All Forum Posts by: Alex Cotter

Pro baseball player...thats really cool!  The only sport I watch is the Tour De France...so no major baseball insight here. A couple questions...

- Are there alot of under 25 single Yankees player in Tampa?

- Is there a new class each year?

- Is this new class struggling with what to do with real estate in Tampa? Could you think of a solution?

- Do you think folks in your position want to live with random roommates? Honestly, do you need that stress when you need to focus on the upcoming practice? Also, what if they record you doing something stupid...and blackmail you the future when you are a superstar celebrity...tons of problems.

Here is what I think you need to do: You need a Baseball house. A decent house with all the amenities that a pro baseballer needs. 3-4 roommates FROM WITHIN THE YANKEES ORGANIZATION OR OTHER TEAMS (OR PRO ALTHETES ONLY). Pool, hot tub, batting cage, a separate party area. Do you see what I am saying? Makes sense. A place for baseballers to chill after a hard workout or throwdown a dope party.

So we are clear, the batting cage will need a keg-o-rator and sound system integrated.

If average rents are like $1000, then charge $1200...throw parties for word of mouth. If I were a new baseballer and I knew there was a sick baseball house...I would just pay the extra, and not give it an extra thought.

Great post!

Hello all,

Is there a market for 30-60 day closing advance loans targeted to house flippers? I am interested in lending in this area. This would be similar to a RE Agent Commission advance or a payday loan.

Thanks!

Alex 

Congrats on joining the workforce...

"a standard 60% of the first 6%" - this is higher than the norm, great!

"my primary path to financial freedom" - hopefully, good luck.

 "I wish that I had access to this money for investments in real estate" - you do, you can borrow up the 50% the amount of your 401K, no questions asked. The limit is 50K. The rate is low, something like libor +1% , however the loan is collateralized by moving market positions to cash and therefore you are missing out on the average 7% market returns., so the overall rate is closer to 8-9%, so its a tradeoff of opportunity cost versus convenience. 

The second way you can have access to this money is by using it to collateralize other loans, especially commercial loans. This way you might pay a higher initial rate versus the 401K loan, but you don't have the missed market gains, so generally better.  

"To those who have access to such 401k plans, do you contribute?" - $38K dual income family going on about 8 years. If you were to look at the total pot, about 40% of the value is personal contributions and 60% is market growth and company contributions. So I like that. 

" I have heard that one can invest in real estate through IRAs, but still I would like access to my properties' positive cash flows and equity gains earlier in life." -Yep, SDIRA, google it...its doesn't apply to you.

Hello,

I am based near NYC. I have been looking at Evansville at a very high level.

Here is what I am observing in the data:

1) Evansville has low volatility in housing prices, some sections still under 2008 highs.

2) There was a recent downturn starting around in Jan 2016

3) Some new business moving to the area, Hyatt Hotel and the Tropicana plant is opening in 2017 and a few other smaller revitalization items.

4) WTF? Blight program, getting federal funds to remove 160 houses? Also, 20 opioid related deaths in 2016, a new high (no pun intended).

I am about 10% through my analysis, but I was wondering if anyone local to the area had observations or could maybe suggest additional points of inquiry.

Let me know, thanks!

Alex

Originally posted by @Bill Gulley:

I'd begin by seeking the broker-owner of the of the brokerage that lists and sells the greatest number of luxury homes. The broker owner can cut the best deal as to commissions. 

It would not surprise me if that broker had a partnership arrangement with a luxury home builder, maybe more than one. 

Who is going to pay for the tear down?

Simply from a building code point, a rehab will be easier than new construction, but your list of contracts might be much shorter and total rehabs compared to new construction will take longer costing you more in labor and contractor's fees, I'd bet on that. Consider it both ways with the cost of the tear down. 

The age of the house is a big factor as to hazardous materials, asbestos and lead remediation means much higher costs of a tear down.

If a contractor has no skin in the game, I'd bet too that the project will take even longer.

