All Forum Posts by: David Ribardo

@Santiago Martinez Hey - looks like we both have scaled up our business since we crossed paths back in 2017. Nice work with the portfolio, it's good to see you are still at it. We might be a good fit for working together as this next year kicks off. 

Nice work on having your own construction side. That's quite often the biggest headache I find with deals, and the missing piece that most often can cause a new investor to get out of the game.

@Jonathan Davalos I've closed deals with a few wholesalers over the past years here in the Lehigh Valley. Overall, my experience has been mixed. There are some skilled wholesalers delivering a reputable service in the Philly markets and throughout NJ, but I have not found anyone who consistently can deliver good customer service in this market. You see lots of posts on forums and facebook groups about wholesaling, but ultimately most of them have not closed a deal. The most common challenge I encounter is a wholesaler who is not entirely forthcoming about their strategy with the seller. This creates friction when they try and hide their profit margin. The ALTA statement at closing will always show where each dollar in the transaction goes to, so that just results in a frustrated seller who feels wronged. 

Regardless of what your mentor or guru class tells you, you should always be 100% honest about what is going on in the transaction. This will put you in the top 50% of wholesalers in the Lehigh Valley. 

@Eric Clinton Some stats from the area: Last year there were 9,714 total properties closed throughout the Lehigh Valley (Lehigh / Northampton counties). 1,885 were closed with cash, so 80.5% of buyers had a mortgage. There are still deals to be had as a buyer with financing. Some of my clients buy cash, but many of mine are buying with conventional lending products or other peoples money.

@Armando Lopez welcome to the area. The Lehigh Valley and Allentown are an excellent market with some great appreciation, favorable landlord tenant laws, and adequate availability of deals. 

Be careful - there are lots of predatory individuals selling off-market deals to new investors in a way that could get you in trouble. Lately I've been seeing a trend of properties that were listed on the MLS, didn't sell, and a wholesaler is now promoting them as "off market opportunities". One of these we had under agreement for $530k with the seller paying all agents commission, it fell through because of maintenance issues. Now a wholesaler is now promoting it for $600k, plus the buyer paying a $18,000 commission on top of that. Some of my clients got real excited about this as a potential opportunity, but they had quite the shift when I told them exactly how low the seller was actually willing to go!

Make sure you choose experienced professionals when you build your team. Your agent needs to have personal investing experience with the types of deals you do - this is specific to flips or buy/hold properties. I highly recommend they are local to the market you choose, and have closed at least 20+ deals in the past year. Welcome, and good luck!

Hello @Jonathan Sheftel! I live here in the Lehigh Valley. Even though I'm within 20 minutes of any of my properties, I wouldn't think of trying to self manage! A full time property manager who answers the calls, fills vacancies quickly and efficiently, can quote each townships regulations from memory, and has all the best connections is a key part of any investing business. It doesn't matter how good your agent, lender, home inspector, and market are - if that property manager can't put a performing tenant in and keep them happy, you won't have any income and the whole thing falls apart.

I've seen a few individuals try and self-manage from out of state. If you have strong contractor connections and someone who can physically go to the property on a short notice, you may be able to make it work. Most often your lack of experience will get you in trouble. It only takes one bad decision to lose a full year's profits. My PM company has gotten quite good at resolving these issues. Recent examples: someone self-managing their property hired an unlicensed contractor. They didn't pull permits, hung drywall / painted, and the city made them tear it all down to inspect the electrical behind it. Or another one (which was managed by a full-service PM company) had a plumbing clog. After thousands of dollars in expenses and the tenants having no water for two days, we took over. Turns out it was a quick fix for a master plumber and we had them back in the unit a few hours later. 

@Sheryl Sitman good to see you here, it's been a while! I hope all is well!

Matt, what strategies are you using to find deals? Are you working with an agent or on your own? What are you looking for in an ideal multifamily property?

Hello, and welcome to the community. I have multifamily properties throughout these townships. The Lehigh Valley definitely has a little bit of everything throughout it. I can't guarantee the driving time with traffic on I-78 / I-80 being hit or miss, but about 50% of my clients are based in NYC and find it a reasonable drive. It's a tough market to buy in these days, with lots of out of state investors moving in due to our more landlord friendly laws and better cap rates. With this, we are still closing an average of 1-2 deals per week, so don't let this scare you away. Most new investors find that the 1900-1920 construction is intimidating, but end up purchasing one that's been upgraded with modern electrical, plumbing, and roofing. This lets them do a quick cosmetic rehab (paint / floors) and place a tenant at very attractive rents. If you have specific questions to help you evaluate the market, please post them!

@Zack Busch Fancy seeing you here! 

I've had mixed results with most of them. I had clients work with KPMM, SlateHouse, Cassidon, and Empire. I've had clients that have fallen in love with each of them, I've had clients that have fired each of them. Your results may vary. If it isn't going well, fire them and move on to the next, until you find the right one. They are a dime a dozen and you will find the right fit very quickly that way. It it becomes a stressful relationship, just move on!

For my own personal style, I wanted a property manager who would bring my properties to the highest and best, managing renovations, raising rents, and passing on the utilities. Since none of them offered this service or did an acceptable job at this, I finally ended up starting my own property management company to work with my clients and I.

@Zack Busch Lots of good info here. Overall, there are investors that are having successes in every neighborhood across Easton. The roughest neighborhoods can often be the most cash flowing, but require a skillful touch. A great property in a great neighborhood can also turn into a financial drain, if it is not managed well. A good team will ensure you are successful in your journey. If any link is weak - replace it as soon as possible. One of the biggest pitfalls an investor can make is using an agent without personal investing experience, or trying to "make things work" with a contractor or property management experience once the downhill slide starts. Follow your gut feeling, and good luck!

@Randy Gutierrez fancy seeing you here! I've got a property I have to give you a call about...

Hi Zack, welcome to the area. It's an extremely competitive market, but one that I'm still very optimistic about. The economic growth has been fantastic, tenants are continuing to support higher rents, and we are starting to see more inventory on the MLS these days. I recently closed on another 7 units for my own personal purchase in Easton, and my team and I have had a great experience investing there.

As far as areas to avoid, or areas that I really like: that depends on your team, risk tolerance, and personal investing style. There are tons of books on how to run the numbers, but I find it is more important to find the right fit for your psychological profile. I personally pay a premium price for already renovated properties that are in a good area and easy for my property management company to rent out. This gets me a slightly lower return on paper, but has been a fantastic fit for me. I also have had clients purchase small, alleyway rentals that were in need of gut rehabs... and turn them around through diligent work for great returns. The big thing about Easton is that the township is very diligent in their Certificate of Occupancy inspections. I always plan on an increased renovation budget since they will typically make you repair some more cosmetic things that other townships would not. 

Welcome to the area!

@Jason Reynolds, it was great working with you. Nice work on the renovations!