All Forum Posts by: Billy Archer

@Jody Sperling Thanks for sharing! So the key is to find a screaming deal and have a network of people that could be willing to JV with you? Did you JV with someone early on to get your feet wet with real estate investing?

@Steven Foster Wilson I appreciate you sharing. Would you mind expanding your first deal a bit? How did you achieve that success? Did you BRRRR and pull out the equity that you forced? I imagine a successful deal your first deal is like putting lightning in your veins.

As I learn more about creative financing and other ways to fund a deal, I admit I’m lost in how one broaches this topic with someone. If you were able to start your journey without your own money , I’d appreciate it if you could explain how you got there. I have so many questions to help me get over my own mental block on the topic. I feel if I can find a way to feel less awkward about it, I can get over the mountain and actually begin investing much quicker.

@Llewelyn A. Thanks for the answer.  Do you do this every time you look at a deal?  I imagine that is a lot of research just to check the viability of it.  I agree in principle to crunch all numbers once you're ready to make an offer, but I thought there some kind of metric that can help you see if the deal is worthy of dissecting.  

If you couldn't accurately gauge the cost of each of these capital expenditures in that market, would you run them all by your trusted contractor/local property manager?

@Jeff Copeland thanks, this is golden.

Do you have a rule of thumb when you’re searching for buy and hold deals? Are you setting aside 10% of prospective rental income for capex and 10% for repairs regardless, or fine tuning it based on factors like the age of the house/equipment?

I tend to err on the side of caution so I’d like to overshoot my potential budget expenses, but I don’t know if 10% for each is prudent.

I had a meeting with a BP member last week.  He asked me why I haven't considered other people's money to start my investing journey (I am currently sidelined from the first step of my investing journey since I am saving for an engagement ring).  My concern is why would anyone give a newbie $10K-25K for a downpayment and rehab that hasn't demonstrated their own real estate investing abilities in practice?  By considering the question he asked, I must admit there is a sense of the fear of the unknown here that prevents me from considering it whole-heartedly.  If I can find someone like a family member or friend to loan that amount of money to me, it would be exciting yet terrifying to get that money from them, yet there's a chance they'll never see that money again if all fails.  Whereas if I screw up the first deal, at least I'm the only one that stays broke.  

How do you reconcile this?  Is it reconcilable?  Do you keep your head down and hustle/grind your way to your down payment, or do you desensitize yourself to the fear and seek private lending regardless?

@Jesse Daconta I would consider all opportunities when I have the capital. At this time the notion of doing it is unattainable since I’m still saving for a ring, let alone my first rental. For that reason I haven’t even researched that path yet. I like the idea of scaling relatively quickly but I imagine a deal like that requires the funds to join. Is my impression of limited partnerships correct?

@Adam Cherko Thanks for the welcome and your time last week!  As you can see I took some of your suggestions already. Looking forward to checking the project out.

Hello ladies and gentlemen of BP, I'm Billy.  I come from New Rochelle, NY in the high taxlands of Westchester County, New York, directly north of the Bronx.  For the past 12 and a half years I am the (sole) property manager of 6 owner-occupied multifamily Cooperative and Condominium buildings located in New Rochelle, White Plains, Hartsdale and Scarsdale (approximately 328 apartments total). I manage the operations of approximately $57.5M of residential real estate, but I own nothing.  As I went ring shopping with my longtime girlfriend 6 months ago, I realized that I need to blaze my own path forward instead of burning in place.  3 or 4 months ago, I found BP on YouTube and I began to consume as much knowledge as I can about rental real estate to actively change my mindset.  I have listened to well over 100 hours of podcasts etc, and I've begun networking with people in the area to gather as much knowledge/know-how/kicks in the behind as I can.  Little by little I'm dissipating the fog that surrounds the playing field and I'm starting to envision a path forward.

My first goal in this journey is to buy a screaming deal multifamily house (4plex ideally) at a low entry point (think midwest) where I can build equity and start to build my cash flow machine.  Aiming for $200/door as a rough guide.  My second goal would be to have enough cash flow to focus full time on this plan.  Third goal?  I don't want to get ahead of myself, but perhaps apartment building ownership? 

I am super eager to hear from others that hear themselves in this intro.  I have just come to realize that I can start my own rental empire with good mentorship and someone that can help me direct my fire.

Coops that allow subletting only allow a certain percentage (usually less than 10%) of units to be sublet.  Some Coops don't allow subletting at all.  Others allow it only with a proven hardship.  I believe the lenders refuse to lend to Coops with greater than 10% of sublets in occupancy.

From a traditional standpoint, I hate the idea of Coops as an investment.  Maintenance fees suck, and I absolutely hate the idea of a group of people meeting every month to rule their land.  Unlike a fortune 500 company that is run by a Board of experts, all you need in a Coop is a buy-in.  So, you can have people with no sense of business on a Board just because they like to be in everyone's personal business.  

If, however, you can find a way to bypass a Board where their rules are limited on your actions, you stack the odds a little more in your favor.  If you can legally rent without them approving the renter or the idea of renting, you are doing so around an environment set forth with services like live-in Superintendent, exterior and common area maintenance, heat, water, sewer and taxes covered in your maintenance payments. Sure you're going to pay $600-$1000+ a month in upkeep, but it's like keeping money aside for capex, repairs and taxes.

I lived in my parents' Coop from 8 to 22 years old growing up, and when I turned 22 I began managing Coop buildings full time.  Having been involved with them my whole life, I am fully dissuaded from ever LIVING in one again, but as I work out my own business plan, I see potential if you can find a way to invest them legally. 

I can't say how hard it is to sell a Coop since I haven't really focused on it.  Since Westchester property taxes were the highest in the US last year, Coops in this area are a more attractive option for first time home buyers or retired or those that don't want to maintain their exterior etc etc.  Therefore I'd like to think they're relatively liquid. According to one of my building's comps in White Plains, what used to sell for $100K-$130K in 1998 now sells for $300K-$325K.  That's nearly a $10K increase in value per year over 22 years.  And at least 1 unit of that size has sold on an average of 1 per year or more.