All Forum Posts by: Alan Asriants

 Honestly, your points on what to look out for is like trying to go into a war wearing as much bullet proof armor thinking that will protect you. Sure to some degree it will, but your systems seem to be entirely based on horrible what ifs. If you bought in a decent area and had decent tenants, you wouldn't have to worry about this and over the course of 10+ years you would have accumulated a lot more wealth and your health. 

When you're finally done running a business and dealing with this issues, you should try investing in real estate and benefiting from appreciation and PASSIVE income.

 Love hearing the Guaranteed payment pitch too. Except they forget to mention that only the gov portion is guaranteed. And many times the tenant can have a higher portion

 Agreed here. I have found very nice older couple on Section 8, but those candidates are very far and few in between. 99% are the later that you described, at least in my area.

 Class of area determines class of tenant, they are directly proportional. Class A tenant with 800 credit score, perfect landlord references, and a 6 figure income will not live in a Class D area. 

 Exactly, most don't survive long because the headache and the actual returns burns them.

it's possible that people consider Class C and D differently and in the Midwest where the avg home costs 100k, buying an 80k home really isnt a horrible area. But in the NE, that is a risky asset

 By no means do i think that you can't generate "success"

I'm very sure you could churn out good returns. But operating in these classes in not really investing its more like starting up a business. Businesses provide great cash flow but are always tough to sell and usually valuations are low. Meaning most dont sell, they just retire. 

The concept is similar here. Yes you get more cash flow, but you're usually investing way more of your time. My understanding of investment and passive income is to create a model that allows you to invest your money into a safe asset, that generates some kind of income, with little to no effort and it grows in great value overtime. 

This is what investing is about. Your money works for you, not you working for money.

Sure, you need to make sure your property is in great shape, you find the right tenants, etc.

I have managed 20+ units in Class A/B areas and 20+ units in Class C/D areas and I have spent more time on the Class C/D area properties in 3 days than I did on the Class A/B areas in one month.

Usually calls related to class A/B were once in a while: water heater replacement, minor water leaks after very heavy rain storm, only really "emergency" situations. 

For the other class of RE, it was chasing down rent, arguing about who is responsible for throwing down things into a toilet that shouldn't be there, water bill delinquencies, disputing damages that were clearly tenants fault etc. And low and behold after some time, the owners stopped caring about fixing things because all of these issues screwed up their returns. Then things start to spiral downhill. Deferred maintenance, angry phone calls, and so on. Trust me, if I was the owner, I wouldnt want to keep fixing a problem that wasn't mine. And "duct tape" fixing like Lucas mentions don't last long and eat your cash flow.

So its not that you can't have success its that you put yourself in a different position. One is starting up a tough business and the other is investing. most people don't keep that business model open for long. As you can see Mark is repositioning. 

My business is real estate sales, I invest in real estate. 

credit is def relevant... avg scores in lower tier areas will be lower, that is just a fact. 

No way, they are actually planning on hiking up the already high transfer tax? City does nothing good for homeowners and they want more money. WE need a DOGE in the city. bunch of people pushing problems from one department to another. Tried to get illegal dumping issue resolved on my property only to get hung up on on my zoom meeting. I was charged a fee for reporting illegal dumping - I was told if I report it, I have to pay. Yet in the meeting they told me to report it to the exact people that I did. No ones knows whats going on in other departments. When I asked nicely who I can speak to about this issue I was yelled at and told that they don't handle this. 

Hey Geoff, I can send you a builder who might be able to answer your question and give you a bid. 

You can do a fractional percentage - say 3 people live in main unit and 1 person lives in ADU.

Main unit pays 3/4 of bill and adu pays 1/4

That being said for one utility like water that might be ok, but I think not having separate utilities opens up a can of worms. 

You can always bake it into the rent if you believe you can accurately estimate those expense. Thats what a lot of landlords in older apartment buildings do. 

Separating is the best bet and might not be that expensive since you have a small unit. Throw another electric meter, change everything to electric, install heatpump or ductless systems. disconnect gas and run electric. You will likely need to update to 200amp. This is what I would do. 

Likely a home equity loan might be better since you dont have to worry about paying off the equity quickly and arent subject to higher rates and random rate changes which can destroy your cash flow.

Long term loans are best for long term projects

HELOC and lines of credit are good for get in and get out situations.

Its possible you can use a heloc to build the property as that can be cheaper for you and then you can do a cash out refi to pay off the heloc since your home is fully paid off. That might be cheaper and better bet than home equity loan. YOu need to reach out to local bank and see difference in rate and terms.

Also you need to know that investing 100k in an adu will not always increase your value by 100k. (Example)

if you need a solid contractor in the area for a bid, reach out anytime. my partner is a solid builder