All Forum Posts by: Jay Lutz

Makes sense. In that case, are you recommending that us small-timers LLC or not?

Ouch! It's unusual for balconies to fall under the unit owner's responsibility.  If one falls, it'll hit all the neighbors on the way down. If it leaks, it gets everyone wet below.

Have people in VA been talking about inspections and reserves? What's the norm there @Chris Seveney?

Do most of you keep your properties under your personal names then? And just set up separate bank accounts for the separate properties?

If you buy a property with a partner (not your spouse), is it worth setting up and LLC in that case?

This is something I've been thinking about recently, too. I'd assumed most people go the LLC route, because my architecture clients typically set up LLCs for their buildings.... But their buildings are worth millions to more than a billion.... So they are playing in a different sandbox than me. Maybe I should recalibrate my strategy for my pennies.

Hi all, Trying to check the temperature on how people are thinking about FL's new inspections and reserves law (which will impact anyone with a condo or a coop in a building 3-stories or taller). Are you aware of it?

Where/how are you preparing for / learning about these changes?

What do you understand about it? 

Is it influencing any of your investment decisions? 

Do you feel your association is adequately prepared? 

I haven't read all the comments, but of the ones I have, I haven't seen anyone address what I think is the most interesting part of @Matthew Paul 's question: We have multiple cities that used to support many more people than they do today. This is a potentially a huge opportunity to revitalize those cities. The underlying infrastructure will likely need some updates and repairs, but this may be a great opportunity to reinvest in cities like St Louis, Baltimore, Detroit, and Syracuse, that have been deserted for so many years after their former years of glory. Perhaps these new populations will be the catalyst to repair the blight.

Rather than send them to already overcrowded cities, send them to the vacant ones.  Encourage them learn the much-needed construction skills, put them to work, and watch them fix the places they'll live themselves. It could be a great way to rehabilitate great city centers of bygone eras.

I've known a lot of immigrants who've come by crossing the boarder. Some work as janitors even thought they have PhDs. Others drive Ubers but want to get back to being Civil Engineers once they learn English. A women who was a Dentistry professor in her home country was my dental hygienist while she  retook her licensing exams in the US. A lot come here looking for work because there isn't any in their home country. They're not afraid of doing grunt work to rebuild their lives here, if we let them. And if they're not able to do it themselves, their kids will. Many of the people who come are capable and ambitious and will happily contribute to the US economy if we let them. They could be the solution to the run down, empty parts of our cities, too.

If, as @Melanie P. said, Jared Kushner is buying thousands of units in Baltimore... he's betting someone's gonna live there. Could be a good way of boosting that investment.

And, per @Jack Seiden, perhaps this is a way of preventing other cities from the blight of desertion that will be inevitable due to the low birth rate.  In Italy, starting bid for some buildings is $1.... 

Hi Josselyn,

You can find the new law and its details here. Generally, the law requires that buildings undergo structural inspections every 10 years, once the building turns 30 years old, and that the building association proves it has adequate reserves to repair / replace anything that is flagged in inspections or projected as a needed repair in a timely manner. Any condo or cooperative building that is more than 3 stories tall is required to comply by 12/31/2024. 

This is an effort to prevent another disaster like the Surfside Tower collapse in 2021 that killed 100 people. That condo association KNEW they had structural issues, but delayed / chose not to fix them. 

Structural repairs can be very expensive, so it can be hard for condo associations to convince members to pay for them / to save money to pay for them in the future. Through these inspections, the engineers will call out anything in need of immediate repair and lay out an expected remaining lifespan for structural elements and their expected repair/replacement costs. The Association will have to prove it has funds, or will have funds, to do the repairs when they are projected to be needed. (This should lower surprise assessments and help maintain buildings in safe condition.)

The inspection results will be made publicly available through the state. 

I'd like to get a sense of how many people know about these changes and how they're thinking about the implications. What are your thoughts?

Hi all, I'm curious to hear your thoughts about the new requirements for taller, older FL buildings. If you own a condo in one, are you planning on selling it? Do you feel your condo association is adequately prepared? Would you buy a unit in one of these buildings before the end of the year / before they have their inspection and reserves in order? Where/how are you preparing for / learning about these changes?

Could there be something you don't know about the property that will soon change the income you're projecting? A friend was going to offer on a property until she learned that a warehouse was going to be built on the rural land across the street.... not quite the neighbors she had in mind for her target tenants.

You can typically get better cash flow (because the property is cheaper) in areas that don't really appreciate over time (the "bad" parts of town). You may have other non-financial costs associated with this type of property that compensate for the greater cash flow (e.g. additional risk, needy tenants, tenants whose priorities do not leave room for taking care of your property, etc.).

It may make sense to "overpay" for a property that won't cash flow initially if you know that the value of that property will skyrocket in a couple years (say, because Amazon is building its new headquarters a bus stop away, or you're a geologist who knows there's probably oil under that grass). If you know you won't make money this year, but you can sell the property for an extra 30% next year, that's a great ROI.

Is your general expectation in this case, that all the older buildings will eventually be demolished? Or that if your building 20th century you should move? (@Christian Busch

@Christian Busch @Khalid Bryan How do you think the changes to the condo association inspection reporting and reserve requirements are impacting the market? Are people getting spooked out of older buildings / concerned about huge assessments? What's the ratio of these properties in the market?

Also, to what degree are people reacting to the new insurance rates? We were looking at a $115,000 condo, but the insurance deductible was $25,000!