All Forum Posts by: Jeffrey Dorman

You need to check out Mohawk Hudson Investor Exchange...it's a great group of investors, mentors and resources to help you on your REI journey.

https://www.mohawkhudsoninvest...

Tim Halladay at Victory Funding in Mechanicville NY...extremely knowledgeable and able to connect you with the best product to help achieve your goals. Can't speak highly enough about him!!!

http://www.victoryfundingonlin...

@Dave Vona Thank you!

Just wanted to share this on here for all interested. It’s a relatively new meetup group, but has some good momentum going. They meet the third Thursday of every month at the Crowne Plaza in Albany…tonight at 6:30 if anyone is interested!

https://www.mohawkhudsoninvest...

Hi Andrew, thanks for the response and yes, all makes sense. I'm actually attending an REI meetup tonight. It's my second time at this one, they meet once a month. It's just getting started, but I've already made some good connections. I plan on asking this question tonight in hopes of getting some insight from more experienced local investors. I just put it on here to try and cast the net as wide as possible.

I'm not planning on going with anything fancy, just everything new because it requires a full rehab and I mean down to the studs full rehab. Which in an area where most multifamily homes are well over 100 years old, everything new is a BIG upgrade. So it's the cost of this complete rehab that is pushing the budget up and making me worry about the ARV when it comes time to refi. There are no local 2 units that have undergone this scale of rehab in the past 12 months. I'm trying to be conservative and keep it to a minimum, but most items are unavoidable. My rehab cost might be a little high because this is my first and I haven't established a good relationship with a contractor yet.

I could skimp out on some aspects of the rehab, essentially "polish a turd", but I don't want the headaches of a property with constant maintenance issues, nor the tenants that would be attracted to that type of property. 

Here's how I'm seeing my options:

1. Risk it, go for the full rehab and hope the appraisal supports the cost of the purchase and rehab and I'm able to get all or most of my money back out of the deal. Also, be able to charge higher rents and have less maintenance concerns. Worst case, I have to leave some money in the deal, but I will have learned a ton!

2. Do bare minimum and make it livable again. Shouldn't have any issues finding comps and getting it to appraise, or getting all money back out of the deal. Rents will be less, tenants may not be the most desirable, and have more frequent maintenance issues. 

3. Magically find a happy medium that enables me to get the best of the first two options. 

We just bought our first investment property, a large 2700 sqft two-family, 2 up and 3 down, in the village of Hoosick Falls. It was an REO deal and we got it for a good price, but it needs a lot of work. We are struggling a bit on deciding the scope of rehab and whether or not to convert it to a 3 or 4 unit (requires a zoning variance). Our goal is to do a full-gut rehab knocking out all the major capital expenditures and having some units that are a little above the average for the local market. Our preliminary rent expectations have it cash flowing well, even as a two-family, but the ARV is a bit more in question. There is nothing comparable that has sold in the last twelve months to support the level of rehab we are going for and would enable us to refi and get all, or close to all our money back out of the deal. If we expand the search to the Troy area, there are a good number of comps that we could use...would appraisers go for that? We could go for commercial financing as it would be around a 1.5 DSCR. Any local investors have some thoughts or suggestions that could help us? Any local investors available to provide some mentorship and possibly meet up to go over the numbers/options?