All Forum Posts by: Jason Scharf

This is something I have been thinking of doing myself. The reason I am exploring this route is because I have been looking for multi-families in the Syracuse region since January to no avail. The market is insane right now and everything that is even remotely a good deal is going over list-price and I am outbid every-single time. I would not have paid what they ended up going for anyway. Also, the vast majority of multi-families for sale in central New York are in terrible shape or in a terrible neighborhood that I just can't live in. I don't have all of the connections and time to try and find off market deals, so I've only searched MLS and am working with an agent.

The challenge I'm now facing is finding a plot of land in a good area that is zoned for multi-family for a reasonable price.

 Thanks Chris,

I definitely agree it's better to be safe then sorry. I appreciate the advice!

 Hi Gabe,

Yes, you are right. I was referring to 10% for each individual category as you stated. I thought I may be over inflating a bit. Especially with the vacancy and cap-ex. I guess I'm just a little skiddish in my wiggle room because I know I'm going to have to hire most if not all of my repairs to be done since I'm not exactly a handy-man. Of course, I could learn some things. Thanks so much for your response!

Each time I analyze a property in the Rental Property Calculator here on BiggerPockets, I always assume 10% across the board for expenses like Repairs/Cap-Ex/Vacancy/Management regardless of the shape the property is in. While my goal is to House-Hack and take a crack at Land-lording without Property Management in the beginning, I still like to factor it in my analysis in case I move someday before I sell. The only problem is, using 10% across the board literally knocks out almost 100% of the properties I've analyzed. I just hope I'm not missing out on opportunities because I'm being "too" conservative in my numbers. Any comments on this? 

The problem is, I have no idea what the other parties are offering or if there even are other parties. I guess it's at the discretion of the listing agent to release any information. It's not like I'm at a local community center participating in an auction and know what offers are on the table. It's like playing blind. So, if I did know what the other offers were, I probably would have re-assessed my so call "low-ball" offer. I mean I did offer above listing price.

The problem is, I have no idea what the other parties are offering or if there even are other parties. I guess it's at the discretion of the listing agent to release any information. It's not like I'm at a local community center participating in an auction and know what offers are on the table. It's like playing blind. So, if I did know what the other offers were, I probably would have re-assessed my so call "low-ball" offer. I mean I did offer above listing price.

So I am trying my darnedest to secure my first deal and well, I did not get the winning offer on either. I know that two offers isn't exactly a lot and that I am in the infancy of the Real Estate Universe, but I am trying to learn my best from these experiences so I can at least increase my odds the next time around. Any insight or tips that may increase my odds or just steer my mind in a better direction would be of the utmost appreciation. Here is a summary of the background of the two recent deals that I was not successful in:

Deal #1:

Location - Eastwood neighborhood of Syracuse, NY (considered good, lots of rentals, safe, B- area)

Property Info - $90,000 listing price. Foreclosed Bank Owned sale. Two family unit on busy street. Identical top and down 2 bed 2 bath units. No rent rates listed. Great condition. Not turnkey though. Needed lots of updates. No appliances. Comps in area show the price was below market value. No idea what it sold for but Zestimate says it's worth about $126,000. All I know is that the bank took it in an auction for 112K in 12/16.

My Offer: I offered $92,500, FHA, 1K earnest deposit. I was very nervous because the rental property calculator that I use on bigger pockets was on the border of being a good deal. I always am very conservative with the calculations and factor in 10% for everything across the board, (mgt, repairs, vac rate, etc.) even though in the beginning I'd like to live in one unit and not hire property management. I also am nervous when it comes to estimating repair cost and while this property seemed like it was in good shape, I still never know what to expect. (I am not a contractor nor a handy-man).

Results: Did not accept my offer. No counter. Property had pending sale within two weeks of being listed. Don't know what price was.

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Deal #2:

Location - Northside neighborhood of Syracuse, NY (not as nice of area, but still good. C, C+ area, lots of rentals)

Property Info - $75,000 listing price. Normal sale. No rent rates listed. Two-family. Mirror images of each other, up and down unit. 3 bed, 1 bath. Wet basement, bathroom and kitchen needed updating. Needed many new windows. 2 new water tanks, one new furnace and sprucing throughout. Seemed to be in good condition but needed many updates. Comps in area show price was low. Comps all over the map, but seemed to be worth in low 90's. Zestimate was 78K and was assessed for 86K.

