The Plight of Mr. Jordan (Part 2)

Marty Sunshine and I have been discussing at great length Mr. Jordan and his situation since I found out his homes are in foreclosure. It chills me to think this happened to him. He, like us, was undercapitalized. He, like us, had his fair share of rental homes. He, like us, opted to manage them himself long distance.

His situation really got me thinking. What was different?

1. We have business partners. Mr. Partner and Jack share part of the burden. With Jack, if something breaks, we pay half. With Mr. Partner, if the money is available in the coffers, we take it out of there. Last summer we had three trashed homes and the money wasn't available in our business account. We both put in some to cover our expenses. And, we had a few.

2. Location, location, er... location. I have one house on a minorly busy street. It is in a questionable neighborhood. Next door lives a crack addict. Across the street lives the guy who stole my air conditioner. These people didn't live there when I bought the house. But, if I knew then what I know now, I wouldn't have bought in that neighborhood. Most of my homes are scattered over three counties in the greater Birmingham area. Mr. Jordan's homes were in the same subdivisions, thus making the neighborhood one big rental zone. Most of his houses backed major roads or undesirable retail establishments. Even renters want to avoid living in places that back to those conditions.

3. Quality homes for quality people. Mr. Jordan preferred section 8 renters because he is guaranteed rent. However, after dealing with the aftermath of his tenants, I am here to tell you, I witnessed what these homes looked like when they moved out. The one tenant he had who was not section 8 actually vacuumed on their way out the door. His section 8 tenants always left the home in poor condition. His properties were brand-new in 2004 but they looked like war zones on the inside. Always.

4. Vendors. Jack doesn't manage my homes. He helps me find new ones (when I am in the market). My electrician gets paid on time. I trust Carolsue to handle my chores--and she gets paid for her time. One time I called a locksmith for Mr. Jordan so I could get into his property. Mr. Jordan was supposed to call over his credit card information but "forgot." The locksmith began calling me for payment. This went on for weeks, with me finally threatening to quit helping Mr. Jordan until he paid his bills. Miraculously the locksmith got paid right after we got off the phone.

5. Neither Mr. Jordan or I are against property management. However, the property manager he used called me one day, completely exasperated wanting to know how I tolerated this guy. She didn't believe me when I told her I found him comical. But, I did. She fired him. Then he fired her. Then he hired another who fired Mr. Jordan as well. Then Mr. Jordan called me begging for me to take over. It turns out, he didn't trust their expertise and didn't want to pay them either.

6. Face time. In the three years I worked with Mr. Jordan I never met him. I may not jet over to Birmingham very often, but I know that showing up once in a while lends to my credibility.

7. Marital bliss. I am not making light of Mr. Jordan's situation, but know he went through two wives in the time I worked with him. Divorces in Southern California can't be cheap, especially when you put your new wife on the deed to the property. Mr. Partner is happily married to a patient woman. I have a patient Marty Sunshine. It makes a difference.

8. Speaking of patience. Mr. Partner, like us, is aware we aren't getting our money back any time soon. I firmly believe Mr. Jordan treated his real estate endeavor like he was day trading.

9. The last resort. I don't know what happened to Mr. Jordan and his homes. Maybe he let them go for other reasons. Maybe his heath was in jeopardy. Maybe he needed to liquidate. Maybe he was looking for a new hobby. Maybe he just gave up. Though we make our fair share of blunders, we aren't willing to look at any other alternative other than success. Failure to us is foreclosure. Therefore, I am going to plod forward. No matter what. I have felt financially vulnerable for quite a while. However, I have refused to think of what failure might look like. It isn't in the picture.

In no way do I think I am better than Mr. Jordan. A lot of what has gone right for us is because of dumb luck. But I also think one of the reasons we move forward is that we are willing to readjust when things aren't going right. We had a plan to sell our properties after three years and make a tidy profit. When the real estate market didn't agree with us we adjusted our plan to make what we had work. Or at least not fail. Sometimes not failing is success as well.

Postscript: After I wrote this, I saw that Happy Camper posted the following. I thought it was fitting (and thanks again Happy for being my source of wisdom).

The fight to the finish spirit is the one ... characteristic we must possess if we are to face the future as finishers. - Thoreau