All Forum Posts by: Coty B Lunn

 Thanks so much!

Good Morning!

I have a couple of people I can confidentially recommend as contractors!

Exterior of homes:

Penn York Construction 

Kyle Ferraro 

607-644-6927

Interior of homes:

Usta Construction Corp.

Jimmy Ozturk 

917-674-9043

I have worked with both of them many times and both have very high quality work.

The terms "buy and hold" and "cash flow" are often used in real estate to describe different investment strategies. Here's a breakdown of the key differences between a "buy and hold" real estate market and a "cash flow" real estate market:

1. Buy and Hold Real Estate Market:
   • Investment Strategy: The buy and hold strategy involves acquiring real estate with the intention of holding onto it for an extended period, regardless of short-term market fluctuations.
   • Focus on Appreciation: Investors following a buy and hold strategy typically anticipate that the property's value will appreciate over time. They may aim to benefit from long-term capital gains.
   • Rental Income as Secondary: While rental income is still a consideration in a buy and hold strategy, it might not be the primary focus. Investors are often more concerned with the property's overall appreciation potential.
   • Market Selection: Buy and hold investors might target markets with strong potential for property value appreciation over time, even if the immediate cash flow is not as high.
2. Cash Flow Real Estate Market:
   • Investment Strategy: The cash flow strategy prioritizes generating positive cash flow from rental income. Investors aim to have the rental income exceed the property's expenses, providing a steady stream of income.
   • Focus on Immediate Returns: Cash flow investors are more concerned with the property's ability to generate income in the short term. They may be less reliant on property appreciation for profit.
   • Market Selection: Cash flow real estate investors often target markets where the rental yield is high compared to property prices. This may lead them to choose areas with a strong demand for rental properties and a favorable rental market.

     Binghamton, NY - Considered as a cash flowing market, our properties tend not to appreciate as much as other areas or states, however the cash flow received from the properties is what many investors prefer.  Instead of the appreciation, you can make a return on your investment each year instead of waiting many years to sell for a large sum.

In summary, the primary distinction lies in the investment goals and time horizons. Buy and hold investors are typically more focused on long-term appreciation, while cash flow investors prioritize generating income in the short term. It's worth noting that these strategies are not mutually exclusive, and some investors may incorporate elements of both, depending on their financial goals and risk tolerance. Additionally, market conditions and property selection play crucial roles in the success of either strategy.

There are several ways to buy an investment property, each with its own advantages and considerations. Here are some common methods:

1. Traditional Purchase:
   • Cash: Buying a property outright with cash provides a quick and straightforward transaction. This method eliminates the need for a mortgage and allows for a faster closing process.
   • Mortgage Financing: Most investors use a mortgage to finance their property purchases. This involves making a down payment. For a conventional loan, you will need to put at least 3% of the purchase price down if living in the residence. This loan may or may not include extra fees for closing costs, depending on the lender you choose. If purchasing a property strictly as an investment, you will need to put a minimum of 10% down for 1-4 family residences depending on the bank you use. Some banks will do 10% down and no private mortgage insurance (PMI). Not all lenders are created equal and choosing the right one can make or break a deal completely!
2. Creative Financing:
   • Seller Financing: In some cases, sellers may be willing to finance part or all of the purchase. The buyer makes payments directly to the seller instead of a traditional lender.
   • Subject-To Financing: This involves taking over the existing mortgage payments on the property, often without formally assuming the loan. It requires negotiating with the seller and may involve a higher level of risk.
3. Real Estate Partnerships:
   • Joint Ventures: Investors can partner with others to pool resources and share responsibilities. This can be beneficial for those with limited capital or expertise.
   • Limited Partnerships (LPs): In a LP, one partner has a more active role (the general partner) while others contribute capital as limited partners.
4. Seller Negotiation Strategies:
   • Discounted Purchase: Negotiating a lower purchase price based on factors like property condition, market conditions, or the seller's motivation.
   • Lease Options: Renting a property with an option to buy later. This allows the investor to control the property without an immediate purchase.
5. Government Programs:
   • FHA Loans: These loans, insured by the Federal Housing Administration, are popular among first-time homebuyers and can be used for investment properties with certain restrictions.  Great for someone looking to live in one apartment and rent out the others as it is only 3.5% of the purchase price as a down payment and often times closing costs can be rolled into the loan.
   • VA Loans: Veterans and active-duty military personnel may use VA loans to purchase investment properties. Great for veterans, because they can often time finance 100% of the purchase price on 1-4 families and even use seller concessions to pay for closing costs.
6. Wholesaling:
   • **Wholesaling involves contracting to buy a property and then selling the contract to another buyer before the closing. It requires finding deeply discounted properties and an investor willing to purchase the contract.
7. Real Estate Crowdfunding:
   • Online platforms: Investors can pool their funds with others to invest in larger real estate projects. This option provides an opportunity for diversification with smaller capital contributions.
8. Hard Money Loans:
   • Short-term financing: Hard money lenders provide loans based on the property's value rather than the borrower's creditworthiness. These loans typically have higher interest rates and shorter terms.

