Monday, August 04, 2008

The Second Report

The first report on the state of Carlton Knight’s Harvey rental properties painted some dismal conditions at the three buildings.

The second report finds that the receiver hired both an architect and a general contractor to inspect the property per a court order. “The basic conclusion from the reports is that the property, while structurally sound is in need of major repairs.”


As if things couldn’t weren’t bad enough for the folks living at the rentals named The Rose (indeed), they also had a little issue with their water pipes and sewers.

More specifically on December 26th, 2007 “two water pipes broke, the sewers backed up and waste was coming up the drains in the utility room in the 15144 building.”

Merry Christmas.

According to the report, the issue was immediately fixed (yuck!) and then the plumbers came back out on January 14, 2008 to complete a more extensive repair. “They noted that the sewer lines were old and some of the lines had extensive debris in them that was affecting the pitch of the sewers.”

I wonder if this is how Mr. Knight is “involved in all aspects of operations.” Letting the sewer lines get so backed up that his former tenants were swimming in shit.

The inspection reports read like a laundry list of repairs. I’ll save you the boring parts and get down to brass tacks.

The construction totals are as follows:

Misc. Exterior Work-----$28,600.00
Interior Work------------$326,500.00
HVAC Repairs--------------$15,000.00 to $20,000.00
Other Capital Repairs--$144,200.00

Yowsa that’s a lot a scratch.

At the time of the report, one tenant had moved out to a nursing home and three tenants vacated their units as of January 31st. So if I’m doing my math correctly that would of put the occupancy rate at 25 units that were unoccupied at the time.

Which would explain the dismal cash situation.

“As of December 7, 2007 the receiver had $6,770.98 in its account. From December 7, 2007 to January 23, 2008 the receiver collected $11,999.00 in rents and paid $17,862.23 in expenses. The case balances as of January 24th, 2008 is $907.75.”

That’s some thin margins to operate and maintain an apartment building.

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