My Offer - $76,551, Conventional, 1K earnest deposit, personal letter with offer.

Results - Did not accept my offer. No counter. Was just notified by my agent that the accepted amount was for 90K among 13 offers. The person who won used escalation clause up to 90K.

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Conclusion - Clearly I need to reassess my strategy. While this has been a good learning experience, I am going nowhere with this approach. 

BiggerPockets. PLEASE HELP!!!

P.S. I have an agent as I am not one. She has been helpful and did tell me that she thought my offers would not get accepted. But no deal is better then a bad deal! 

Hello BP community,

Not sure if you're allowed to give names or companies on here but wanted to see if anyone had any suggestions for good contractors in the Syracuse, NY area. I'm currently looking to invest in a small multi-family in the area. Hopefully a place that doesn't have insanely high repairs but most likely I'll need some. I'll need someone to put down flooring and/or new counter-tops in kitchens, and possibly some roof repair, etc. Hopefully I won't need new siding or foundation repair, but it's a possibility. Anyways, any names or trusted referrals would be much appreciated. Thanks so much! 

So here’s my question,

I am currently working with an agent to acquire my first investment property. The objective is to house-hack to begin my real estate investment venture. So, I am set up with an auto-alert system for every small multi-family in my area to be sent to me. Using the 50% rule to weed out listings, there are slim pickings to say the least. However, I have been getting some alerts with extremely high listed rents which are not indicative of the rent rates in the area I live in (Syracuse, New York area). These listings are posted as having rents like $1,500 for a 3 bedroom in a low priced home (very high rent for my area) but are located near colleges (in particular SUNY Oswego & Syracuse U.). I’m assuming that the rents are inflated because they are counting on college students renting out each room and splitting the cost.

My question is, would going into the college student rental market possibly be a better way to begin this venture opposed to house-hacking? Here’s an example of the latest alert I was just sent which is presumably a SUNY Oswego off-campus home for students:

2 unit home with Asking Price of 75K and taxes of $2,409

One floor 4 bedroom Rent - $1,350

One floor 3 bedroom Rent - $1,500

= Total Gross Rent of $2,850

Using the 50% rule, assuming nothing down and insurance of $1,000 per year with a 6% interest rate, the Net Income is, $691 p/month. I mean come on!!! What’s the catch? If it were this easy everyone would be doing it and clearly this may be too good to be true. I guess my question is, when I’m sent listings that show apparent “fair market rent” with just an average joe living in the units vs. “college student rental listings” with multiple students living in the units, how can I ascertain the validity of these numbers?? Maybe tapping into the college rental game would be a better way to go?????

As always, thank you BP community!

I recently looked at a two family. 3 bed 1 bath downstairs apartment and 1 bed 1 bath upstairs apartment. The asking price is $134,900. It's been on the market for one week as of today. The rent is said to be 1100 and 700 respectively not including utilities. Total taxes are $3,955. I plan to house-hack my first deal. House was recently updated quite a bit. It will most likely need two new furnaces in the short term. Necessary repairs seemed to be minimal but I'm not a home inspector nor an expert on assessing less than obvious repairs. Property is in a nice suburb of Syracuse, NY on dead end street. Currently vacant and previously rented downstairs to sellers step-child and upstairs to one single individual. The only comp to be had in the area recently sold for $124,500. It's a bit confusing because the list price was said to be 122k but sold for 2.5k higher? I have seen this with a few comps that were sent to me by my agent and I'm not entirely sure I understand why.

To make a long story short, I ran the numbers and decided that I may want to start off by offering 90K to just let the seller sit on it. When I mentioned it to my agent, she stated that it would be assured to alienate the seller and would most likely not receive a counter offer as it's over 44K lower than asking and has only been on the market for a week. I have read many tips stating that if you're not embarrassed by your offer, than it isn't a good offer. I am not trying to purposely low-ball an offer, I just ran the numbers using an FHA loan and maximum potential expenses and it seemed that this was the number necessary to ensure at least $100 of cash flow per unit. Not sure how to react to my agents reaction, but wanted some input on making offers in general. Thank you in advance!