All Forum Posts by: David Drew

Private lending may also be a good option.  DM me.

Some of us believe that Albany is the bellwether, others do not.  If this passes in NYC things will get a lot worse, but if the eviction moratorium at the state level is the real indication of things to come, and the upstate counties will again pay the price for the and suffer at the hands of Andrew Cuomo, get prepared for a far worse set of circumstances, especially if you're a renter.  There are some real Constitutional issues here but NY does not care.  I'm already pursuing the strategy of avoiding lower income markets and left in the hands of folks who really do not give a crap about quality of service, maintenance and property management, I fear things will get a lot worse for our most exposed, hardest working, hardest struggling community members.         

Any luck finding local REIs in Englewood FL?  I have a lot of rentals in upstate NY and looking to start investing in FL.  Stay there part time, rent short term otherwise.

Hey David.  I'm a buy & hold guy locally.  Lots of market rate, students, flips, wholesales and other passive RE investments too.  Love to chat, call anytime.  Definitely talk to @Mark Liscia, @Stephanie Jacobson and @Gary Kline.  

Thanks for posting.  I love off market deals.  The economics of the deal look ok but I'd be interested in a few more things, given the times.  Is it occupied, and are the tenants paying rent?  How will you manage it?  If you're not local, you'll need a local property manager.  I only manage my own property but I could refer someone.  It's real estate so...the location is important as @Paul McCue noted.  There are no students in Endicott but there are some terrible neighborhoods.  If you haven't already, I'd suggest you go there, then go back at night.   

Hi Joshua.  

Welcome.  I've been investing in BC for the last 4 years.  I'm happy to discuss the advantages and the pitfalls.  Are you focused on Buy & Hold Rent, Wholesaling or Flips?  If rentals, market rate or student rentals?  What position are you in for purchase?  Cash, bank mtg or looking for owner financing?  

If you have some money to put down, owner finance or owner occupy is a great way to get started. If not, how about a HELOC. Wholesaling could also be good and is also a great way to get to know the business and the locals in it.

Regards,

Dave  

@Ademir Zukic I have a lot of rentals in Binghamton, Johnson City and Endicott.  I have made contact directly with 95% of my tenants with relatively good news so far.  Not many of my tenants are out of work, yet.  

For my particular situation, my tenant base happens to be rather diverse.  I'd love to say that I designed it that way with some amazing foresight - but really - it sort of just happened based on the properties and the deals I've encountered.  Nice rentals draw quality tenants and I try to screen them pretty well.  So, 80% are at the top of the low-income bracket and many of them are health care or human services workers.  I have about 10% student rentals, of which, 3 jumped ship early and moved out right after the university went to on-line only for the remainder of the semester.  I have about 10% on either section 8 or DSS.  Out of my 80% who work and pay rent, about 10% of those are high earners or retirees with low risk situations.  What I'm left with is about 70% that could get sick, get put out of work or fall victim to some of the financial distress we're all going to face over this thing.  My level of worry today is lower than it was last week, and here's why.  Action.   

The best thing I think I've done over the last week...I posted announcements on my tenant websites telling tenants not to worry, that they have a place to live with me though this crisis.  I contacted every tenant and offered to help them and I was serious.  I am happy to deliver groceries, medicine, supplies...whatever.  Several tenants took me up on my offers.  I can't tell you how good it made me feel to deliver milk, eggs, water and bread to a woman with 5 kids on oxygen as she was about to walk down to the store.

One tenant let me know his hours at work were cut for the time being.  He offered to pay April rent over the next three weeks and I waived the late fees.  Easy win - and - the right thing to do.  I am more than happy to help people who are proactive and try.

I also had three maintenance issues come up and we made sure to get them fixed the same day or the next day.  The last thing people should have to worry about when they're stuck in their homes all day is whether the oven is going to get fixed.  If it needs fixing, get it done.  How we react in difficult times is what they will remember when it comes time to prioritize their responsibilities to pay the rent.  Just my $.02.  

Finally, I strategized how I might approach situations when, and if, tenants fail to pay the rent in the coming months.  My thoughts are that I'm scared but it's better to have a plan than to shoot from the hip.  It's better to plan for the worst and hope for the best.  I'm making sure that all of my responsibilities are taken care of first, maintenance or otherwise.  That means lining up funding, making fiscally responsible decisions and, sadly, preparing to lose money.  As a buy and hold investor, this is a marathon, so I'm in it for the long haul.

Let me know if I can help.     

Regards,
Dave          

Hello BP,

If you a real Estate Investor in New York, you are going to want to weigh-in on another ridiculous regulation designed to help marginalized tenants in the city that will - in-effect - marginalize landlords across the entire state.  Last June 2019, sneaky NY legislators forced a law upon us.  The so-called Tenant Protection Act of 2019, which, among countless other travesties, limited security deposits to a maximum one months rent, protracted the already drawn out eviction process by more than three additional weeks (it takes about 8 weeks - in a perfect world - to get a tenant who hasn't paid rent, out of a rental) and provided the requirement for up to 90 days notice to remove holdover tenants, based on the time they've lived in a residence.  Each of the aforementioned topics could easily support hours and hours of commentary and analysis, so you can imagine the effect it had on those of us (including all of the courts, process servers, legal aid & attorneys) who were caught by complete surprise and had countless cases upended when NY took away the minuscule amount of leverage landlords had.  Well, they're at it again.

