A Landlord Seeks a Solid Foundation
Chicagoan Yan Searcy exudes entrepreneurial zeal. Yan, who is 37 and single, has invested in a carwash and aspires to own an ice-cream franchise on the city’s South Side, where he resides. In 1998, Yan bought a three-flat apartment building, which he still owns. After buying and selling other nearby properties, he acquired a two-unit condo a year ago. Despite living in one of the five units he owns, he breaks even on cash flow. “I’m trying to own the whole block,” quips Yan, who estimates that the real estate is worth $850,000, or $300,000 more than he owes on the mortgages.
Although real estate is his passion, Yan has no thoughts of giving up his day job. He’s a professor of social work at Chicago State University, which provides a 403(b) retirement plan, a pension and other benefits. Yan has about $40,000 in a few stocks and mutual funds, held mostly in retirement accounts.
With little debt except the mortgages, which have favorable fixed rates, Yan’s finances should improve as long as he maintains the properties and keeps the units occupied. But he has two major problems. First, he knows he needs a sizable cash reserve, which he lacks. “In two years or less, I’d like to have $100,000,” he says. Second, with the overwhelming majority of his assets in real estate, Yan’s portfolio is extremely unbalanced.