t paid on a unit, it takes almost two years of renting that unit out before we’re even again.
Again, this is likely not typical as we are not the typical real estate company, but it should be at least an entertaining look at where rental income ends up.
We hate to ever sell property, but from time to time we might sell off a building in order to help fund continued growth of the company and the purchase of new buildings. In this case, it was one of our most recently purchased properties.
1424 Marshall was purchased earlier this year. We did what we do and another investor saw the value we put in. We’ll miss owning Marshall, however we’ll continue to manage it for the new owner.
If you’re looking for a company to manage your buildings, that is a service we offer.
Located at 1624 Holman St, this all brick vintage 1938 building is now ready to be leased to future residences. Fat Property is currently assisting with the management of this property until full ownership is transferred next month. We are working overtime to get units upgraded and ready for new tenants.
The property is definitely a ‘work in progress’. There is much to do, and we’re excited for the challenge. Right now, the property is a bit rough looking. We plan on repainting all the non-brick surfaces, putting in new windows/screens, adding new gating, landscaping, lights, cameras (action!), and more. This property provides a renter an excellent opportunity to rent a small cute unit in a perfect location for a very low rent. And the property offers an “All Bills Paid” option which allows you to move right in without having to worry about connecting any utilities!
Rents start as low as $450/month, or $150/month less that our smaller Montrose properties that are literally 1 mile away.
The location is great. Next to a lot of new construction, as well as several major schools and shopping. Walking distance to almost anywhere you’d want to be (a “highly walkable” 80 out of 100 on walkabilty score!). Proximity to light rail to zip you downtown, Rice, museums, and more. Minutes from Montrose, Heights, and all the actions of our city.
All units are studio efficiency units. Even though they’re studios, they measure in as our largest units of that type. We’re working hard to upgrade the units and make them a bit more modern (new paint, light fixtures, ceiling fans, etc.) while keeping a lot of the original 1930′s charm (octagon kitchen tile, wall mounted faucets, original hardwood flooring, etc.)
See our Holman page for more information or go to our tenant page if you’re ready to apply
You may have already noticed if you’re living in one of the three apartment communities that are currently being upgraded, but if not, we welcome you drive by. Three of our buildings are getting a face lift. 306 Hawthorne, 502 W. Alabama, and 4315 Jack St. are all being repainted. We’ll be adding some pictures to this post soon, as well as some before and after pictures to each property page soon.
For 502 W. Alabama, which we purchased about two years ago, it’s been a long time coming. The siding on the south end of the building (facing W. Alabama) was replaced soon after the building was purchased, however it was never painted. We’ve also never been happy with the paint job inside the courtyard area. But life (new buildings) got in the way of making the visual improvements we wanted. So we added some members to our team who are specifically in charge of “making things pretty”. If you see them around in their “Fat Property” shirts, give them a high 5. They’re there to make us look good – literally.
One of our favorite small complexes in Montrose is 306 Hawthorne. The historic Westmoreland subdivision of Montrose can’t be beat. It’s filled with gorgous historic homes like this one for sale. The property is located at 304 Hawthorne and is literally next door to our small 6 unit apartment community.
If you’re in the market for a nice home in Montrose, you can’t go wrong with this one. And if you’re in the market for a 1 bedroom, we do have one coming up soon at our 306 Hawthorne location. Live in style next to this house for $850/month. For more information, visit our tenant site.
Now this is a pretty cool story — pardon the pun. Forbes has ranked Houston the #1 coolest city. Read more here.
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