This year, another 'landmark' piece of legislation currently in committee of the NYS Senate is moving its way through the lawmaking process.  If you are not familiar with the term, 'good cause' or 'just cause' eviction, it basically means that landlords, in order to remove a tenant, must have what the state deems as a justifiable reason to do so.  Herein lies the rub...  This law aims to remove reasons like, expired leases, absence of leases and refusal of lease renewal terms as reasons for asking tenants to move out.  Furthermore, the law defines the rules for raising rent to include a cap of between 1.5% - 3% per year.  In a nutshell, conceivably, a tenant would never have to leave unless you could prove in court that they were constituting or causing some incurable situation.  This simply does not happen in upstate NY eviction courts.  There are practically, only two types of evictions:  Non-Payment and Holdover.  Nonpayment was made terribly more difficult (and costly) by the Tenant Protection Act and Holdovers will go away if this bill becomes a law.    

For those of us who are scaling our real estate businesses this law poses several new problems.  I'll state just the top few that come to mind and pertain to my business but I'm happy to hear additional feedback and other perspectives.

1. Inherited Tenants - I rarely purchase vacant multi-family buildings.  SFRs sure, but usually not MFRs.  As a fellow investor reminded me, "We call them 'Income Properties' because they are producing income!"  If this bill passes, purchasing inhabited buildings will now be MUCH riskier than it used to be.  I have bought turn-key investments thinking that the deal was sweeter because of the "good tenants" and been burned for it.  After a while, I was able to look past the tenancy to the potential of the properties.  With Good Cause Eviction, investors will now need to consider these inherited tenants, and the rent they pay, much more carefully.  
2. Property Improvements - Here's the bottom line, if investors cannot raise rents to account for capital expenditures on property improvement, the likelihood that they will make improvements decreases. If there is no "R" in ROI, then there can be no Investment. Let's face it, this is a lot of fun, but that's not why we invest. In the end, if landlords cannot improve property and rents are capped at 1.5%-3% per year, it's really the tenants who suffer.
3. Rental Markets - I haven't thought this all the way through yet, but in order to mitigate my own personal risk, the first thing that occurred to me was that I should renovate my units to the nines, jack the rents and aim for higher 'quality'   tenants.  I.e., people with more money.  Serving mostly low income (Broome County NY, Binghamton, Johnson City, Endicott) my business currently deals mostly with working, low-income individuals, couples and families.  Our goal is to provide happy homes and my staff and I really enjoy the tenant base.  There's an immense amount of intrinsic satisfaction that comes along with providing hardworking people, great apartments; apartments that are better than what the market says their money should buy (if I may be so bold as to assert that...)  

I could go on with other examples but I'd rather hear what the fellow investors in New York think.  I'd also urge everyone who does not agree with this idea that tenants should tell landlords what they can do with their property, to oppose this legislation and vote Nay!  

https://www.nysenate.gov/legislation/bills/2019/S2892?fbclid=IwAR1Jm7r1gyFhF_TE6nQZMld3wo3HNro46DCX5xux4dTW-dtpkF2faOs8Kws&intent=oppose

Regards,

Dave 

I have 10 units within a few blocks of Wilson Hospital.  I focus on the area between Corliss Ave and Main St. and I look at properties closer to Main St.  Prices are silly for large multi families right now and my estimation is that they are far too speculative.  

There are students peppered around right now, but not concentrated (yet) - to Stephanie's point - mentioned earlier in the thread.  I have two 1 BR apts that match the description you listed.  $525 with utilities excluded.  An investor in a neighboring building just rented a Studio apt for $475, excluding utilities.  

3% deals in Bing/JC, not 2%...

Good luck!                   

Hi @Barry Sanders I am a local investor in Bing.  I've had some success with both turn-keys, rehabs and students here.  If you want to invest in Binghamton remotely, you need to look at a bunch of things but you if you can make a few decisions, you'll be able to gain a better understanding of the market and whether it's right for you.  First, are you planning on student rentals or market rate rentals?  Well run student rental probably make 40% more than market rate - but there are a number of unique challenges and idiosyncrasies with the market.  

If student rentals are what you're after, among many others, I'd say there are three main factors you'll need to consider:  (1) Location.  West side (13905) is the student housing zone.  While there are beginning to be many more students on the south side (13903) the west side has a very small area that is zoned for multiple occupancies with unrelated tenants..or in this case...students.  I've never actually heard of anyone having issues with this, however it's important to understand the location-based demand in the market as well as to measure risk.  (2) Timing.  Students are signing leases in the fall for the following year.  Sep-October 2018 is your sweet spot for 2019.  (3) Competition.  Local investors are struggling in ways they have not, in the past.  this is based on larger development and a flooding of high-end student rental options.  

For market-rate rental, the main challenge here is property management and deal flow.  You can often turn key rentals, many off market, very cheap.  I might be able to help you out.   PM me or give a call.