All Forum Posts by: Christopher Stanis

Hey BP! I’m looking at a 3 family in Binghamton NY. My biggest unknown factor is that the house has been flagged by codes/social service as having lead paint. The city discovered it on inspection of a child’s home and required that unit vacated. Does anyone know what NYS requires pertaining to lead paint in apartments? As a property owner would the home pass inspection if I were to encapsulate the material in question? (Ie- either repainting or covering with quarter inch Sheetrock?) i’d also considering removing and replacing old windows/doors. Any experience with this is greatly appreciated!

Hey Jake- You may have more options the only wholesale. You could buy property with seller financing- where the seller acts as the bank, and no lending institution is involved. In such a case, downpayment and terms (years, interest, monthly payment) are all negotiable. I’ve used this strategy multiple times to buy property with no money out of pocket. Regarding your business plan- I highly recommend listening to The BP Podcast 108- Grant Cardone’s discussion on goals made a big difference for me. This being said- a few suggestions I have: write your goals down every single day. And remind yourself to keep an eye out for opportunities when you do. You’ll see a lot more. Next thing- in any area of life, there are a half dozen things that make all the difference. Identify those for your business. Example blueprint: 1. Goal: double my income from my job by wholesaling and investing in all my available hours. 2. Why? : this is your motivations for what gets you going- what would make you keep trying even when you’re struggling? 3. List of 1/2 Dozen daily/weekly things to be doing to be successful 3.A. Use 5 second rule to take immediate action when I think of something I should do (for more info- YouTube Mel Robbins 5 second rule) 3.B. Send out marketing for offmarket deals (Craigslist, bandit signs, direct mail, business cards in public places) 3.C. Physically go to properties to evaluate - for both your off-market or ones through the MLS. 3.D. Analyze the #’s and make offers 3.E. Property under contract= market the crap out of it (Facebook, Craigslist, BP, local REI Groups,etc) 3.F. Close on contract with buyer/seller and get paid. Repeat. Especially 3A-3E. On your list, write how many times per week you should be doing each of 3B-3E. Then triple this amount, and set it as your goal. Track it, and hold yourself accountable for doing the level of activity you set out to do. You can’t control who accepts your offers, but you can control how many you make. Focus on what you can control, and shove all of your attention into doing the things under your control. This was a lengthy post- I hope it helps. Good luck

Hey Ralph, My answer as with most things in RE is- it depends. If you’re looking for cash flow, then I would definitely turn it into a multi family. Whether it would be 2 equal sized units, or one larger than the other should be determined by the total rents that could come in. Go with the one that gives a higher number, and see if you can make an informed decision about what units are in demand in your area. There are reasons you might want to consider keeping it as a single family though. Most of these deal with your exit strategy. Are you thinking of selling within a few years? If so, you may find that it’s easier selling on the market or as a lease to own. In short- ask whether cash flow or exit strategy is most important, and let that guide your decision making.

@dulce beltron If you're only planning on a short term seller finance/carry-back, there are several other options that may make sense. You could ask for interest only payments for the 6 months. 6% interest on 100k is $500 per month. Another option could be to do the purchase as a land contract aka article of agreement. Your state may have a different name for it. In this case, the deed title would stay in the seller's name until you refinance. In NY and PA, we have a transfer tax that can occur when a deed is transferred. Land contract may not trigger that tax. The benefit you would describe to seller, is that it's better for them in the event they had to foreclose. It's reasonable if the seller asks you for some down payment (I rarely put down more than 5-10%). And you may want to start connecting with hard or private money for rehab loans before getting to the closing table and starting then! Good luck

Geoffrey Schnake and Alexander Felice , those are both pretty horrible

Hey BP! What's the grossest or weirdest thing you've found after a tenant moved out? I'll go first: we had a tenant who was evicted and kindly left us baggies of human excrement tied to the door knobs. Extremely classy :) What's your story?

HI @Matthew Steslow.

Welcome to Bigger Pockets, and the Real estate investing world. I saw you're from the Williamsport area, which is where many of my properties are. 

My take is that it's important to clearly define what your goals are. Which would be more important to you- to have an extra $500/ month of cash flow, or an extra $20,000 in the bank in 6 months? That simple question has helped me focus on whether it's more important for me to be flipping or buying rentals. 

After you decide which of those two, what do you want to have or be in 5 years from now? Bigger picture outcome side. Now work backward from that point and ask yourself- what has to happen and who do I have to become to get to that point. 

Let's say for instance- your goal is to make $100k/year and be at home more often. It might be easier to do this in  Williamsport through doing 5 flips a year. If on the the other hand, you say, "I want to be a networth millionaire" then you'd be better off owning and keeping the property. 

After you figure out those questions, a few basics I found were important getting started: 

1. Know how to run your numbers. What is the value of the property fixed up? How do you run a max allowable offer? What about cash flow and CAP rate in rentals? (There are plenty of articles on figuring out the math.)

2. Where will you get the money to purchase it from? My first properties were bought with a mix of money borrowed from my parents and on credit cards. Hey, everyone has to start somewhere. 

3. What's your long term plan for the property? What if your first plan doesn't work, do you have a second exit strategy. Always look at the worst case scenario. If everything possible goes wrong, can you still make money? If the answer is yes, buy it. If the answer is no, or you're not sure, then consider walking away, or putting in a lower offer. 

4. Finally, just take action. See an ad on craigslist or zillow? Call them and make an apt to see it. Meet someone who has some great connections you're looking for? Make a time to grab coffee with them. You get the idea. If you focus your attention on taking the action you need to do to move ahead, then you should be in great shape. 

Good luck, and have fun. 

Hey @Mark Scarola I don't see Williamsport come up in the forums that often. I can refer you to a commercial agent if you work on any bigger projects. Do you only have the one house in Williamsport? Are you looking at any other projects in the area?  If you are, lets  connect! 

Jump in. It's more fun. Add on who you need to as you get to that point. If you spend months trying to develop and cultivate a team without going out and making offers, etc you'll probably lose a lot of momentum and may never get started. You don't need a team to call people with property posted on Craigslist, for instance. From personal experience, I went and found the people as the specific need came up. 

The Order of people that I've found I had to bring on after getting my first property under contract was: 

1- funding source (parents and credit cards for first deal)     2-  contractor to help estimate rehab costs (initially, this was my business partner with construction experience)    3- attorney to close the deal and do title work,    4- commercial insurance agent.  

since then, we've grown, and hired our first full time employees - maintenance and administrative staff for the rental business. An accountant as we needed to file taxes. It wasn't until my 4th deal, when I was selling a rehab property that I needed to find a good realtor.  If you spend your time focusing on the things that will generate the greatest immediate income, that will guide you well for deciding when and what professionals to bring on!

good luck!

Hey BP!

I'm looking at buying a SF Hud Foreclosure House. The Property is on city water supply, and has a private septic system. Utilities are off. 

Is there anyway for me to test the septic system for the house before closing? I have no idea on the condition of it, and it could have a big impact on my profit. When you sell the house, given that it will have been vacant for an extended period of time, is there anything I should be aware regarding testing and requirements for the septic system? Also- has anyone had luck in having HUD turn on utilities prior to closing?

Thanks!