All Forum Posts by: Cheng Bin Zhang

Hi All!

I've been asked by a family friend to invest in a commercial deal in Bensonhurst Brooklyn, NY that they've already procured. Having almost no experience in this arena, I'd like to tap into the BP community for some guidance.

The 5 year plan is to acquire with a construction loan, develop, lease, and refi. They're asking for $5 million. The team thinks it'll cost just under $2 mil to develop and lease (NNN - 5 year term) out at $2.5/sq/month with a total of 29,600 sqft. which can yield $888,000/year or with a 10% vacancy discounte = ~800k/year. So that leaves a cap of roughly 11.5%.

Is this reasonable?  Are there other metrics that I should consider?  Are there legal considerations since there are quite a few investors already.  Thoughts?

Thanks!

Cheng

@David Uitti - Not sure about the south shore market but up in Boston and Greater Boston Area we do the following:

1. CMA to get a sense of what everyone is paying for

2. Rental analysis (CL is a surprisingly good tool for this, rentometer as well)

3. Cash Flow Analysis ( implement your cutoff/threshold )

Quality of tenant/demand is pretty important - particularly in high cash flow areas so when you're on craigslist, be sure to..... be extra judicious with the tenant profiles.

Hope this was helpful.

Cheers and Happy Thanksgiving Y'all,

Cheng

@Brett Merrill, Welcome to BP!

My girlfriend and I just moved into a duplex in JP from Brookline/Brighton area.  We're currently house hacking near Stony Brook.

I'm a fairly new investor as well but haven't been focusing too much out in Western MA.  Have you had any luck?  Where are you looking?  Worcester/Framingham?

Let's meet up for coffee if you're free.

Best,

Cheng

Hi All,

I'm hearing from multiple sources that a potential economic downturn is likely to take place in the next term.  Everyone has a theory (China's recession, Brexit, cyclical nature of the market, etc.).

I figure this would be a good platform to get some interesting perspectives from a Real Estate Investor's standpoint. 

1. Do you think a potential downturn is likely to happen?  Why do you think so?

2. Are some regions more susceptible than others? Why?

3. What's your strategy?  Wait patiently? Or are there more active strategies to prepare for the downturn?

Thoughts?

Thanks!

Cheng

Hey @John Bernabel, not a fulltime REI but that's the beauty of REI, the flexibility and systems you can put in place to automate it.

Hope all is going well on your end,

Cheng

Hi John!

Welcome to BP Boston.  I'm a fairly new investor as well.  Happy to meet up and chat if you're ever in town. 

Best,

Cheng

@Whitney Zelee - Welcome to BP!  I'm also a young working professional investing in real estate on the side.  Depending on your tolerance for risk, I think there are always opportunities to negotiate with motivated sellers in and around Boston.

Always happy to meet up and chat about Real Estate and connect with like-minded folks so let me know.

Best,

Cheng

@Maureen F. and @Jim Adrian - Thanks for the input!

It was my understanding that an ADU is essentially an "in-law" unit but comes with all the elements of full unit (kitchen, bathroom, bedroom, living room, etc.). Check out this tool kit for Mass ADUs. 

I think framing the permit request as a ADU versus a brand new built reduces additional paperwork? Not sure yet. Would need some legal/architectural advice here.

In regards to the zoning standards, Boston has one of the most non-sensible/obsolete zoning standards in the country.  Zoning laws were put in place in the 1950s I believe and I would say the majority of the existing (100+ year old) houses/buildings are not in compliant (i.e. set backs, FAR, etc.).  Almost every new build needs to go through variance or board of appeal.

The new parcel would certainly not be approved (particularly with the parking requirements) for a stand alone built. 

The other driver for an attached ADU is to sandwich in the external wall plumbing which has been giving me problem the past few winters here. I can use some tips on that end as well. I've just been advising the tenants to leave the faucet dripping. Just recently had unit 1 redone but unit 2 has a fairly new bathroom and it's cost prohibitive to do any major plumbing /bathroom works at the moment...

Hi,

We have an adjacent parcel of unused land next to our duplex. We're planning to add an accessory dwelling unit (ADU) to the existing duplex by merging the two parcels together.

Current zoning would not permit this as of right and would require variance/board of appeals.

Does anyone on the forum have experience with building ADU in the city of Boston and wouldn't mind sharing their experience? I do plan to live in the ADU after it's built. the unused land is currently a huge eye sore for the community and this ADU would provide the financial incentive to move forward with the fencing/landscaping work that's required.

Best,

Cheng

Hi All,

I'd love to meet and network with any wholesalers within the Boston and Greater Boston Area.  I'm looking for a 8-12% annual cash on cash.  Operating expense must include:

1. Insurance

2. RE Taxes

3. 5% market vacancy rate

4. Utilities (Water and other items that owner would be responsible for)

5. 10% Property Management Budget (landscaping and snow removal if not included in HOA)

6. Price Point Between 300k - 700k

Thanks,

Cheng