All Forum Posts by: Andrew Graziano

@Craig S. Thank you for the tips I will absolutely check them out.

@Lee Ripma Thanks for the reassurance!

@Maxwell Dowd this is great advice thank you!

Hi all,

I purchased a 5-unit property last December. The property consists of a farmhouse converted to 4 1-bedroom units and a single-family home on a 5.5-acre lot in a semi-rural suburb of Buffalo, NY. I ran into some issues throughout the process but overall it has been a great learning experience and at this point, it's looking like it will be quite profitable.

As I near the one-year anniversary of this deal, I'd like to reflect on a few hard-learned lessons:

-The renovation was slightly more than anticipated but within reason. The main source of added expense was a contractor stiffing me.

-Finding contractors for a "slightly out-of-market" property can be difficult, no one wants to travel.

-If you get a bad feeling about a contractor, terminate the relationship early and move on. Once you find a great contractor, treat them like gold.

-The wants and needs of semi-rural tenants are significantly different than their urban counterparts.

-A 40-minute commute to your property is more significant than it sounds.

-I will never purchase another single-family again.

As the stabilization process comes to a close, it's now time to start thinking about refinancing. I have vetted a few local/regional banks with varying results. The best bank so far seems to be Upstate Bank, out of Rochester, NY. They are willing to do 80% LTV and have been reasonable with cap rate ranges. Has anyone used them before?

I suppose I'm just looking for a bit of guidance in this part of the process. If you could go back and give your less-experienced self a couple of tips, what would they be?

Thanks for the input guys. I should clarify, Ellis,  the $400 figure is including the mortgage and all expenses. I also see that I was mistaken about the rent and it might be between $700-750. At a net of $300-$350, the deal is very skinny indeed but I cant find anything decent because the inventory is so low.  @Ellis San Jose

This property is in Black Rock. I will keep looking absolutely. I would much rather have a multi family but I can't seem to find anything that isn't utterly terrible. This property is relatively turnkey which is what interests me. Also, another point is that I'm in the middle of getting an FHA loan for a personal residence so the only way I could do these deals is with seller financing.

@Shawn Pappas (won't let me link you above)

The deal:

2 bed 1 bath single (has small office that was previously being marketed as a bedroom). Small cottage. Roof complete tear off in 2014 along with new furnace and hot water tank. No basement or real attic. Class c neighborhood.

Asking price $49k $5k down 6% 12 year amortization owner hold.

After negotiation I've got the seller to verbally agree to $45k purchase price $5k down 6% 30 year amort. 10 year balloon.

That leaves the mortgage payment at $240, all expenses in about $400. No real work to be done except paint and some yard work.

I spoke to a tenant next door who pays $600 for a similar apartment with larger rooms but it worse shape.

Expecting to fetch $650 for this unit.

I'm being priced out of everywhere else in buffalo with such low inventory and skyrocketing prices. I expect the property and rents to increase The seller is 76 years old and is liquidating his portfolio. The way I see it my risk is very low as the mechanicals are all there and my largest risk is bad tenants. I can afford the carrying costs to be very stringent with my tenant screening.

This would be my first rental. I've done a flip in a nearby suburb and also managed some other of my family's rentals.

My question is about the spread. Is it too thin? Would you do this deal? If I don't take this I'm afraid I'll keep analyzing deals and not jump in.

The seller is out of town so I have until Monday to decided to go to contract or not. 

Thanks for the input BP. 

The deal: 2 bed 1 bath single (has small office that was previously being marketed as a bedroom). Small cottage. Roof complete tear off in 2014 along with furnace and hot water tank. No basement or real attic. Class c neighborhood. Asking price $49k $5k down 6% 12 year amortization owner hold. After negotiation I've got the seller to verbally agree to $45k purchase price $5k down 6% 30 year amort. 10 year balloon. That leaves the mortgage payment at $240, all expenses in about $400. No real work to be done except paint and some yard work. I spoke to a tenant next door who pays $600 for a similar apartment with larger rooms but it worse shape. Expecting to fetch $650 for this unit. I'm being priced out of everywhere else in buffalo with such low inventory and skyrocketing prices. I expect the property and rents to increase The seller is 76 years old and is liquidating his portfolio. The way I see it my risk is very low as the mechanicals are all there and my largest risk is bad tenants. I can afford the carrying costs to be very stringent with my tenant screening. This would be my first rental. I've done a flip in a nearby suburb and also managed some other of my family's rentals. My question is about the spread. Is it too thin? Would you do this deal? If I don't take this I'm afraid I'll keep analyzing deals and not jump in. Thanks for the input BP.

Hi BP,

Are there any note investors on here from Buffalo, NY? I would love the opportunity to pick your brain about your experiences. My late grandfather owned a couple of notes and I now have control over his portfolio. I'm looking to sell the one note that was left in the portfolio and I need more info on how to go about it.

I looked up some of the online exchanges which were pretty sketchy.

Any information is welcomed.

Thanks BP

Hi BP, Are there any note investors in buffalo ny? I'd love to pick your brain. Also might have a note for sale which is why I'm curious about all this. Drop a line if you have any info.

Hi everyone,

Thanks for the input! I'll be reaching out to you folks in the future because the hud process seems a bit tricky. I've done some research on the 88% rule, but I'm curious about the restrictions on how long I would have to live there, when I could buy another primary residence, etc.