Thanks for posting surveyor.
The properties look nice. It does look like the roof needs attention. I have never been one to wait. It is not worth having it blow off in a big wind and rain storm. Maybe that is not the issue but it does look weak even in the pictures.
I had a few questions:
You said something about the target of equity withdrawals running a surplus. What did you mean. It sounds like you are saying that you took the equity from other rental property that still cash flows after increased encumbrances, or a personal residence that would if you had to put it on the market?
Bugs raised a concern about taking equity from California properties for seed money. I sort of concur. A good rule of thumb is to avoid withdrawals that would put cash flow on the California properties in the red. I am sure you have thought about this, just wanted to put in my .02 on that point.
Are you borrowing fixed or adjustable ? HELOC money?
I know you are, presenting for the board, more or less, a first year scenario. I think it is also important that you have put the probability of inflation(sooner or later) against your debt and the fact that your mortgages are being paid by a third party on your side . Have you crunched out return scenarios using some of those variables over longer periods of time?Cash flow is necessary bu tit is the long term that makes your “hassles” worth it IMO.
On the topic of the quality of enlisted personnel as tenants. First of all I think your units, as nice as they are, are not going to attract officers in droves. Maybe I am wrong. I also think there are more good enlisted people than bad, having been one myself for 6 years I think I am qualified to say that. Renting to military has the huge advantage of you or your property managers ability to appeal to the tenants chain of command if the person is messing up. I had a situation where a guy was subletting up and playing games with money. I told him I would be contacting his captain. Never before has a wallet opened up so fast and a guy turned from a big ass to kiss ass. On the other hand populations on certain types of bases rise and fall dramatically, even the civilian population. I would be concerned about that. I imagine you checked for long term base plans?
I did not see you account for vacancies. Maybe I missed it?
