All Forum Posts by: James Cerasoli

Hey Alex,

Where are you looking to buy? Suffolk or Nassau? And how are you searching for deals? Are you working with an agent or are you browsing sites like zillow and realtor.com?

I'm a realtor who works with investors daily and we work with short sale situations and other distressed owners and I can tell you that there are definitely legal multi-family properties that fit the 1% price to rent ratio. In fact, I just had an open house in Ridge, NY where the asking was $320k and the gross rent is about $5000. It had about $12k in taxes but after running my numbers, I calculated a cost of about $1000/mo for the owner who'd choose to househack and then about $1000-$1100/mo in cashflow upon move out and that's including property management, vacancy, capital expenditures and everything else (since I am an investor myself I know). This house needed work on the lower unit but the ARV will bring it to about $420k which would make it an awesome BRRRR and I was even about to pull the trigger and buy it myself.

Anyway, what I'm trying to convey with the above example is there ARE deals here, you just need to know the right people especially in the competitive market we're in today. I was in the same boat as you not long ago thinking there's no deals here and LI prices are too ridiculous but if you're looking for cash-flowing, 1% rule, BRRRR properties, they are in-fact here.

Thanks for the advice everyone. This is definitely a huge learning experience. The issue with the security deposits was that we inherited these tenants so it was hard to prove that they did these damages and therefore be able to rightfully deduct it from their security deposits but I told him to take pictures of the entire property so we have it to base off of for the future. 

I told him that I’d like to have before/after pics of any work and repairs done on the property from here on out since it’s hard to blindly trust someone doing work on your property 6 hours away and he understands.

I’m also having all future repairs and other costs go through us for a pre-approval before going ahead with them. Or at least, have costs over a certain threshold go through us first. 

I want to assume responsibility in this situation, accept the blame and learn from it. The core of the whole problem was not being on the same page with him and that’s my fault so we’re driving up there in a couple weeks to have a meeting with him and lay out a more structured and rigid contract and plan moving forward. If this persists, I will keep him as a handyman on an as-needed basis and take on overall property management responsibilities myself. I may do this anyway when I move 2 hours south of there in the fall. 

@Karl B. Haha! I was laughing with my partner about the lawncare nonsense. He even had flower planting on one bill. And he was not taking the damages off the security deposits himself and it took him almost 2 months to tell us what the damages were and even said we can return the deposits back to two of the tenants who moved out. I think I may follow your tracks and begin self-managing while finding a local handyman and having a leasing agent handle finding and showing the place to new tenants.

@Theresa Harris No major repairs without our permission like an upgraded bed or bath or something crazy like that but he has installed a brand new stove without our permission on this latest bill. The mattress he ran by us before buying. And you brought up another issue, he told us we can return security deposits to two tenants and then hits us with this! Just a bad experience and I'm already highly considering sourcing out a handyman and taking over the overall property management responsibilities myself since it's manageable with only 6 tenants and I am moving nearby in a few months. Thanks for the advice and input.

@Matthew Irish-Jones That's a mistake we made, not putting it in writing on an amended contract. We told him after the first crazy bill to have us approve any costs/repairs over a certain threshold but he only honored that temporarily. As for the before and after pictures, this is another shady part.. I don't know if he's just busy, old and forgetful or purposely not providing us with this but we've asked before and nothing. My partner and I were about to contact a tenant to check for us because of the distrust. It's definitely time to start thinking about other property management options.

@Anna Sagatelova Yes, he's a one-man show and the agreement is certainly bare-bones so there's a lot of lessons learned here. I signed a contract he wrote up without any terms or contingencies of my own, which in hindsight was a clear mistake. He doesn't charge for vacant units and the leasing fees are included in his 12% property management fee. Thanks for the tips, I'll definitely have loads of questions lined up for the future interviews I have with legitimate prospective prop. management companies. Looks like I'll have to do my first firing of my real estate career.

@Mitch Messer He's not a NY broker and he does have other clients so you make a great point to see if I can find his other clients, past or present, to reach out to and find what their experience has been. And I think you're absolutely right.. he's a handyman who is way over his head lol

Hey all,

I purchased my first rental property May of last year that is a 3-unit student rental. I found a property manager through the attorney I worked with in the area who claimed he uses him on his own properties and that he's an excellent handyman so I thought that would be perfect considering I'm about 6 hours away. 

My partner and I were shocked when we received our first "quarterly" bill as we only had a 10% maintenance allocation and this bill exceeded that by almost 3X, totaling to $1985 and that absolutely killed our cash flow for the first 3 months. Following this, we had a talk with him telling us to run large purchases and optional repairs by us and the next two quarterlies were much lower but the items he was charging us for were still dubious.

Now onto the most recent quarter when 3 of the 5 tenants moved out, he hits us with a bill for an absurd amount of $2762 on top of a single bedroom we had him renovate that came out to a total of $4621. We already pay him $360 (12%) a month for his management fee so I don't know what this is paying for because he found tenants at the absolute last minute, never asked us if we wanted to increase rents or bill back utilities, never shared us the rental listings and never showed us any pictures he took to advertise the property. And so far, the tenants he found are headaches and he's coming to us with all of their problems.

Here are the quarterly bills and the bill he gave us for the room renovation. I have zero experience with construction and repair costs so please let me know if anything seems inflated. And I want to know if I need to get used to all these charges (especially with a student rental) and take them into account for future properties or if my property manager is in fact taking advantage of us.

@Randy E. Thank you for the thoughtful response. That makes a lot of sense and will definitely help. I’m thinking maybe I’ll search for properties that seem distressed and are owned by absentee owners and have been owned for an extended period of time so that the odds of them being motivated and wanting out are higher. I plan on sending out an email marketing campaign, try some cold calling and try out text message marketing to find myself a deal. Although it seems like I might be better off finding a owner-financed deal but I guess it’s worth a shot.

@Dennis M. Can you elaborate?