Day 24, in the event of this catastrophe fire loss.... 2010-

[jy101]

Day 24, in the event of this catastrophe fire loss.... 2010-07-09 21:44:33

Day 24, in the event of this catastrophe fire loss....

Today, we spend most of the time talking to effected tenants, as they moving out their furniture and other personally belonging.

3pm, we had a meeting with my architect on the blue print, basically we want to convert some of the 2bedroom units into 3bedroom and 1bedroom units. we try to keep exterior the same, mainly to escape the state approval on the building permit.

now, to some of the questions MrsKwok and RE8888 ask below...

1. we have the option of rebuild or not, but since the complex has a mortgage lien, if we decide not to rebuild this building, we must pay the mortgage holder first for a partial release on the mortgage, meaning we not going to get much out of the whole settlement.

2. commercial mortgage is hard to obtain, at least now, for us almost impossible, we not gaining any if we not rebuild.

3. the policy covers 12 month of business income from the date of fire, the insurance company hire an outside CPA firm to audit the lost, we had already summit the 6 month profit and lost state for 2010, and last 2 years financial statements and tax return for their review. I believe their pay out is base on average rentroll and expenses on the whole complex, I will update these later.

4. base on preliminary estimates, we can convert this 8 unit building from 7 two-bedroom, 1 one-bedroom units to 3 three-bedroom, 1 two-bedroom, and 4 one-bedroom units, this will improve out cash flow about 3k a year.

5. we expect after completion, we have a surplus about 65-75k on the rebuild.

6. regarding property tax, the indiana property tax system is base on the market value on March 1 of every year, not the time of buy or sell, meaning if the building is half way done at March 1, you only pay tax base on 50% of property value for that year.