The House That Jack Bought

Jack, my real estate agent in Birmingham, approached us in 2008 about investing in a few homes together. At the time, it seemed like a reasonable idea. We found a home, bought it with some equity and found a renter. Then we found another tenant. And another. And another. We never found another home.

Last month Jack approached us about selling out his interest in the LLC. Essentially, he was quit-claiming his share of the LLC back to Marty and me. Jack graciously suggested that if he got out we would have "twice the equity." Which is nice and all, but that also leaves us with twice the bills. And, in all fairness, Jack wasn't paying those bills anyway so it isn't as if he was out more than some inconvenience for showing the home and working with a repair person or two. The cash flow position on this property has been so tight that even I am not taking a property management fee for this house.

My feeling is he thinks this home (and subsequently the LLC) is a sinking ship. The Birmingham real estate market is not bouncing back as fast as the Phoenix market. So, I can appreciate his point of view. However, Marty and I wouldn't have made some of the decisions differently if we knew Jack was going to bail. For example, Jack lobbied to put a new heat pump on the home but wanted to do it on credit. Begrudgingly, we finally agreed, and are still paying it off. At the time, I would rather have just paid half and had Jack pay the other half, instead of buying the heat pump on installments. Live and learn.

I am not spewing sour grapes. I happen to like Jack. He tells fascinating stories and has a great business mind. In fact, I have probably communicated with him more in the past month than I have all last year. Much of the talk between us has been about how we enjoy each other's company when I am in town and our mutual interest in writing. I am curious if he will make time to see me next time I show up (which, at this point won't be soon). I guess I will find out later if he meant it or if it was nice words to ease the tension.

Yesterday, Mr. Little, the tenant for this particular home, e-mailed me. There is a leak in the roof. A simple-ish fix that will require a handyman. I asked Mr. Little if he might have an interest in buying the home. He doesn't. In fact, he gave me a 60 day notice instead. Another challenge for Marty and I to take on.

The home is being transitioned to the LLC Marty and I own by ourselves. We are also looking at changing the mortgage, including fixing the heat pump payment that should never have been bought on credit. Or perhaps we can just sell the darn house and take "twice the equity." That would work too.