All Forum Posts by: James Partsch Jr

There is a 10+ unit building that was under contract and the deal fell through due to DEC records of soil contamination from a previous nearby gas station leak.  The owner of the property has had it for over 30 years and owns it outright.  I have several questions that I am seeking guidance on. 

1 - what type of company would one call to determine how long organic soil remediation typically takes before you can get certified (quick internet search says 20-30 years but want to confirm that with a professional)

2- who would one call to assess the situation and provide remediation options/scope/timelines/costs?

3- the owner is willing to hold financing with the newly found information and I am a proponent of "your price and my terms or my price and your terms" but I am seeking some guidance on shaping this deal so we can both walk away feeling like a winner (especially knowing a bank will not finance the property with DEC certification of soil remediation)

4- there are no comps that could be used for the property so I am assessing it like a business, purely off of cost and income basis which plays back into the "how to shape the deal" advice I am seeking.  I would like to ensure I am paying a fair price for whatever terms are presented and am seeking someone's advice here.  Revenue of 106k annually but landlord pays all utilities.  Taxes of 9k annually, updates needed to the interior of the units (aesthetic not functional), assuming 5% maintenance, 5% cap ex, 3% vacancy, 8% property management, 3k annually for insurance, pending utility costs, pending garbage costs, pending snow removal costs.  There is no parking lot but year-round parking is allowed on the main street and this is walking distance to a top 100 liberal arts colleges with an annual tuition of over 70k per year drawing in residents that often rent off campus due to their family's financial situation allowing for such.  

If you are well credentialed I would even explore paying you for an hour of conversation to help but would need examples of said credentials to warrant that.  I am open to all feedback and advice or any direction that may be able to be provided and would welcome a call, email string, private messages etc.  

thank you @Johann Batista!  I have been playing around with a few apps out there.  A ton of great tools.  There is one sponsored by BP as well.  Cozy is definitely a front runner between my wife and I with a few other prospects, especially as we look to scale. 

I am looking very forward to being able to finally attend a meetup.  Also, I think it is a great idea and thank you for sharing in what you have accomplished with the property @Raylan Willis. 

@Dennis M.

Great quote!  That being said, anything worth doing is tough.  If it weren’t, everyone would be doing it. Only way to ensure failure is to never try ;-)

I’d rather try and fail.  FAIL=First Attempt In Learning.

Only true failure is if you don’t learn anything from the lesson life graciously handed you.  

@Matt Dixon we have been contemplating the animal thing.  At first we said absolutely not, but to your point, it could limit a great tenant.  We will look at it case by case.  We also plan to ask for references.

Thank you @Michael Pearse and @Gary Lipsky. Looks like I have my goal to focus on tomorrow. I'll get the HELOC resolved, or at least begun moving towards execution.

Thank you @Gary Lipsky . Good catch on my miss of that fact. The payment will go up. We will not refinance the home as we have six more years (originally a 15 year). Going to go the HELOC route if a deal warrants. I do have this in my math but failed to even mention it above which is a HUGE miss.

@Mike D'Arrigo , thank you for that information.  I was unaware of this information and what you shared is exactly why I love the BiggerPockets community.  

Thank you!

I really appreciate the advice from each of you!  

The reason for the speed of renting out is two-fold:

First, this is our first time renting out any property and want to learn the proper way while not rushing ourselves into something that we have to learn the hard way later.  We are planning to manage ourselves, although we would like a second property by year's end and look to transition to a pm. 

Second, we are currently living in the home as one entire unit (although it is separated into two).  We will not be closing on our new home until August 15th and have some items we plan to do prior to moving in.  Our target move date for the new home is September 1.  

We did not take the school year into consideration and that is definitely something that is noted.  Great point, easily missed on our end.  Thank you for that.  

Looks like I have some items to run by my wife and decisions to make.  What an awesome community we have here!