And, what is a 100% rehab, are you saying tear it all down leaving a wall to call it a rehab?

What do you have to contribute to a JV other than the property? Homeowner JV's are usually with contractors or investors short on cash or only getting in on the improvement side, they have to have some motivation as well. Why would a luxury home builder or upper end broker want to partner beyond the current value of the property?

Most likely, they will make (or get) an offer and move you out of the way, IMO. I would because the homeowner doesn't add value past subordinating the lot. They can do that at an agreed price and close prior to their sale sticking you with holding costs. Title isn't really that great of a factor for a licensed contractor, they have the option of using liens that can take priority over mortgage liens, the risk is built into their pricing to enforce the contract and secure their money. The value the owner provides is the buyer's/contractor's cost of money.

You could seller finance to a contractor and subordinate your loan to a construction lender, hope you have faith in the contractor taking a back seat to a larger first mortgage, or you have assets to cover yourself.

Also, as to lots in a higher end subdivision or area, the neighbors are prime prospects, some people are funny about what gets built next door or who moves in, so if they have the money and don't want to move, they might just buy it.

I'm considering doing that with one of my properties, just buy the place next door, it's why I haven't rehabbed it yet.

Don't forget word of mouth works pretty well in luxury sales. 

Post some pics, get better valuations, holding time in that price range (?). If you're dried in, I don't see weather being a big issue. :)

 You ask some important questions that I don't have answers to. I appreciate your bringing them up.

You mentioned that neighbors can be funny and will sometimes buy the property. This has happened a couple times before. There is a good story about a really low key guy who lived down the street. He noticed the neighbor's "cottage" had someone in a suit walking around it. He asked if he was there to sell the property. The real estate agent said they were going to list for X Million. They started talking and worked out a deal right there in the front yard. Later this guy bought the other neighbors house too. I have driven by, they houses are empty (but well maintained)...he never tore them down or did anything with them.   

Originally posted by @Devon Garbus:

Also- Here in Florida the highest Land-ARV I would be able to get you is roughly 33%. Sounds like you are trying to do 50%, which I doubt is reasonable. Unless 5m homes are selling like hotcakes?

I am sorry but I don't understand what you are saying. "Land-ARV" (I tried to look it up before asking). If I owned land valued at $10, I would need to have a $20 house on that property to have a 33% Land-ARV?

If I understand correctly what you are saying above, the ratio of value of land to building is just alot different out here. My numbers above are based on the tax assessment, which isn't perfect but doesn't materially steer the scope of the conversation. 1/2 acre lots in prime areas are in the 400-600K range (maybe 1.5-3M on the water), many of these have 1930's houses on them that might appraise at $200K. 

All, That's a good idea about listing it on Craigslist, to get a pulse. Are you familiar with Wilson Point in Norwalk? It seems that a JV with a builder is not exactly in agreement, but probably a good exercise to at least discuss. Land values being 20-25% of the property value is not the norm in this area. Prices are driven by the mix of water, proximity to NYC and general quality of life versus other NYC suburbs. There is some silly hedge fund /Wall Street money in the area that drives prices up. Sorry for the bulk response, I am on a mobile until my internet installation happens. I'll respond directly to people tomorrow.

Hello,

I am selling a property, that is a either a tear down or 100% renovation in a high end neighborhood. Here are the general stats:

 - Land Value: $1.3M

 - Property value: $250k

 - SQ Footage: 3500

 - General price per square footage in the neighborhood: ~$700

 - This house at like new condition rough value: 3500*750 = $2.6M

I am considering working with an agent. Its August and well past the spring market. We are in the Northeast and winter is an issue for construction.

To maximize the sales price of this house, we could a) work with an agent or b) sell to a builder. Seller financing is an option. I personally feel too much money is left behind with an agent and time of year.

What would you do in my situation? Thanks!

Alex

Just passing this along, almost a 2% deal in Bridgeport, CT. 

http://newyork.craigslist.org/fct/reo/4992197433.h...

I am not buying right now...hope this is helpful to someone