Each method comes with its own set of risks and benefits. The choice of how to buy an investment property depends on factors such as the investor's financial situation, risk tolerance, and investment goals. It's crucial to conduct thorough research and seek advice from real estate professionals or financial advisors before making a decision.

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Endicott.

Purchase price: $94,000
Cash invested: $5,000

House hacking at its finest! This was my 2nd investment property, a 3 family residence! This one features a single family home which I live and two apartments above an oversized, long 2 car garage. The two apartments are one-bedrooms each, but cover the mortgage, taxes and insurance.

EDIT: Moved into another home and now renting the unit I was living in for $1,500/month. Renting for a total of $2,950/month between the 3 units. Now Profiting $2,115/month after mortgage, taxes and insurance!

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Endicott.

Purchase price: $94,000
Cash invested: $5,000

House hacking at its finest! This was my second investment property - a 3 family residence! This one features a single family home - in which I live and two apartments above an oversized, long 2 car garage. The two apartments are one-bedrooms each, but cover the mortgage, taxes and insurance. On top of that, they pay for my utilities each month in full with a small cash flow at the end! What is better than that?

EDIT: Moved into another home and now renting the unit I was living in for $1,500/month. Renting for a total of $2,950/month between the 3 units. Now Profiting $2,115/month after mortgage, taxes and insurance!

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Endicott.

Purchase price: $94,000
Cash invested: $5,000

House hacking at its finest! This was my second investment property - a 3 family residence! This one features a single family home - in which I live and two apartments above an oversized, long 2 car garage. The two apartments are one-bedrooms each, but cover the mortgage, taxes and insurance. What is better than that?

EDIT: Moved into another home and now renting the unit I was living in for $1,500/month. Renting for a total of $2,950/month between the 3 units.

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Endicott.

Purchase price: $94,000
Cash invested: $5,000

House hacking at its finest! This was my second investment property - a 3 family residence! This one features a single family home - in which I live and two apartments above an oversized, long 2 car garage. The two apartments are one-bedrooms each, but cover the mortgage, taxes and insurance. On top of that, they pay for my utilities each month in full with a small cash flow at the end! What is better than that?

EDIT: Moved into another home and now renting the unit I was living in for $1,500/month. Renting for a total of $2,950/month between the 3 units.

Investment Info:

Small multi-family (2-4 units) other investment.

Purchase price: $118,000
Cash invested: $4,130

Did this as a house hack with my girlfriend. Moved out of the house I was already house hacking and moved into her 3 family house which was an upgrade with a 3.5% down FHA loan. This house pays for itself and will be more profitable once rents are raised. This allowed me to rent the space I was living in for $1,500/month.

What made you interested in investing in this type of deal?

Upgrading living space.

How did you find this deal and how did you negotiate it?

Found on the MLS. Got $6,000 back during inspections.

How did you finance this deal?

FHA Loan

How did you add value to the deal?

Slowly raising rents to market rents.

Hello, 

I would recommend for you to take a look in the Binghamton, NY market.  You will be able to find that our cap rates normally start at 10% and go up from there.  It's not unheard of to get 15% returns or higher either.