All Forum Posts by: Denice S.

All true, my biggest pet peeve is floor, over floor, over floor, over floor, over floor, over floor ... It bothers me because there's no way I can add another floor! I have to dig it all up.

This happened at one of my properties once where the electric had to be turned off for safety reasons (water was seeping in on the service board). I had to have the service updated and by the time I secured the electrician and he performed the work, it was 48 hours.

The first thing I did was immediately offer my tenant a hotel room (it was right before Christmas) although they declined and stayed with family, I was prepared to put them up.

The 2nd thing I did was offer the neighbor money to plug my tenants fridge into a heavy duty exterior extension cord through his garage. The neighbor was happy to help and took no money.

Maybe you can ask a neighbor for help preserving their food?

@Jonathan Marcus

good point...I tend to look at worst case scenarios as it's a formula that keeps me out of financial trouble. But as you suggest, the perfect storm of a rock bottom purchase price and a rock bottom rehab, all luck on my side gets me closer to 2 properties, interesting

@Steve B.

@Steve B.

Everyone! thanks for your advice and comments and for the 1031 reminder. I guess I never thought of my strategy as "the" plan it just so happens that its achievable here in Western NY when you know the area

@Engelo Rumora I live in Buffalo NY and invest in the working class neighborhoods, and some surrounding cities. You have to stay far, far away from the crime

@Aaron Montague you've made me see that I don't really have a criteria for a leveraged investment and I should probably get one. My only established criteria has been for an all in cash property

@Aaron Mazzrillo wow! you've made me see a potential power which never occurred to me. While this is currently my nicest property, my others are not far off with values between 70-90k.

@Cal C. all good points, especially #5, unfortunately the seller financed deals are in short supply around here.

You're all awesome and I'm continuing reading all of your posts. Thank you!

Thanks Andy.... a fabulous reminder that I'd have to hold this a year to exchange...otherwise the rules are pretty much 'clear as mud'

Hello everyone!

I’m a single family investor who has always paid cash for my investment properties. My typical formula has been to spend 10-20k on the house, another 10-15k in repairs, rent it out for $800-900…rinse and repeat. This formula provides me with returns around 30% and a tremendous cashflow of between $500-600 per house and I’ve grown comfortable with the process. These properties are all in decent, working neighborhoods.

However, a few months ago I closed my first seller financed investment property. It’s in the ‘burbs and has a bit more land. Now that the rehab is complete, I’m having a difficult time deciding whether to continue with my plan to rent it out, or just flip it (1031 exchange) and move on. I think I’m hesitant because I’m not used to such high carrying costs...using other people's money is simply unfamiliar territory Having admitted that, I don’t want to chicken out just because I’m “not used to something.”

As a rental, the cashlfow on this property would be (conservatively) $125/MO

OR

If I sold it now, a quick sales price is 105,000. After all selling expenses this would leave me with around 30-35,000 profit….which I could use for my above mentioned formula. However, I realize having a tenant buy the majority of this house is an incredible opportunity too…albeit 15 years later.

I’d like some outside opinions as to whether you’d carry this house as a rental or sell it and move on to a higher cash flow opportunity.

Here are the #’s if interested…..thanks everyone.

Purchase – 55,000

Down – 10,000

Rehab-7,500 (all completed – new roof, all new mechanics, the place is tight)

Terms –45,000 at 5% for 15 years no balloon

Monthly Mortgage $350.00

Monthly Operating costs $450 (Tax,ins,PM,Water,repair fund)

Total monthly costs - $800

Rent – $925 (easily)

-Carrying the monthly cost between vacancies would not be a huge financial hardship.

Actually, there is no CoO for any sf or 2 family houses regardless of status of occupancy. For instance:

• The sf house I live in (in Buffalo) was sold to me 15 years ago without a CoO and if I sold it today, there would still be no CoO involved and all the time I’ve lived here, I’ve never had a CoO.
• If I decide to rent the sf house I live in, I would register it with the rental registry department. I would then pay $10/year….still no CoO requirements...even with a tenant involved.
• A sf unit or 2 unit house I purchase today involves no CoO or, if I sold one today, there would be no CoO involved. It doesn’t matter if it’s vacant, tenant occupied or owner occupied.

The triggers for a CoO are 3 or more units that are non-owner/family occupied or whenever additions or significant work is done that requires the permit process.

As for Tonawanda, I have a SF rental in Tonawanda. It was sold to me years ago tenant occupied and is still tenant occupied. There is no CoO requirement. This is standard across our region (Erie and Niagara counties). I’ve listed SF and 2 Unit homes and sold the same to buyers throughout Western NY, working hand in hand with attorneys and I can’t think of a single area that had a CoO requirement for SF or 2 Units.

I know your google searches probably lead you to a handful of contradictions as this region is not very good at updating their websites with current processes. To alleviate your concerns, I recommend a phone consultation with a Buffalo/Niagara Real Estate attorney…they will verify that CoO’s are just not required for SF and 2Units. And by “not required” I don’t mean, ‘not required to close a transaction’. I mean, they don’t exist.

Here’s a link to an interesting read as someone actually tries to sort out the confusion….

I have to admit, with all the misinformation, it’s no wonder investors run from this region.

Hi Peter,

That is correct information. In the city of Buffalo, single family and 2-family homes are not part of the CoO process. In lieu of the CoO, all non-owner occupants must register the property as a rental. The rental registry program fee is $10 annually for sf and $20 for 2-family and is billed every January.

While there is no formal inspection process in the rental registry program, the city will inspect if you don’t register or if they receive complaints about the property. Here is a link for more info regarding the rental registry . The PDF in this link explains exactly how the rental registration program operates.

If you are buying a sf or 2 family house that is currently a rental, you might ask the seller if they have it registered in the rental program. If so, they should be able to produce a receipt. If they don’t have the property registered, I would register the property immediately upon closing. If the seller lives in the property, the property would not be registered.

3 or more units require the CoO and they are inspected and issued every 3 years.

Hope this helps. I live in Buffalo and have multiple rentals in the city and surrounding areas, and I’m a licensed Realtor.

Denice