All Forum Posts by: Freeman Schultz

I have been hearing a lot about smart thermostats particularly the ecobee premium smart thermostat and the Honeywell smart thermostat. 

Has anyone used these smart thermostats in their buildings?

Are there any risks associated with smart thermostats?

So far, what I have found online is a mixed bag. Some say they are great, others say there are issues.

In regards to refrigerators, what is everyone's opinions about GE, LG and Samsung?

Has anyone had any experience with their repair services? GE has Bodewell, LG has LG Premium Care and Samsung has the Samsung Care Network,

Anyone here have any experience or background in fitness center design?

I recently checked out a condo for investment purposes. The agent was giving me a tour of the fitness center located at the top of the building. It looked all very nice, but, I made a comment that there was a lot of windows and it was very easy for people walking by to look inside

The agent told me that windows and open spaces were now industry standard gyms due to safety issues. That more windows meant more safety because nothing could be hidden.

I took the what the agent said with a grain of salt. 

I am not an expert, but my thinking is that more windows, mean more exposure and less security.

Can anyone here confirm what the agent was saying?

Thank you.

I am looking into replacing a refrigerator and I have narrowed it down to LG or Whirlpool. What do you think is the best?

Quote from @Robin Simon:

Quote from @Freeman Schultz:

When it comes to a commercial mortgage, do you just wait until a couple of months before the mortgage reaches the maturity date before looking into refinancing or do you start the process within a year before the maturity date?

I have heard of some investors not even waiting the 5 years on a commercial mortgage to refinance and as soon as they are able, they immediately do a refi. 

 You should certainly start the process earlier than maturity, especially at the very least within a couple months of the maturity date - there can always be things that cause delays and pushes and even missing the maturity date by a couple weeks can have harmful consequences (since it will technically be a default / missed payment even if the lender is OK with it).

Also, commercial loans even with the strictest prepayment protections / lockout periods will almost always have at least a 3-month open period prior to the Maturity Date

 Thank you for your response.

I am beginning to see that a you should at least be prepared a couple of months before the maturity date. There is always some type of delay or something that causes the maturity date to be missed.

I have had ddiscussions with other investors where some of them said that there is no point in actually in starting the refi process until the maturity date due because then you will have a better idea of what the interest rates will be. However, I have heard from other people that you should be prepared because you might need the money for another property.

Quote from @Erik Estrada:

Quote from @Freeman Schultz:

When it comes to a commercial mortgage, do you just wait until a couple of months before the mortgage reaches the maturity date before looking into refinancing or do you start the process within a year before the maturity date?

I have heard of some investors not even waiting the 5 years on a commercial mortgage to refinance and as soon as they are able, they immediately do a refi. 

 Hey Freeman, 

This depends on your goal. Will a refinance increase your cash flow? Will the refinance help you cash out on equity to buy more rentals? If it's reaching maturity and you are planning to keep the property longer, maybe you will need to look for a longer term. There are commercial mortgages that are 30 years fixed with no balloon or ARM.

Thank you for your response. 
Well let's just say the owner just wants to refi due to the the mortgage reaching maturity.
I heard something about commercial mortgages that are more than 5 years. I am not sure what they are called though.

You are right about goals. I was told once when it came to refinancing, do not refinance just for sake of refinancing. In regards to what you said about goals, how much of an impact does that have on the timing of refinancing a loan? I am guessing in regards to buying more rentals, if there is a opportunity to buy more rentals, I am assuming that if it is a great market, you would want to refinance as soon as you can.

Quote from @Caroline Gerardo:

What type of property? 

In advance: know what credit score, income, and equity are needed before you purchase to be able to achieve this every five years.

Thank you so much for your response.

A 10 unit multifamily.

Whether it is a multifamily or commercial office, how much of that plays a factor in the refinancing?

When it comes to a commercial mortgage, do you just wait until a couple of months before the mortgage reaches the maturity date before looking into refinancing or do you start the process within a year before the maturity date?

I have heard of some investors not even waiting the 5 years on a commercial mortgage to refinance and as soon as they are able, they immediately do a refi. 

Quote from @Wesley W.:

Quote from @Freeman Schultz:

It is not just NYC, but also Albany that needs to figure out how to fix the housing market.

I'm Upstate.  I was talking about the entire state of NY.  In the grievous legislative controls that were adopted in 2019, the entire state is subject to the overregulation that NYC has suffered from for decades.  With regards to housing, there are very few controls that are just specific to NYC these days.  There is statewide rent control now; each municipality need only opt in - as several have over the last few years.

Just some clarification, what I meant by Albany were the legislators who made these new rules in the first place. I was using NYC as an example of where apartment are made vacant. I suspect that in other parts of the country where landlords/property managers warehouse their apartments do it for the same reason as a way to mitigate cost and risk.

You are correct. Whatever Albany does to NYC impacts the rest of the state. Due to the media, it just feel like it is NYC specific.

Quote from @Wesley W.:

I would always prefer to leave a unit vacant (even for an extended period of time) rather than place a suboptimal tenant, especially here in NY.

In the Socialist Republic of New York, there are very few means left for landlords to use with prospects that are less than perfect with regards to screening criteria.  Since one cannot deny an application based on previous evictions (you're reading that right), nor collect any additional security beyond one month or any advance on rent (such as last month), it's difficult to mitigate that business risk.  Add in NY's historically lengthy and expensive eviction process, and the "just cause eviction" statute that appears imminent, and you have a recipe for being financially disemboweled by placing a bad tenant.

(Side note: I will debunk your theory about refusing to lower the rent.  I've found that I get WORSE qualified prospects when I reduce the rent on a vacant unit, and not a single "highly qualified bargain hunter.")

Sometimes, there is a point where you've been through the pool of current apartment seekers and they are all woefully inadequate, so it's time to take the ads down for a few weeks and let the duds work their way through the apartment hunting process with someone with lower standards / bigger appetite for risk.

You can thank the NYS legislators for passing such draconion, unilateral laws that actually hurt the very constituents they claim to be protecting.  So, warehousing it is, sometimes.  It certainly cuts my top line revenue.  But it certainly beats the alternative.

Based on your experience, I am obviously not alone in coming to this conclusion for my rental business practices.

If the apartment is only going to command a below market rent, there is no point in renting it out since it will operate at a loss. Better to keep it off the market and save money.

I understand that.

However, other than a way to save on cost, what I was wondering is that if there was any other way for an owner or landlord to make a profit from a vacant unit. It appears that other than appreciation and depreciation, there are not a lot of options.

Also, I want to clarify my point about apartments being vacant due to landlords refusing to lower the rent.

In my experience, I have seen this happen. There are landlords out there who refuse to budge on price because they are either not aware or ignoring the current state of the rental market. Sometimes the landlord gets a clue and realizes that the rent they want is not aligned with the market, they adjust and it rents. Sometimes they stick it out, the market changes and they get what they want. 

That being said, I absolutely agree with your statement regarding the consequences of reducing the rent on a vacant apartment due to the type of prospects it attracts.

Usually, that prospect is in poor financial shape and they may not even have enough money for the security deposit.

FWIW, there are parties who blame landlords for warehousing apartments. As you pointed out, it is the NYS legislators that created this dynamic and they are the ones that rectify this matter. Landlords are simply mitigating their risks.