All Forum Posts by: Account Closed

I don't know what's going on but people have money and will shell 500K on a studio in Manhattan. I know a REA who does hi end sales and always posting about closing a deal. The point is. People want to live in Manhattan and will pay for it. I see a lot of buildings bought being converted to Co-Ops. Or investors will buy a dumpy home in Flatbush Brooklyn and build a 8 floor apartment rental. I am living next to a construction site where my windows are not blocked out. I can frolic in the construction site if I wanted to. It's that ridiculous in what they let them get away with. I had to complain to 311 multiple times before they did anything, best they could do is fine the hell out of them and issue a partial stop work order to not work within a specific amount of feet from the windows in my apt. But I digress. Not sure what the cash flow is and ROI on these things but to be honest they are just picking at scraps at the moment IMO. The vacancy rates will be NIL in NYC. People will live anywhere. It's another world here. As for the .1 percent buyers. My wife has worked with some of these people as a Pilates Instructor. Someone owning a building next to Columbus Circle. They have so much money its not necessarily about cash flow for them I feel. Its about image or selling on appreciation, because lets be honest NYC is appreciating constantly. It's a gamble of course but are we the uber rich here? I've heard of the Rich Chinese coming over and buying condos but in that article it states its a status statement as much as owning a ferrari or rolex. It's pure insanity. If you could afford to buy a brownstone in NYC and keep it the point is it will appreciate, you'll be living in an amazing city, and when you sell you can move to the middle of nowhere and buy a mansion. The market here is insane. But when I see NYC prices in Boston I get a weird feeling in my stomach. For many reasons but part of it is maybe more people want to live in NYC not in Boston among other things regarding making it big and living the NYC lifestyle.

Thanks Ray and Lucas. 

I don't know who the agent is. I think they gave us a figure of 300/350K after renovations. It is marketed as a 3 bdrm 2 bath rental property. 

It sits in zone AE 12' based on the MapGeo interactive map. I don't believe there is flood insurance at the moment which for me boggles my mind. There is no mortgage so it isn't mandatory, but I would think necessary.

 My biggest gripe is will this home sell.

It was pitched to me to live in it for a few years and then sell to move to a larger house to nix the capital gains. Of course that means I take out a personal loan to pay off my father. But my worries are flood zone which means mandatory flood insurance and it being quite small. It's a great starter house, near the Red Line and highway, great renovations, 2 car garage, 2nd floor deck. The flood zone and insurance is always the thing that makes it undesirable. Having seen what Hurricane Sandy did to NYC and Long Island. I felt it was a strange investment. That just is my gut reaction to the place. Not sure if other people just don't worry about it and see it as a good deal for a first home.

I rather sell this house or 1031 for another rental property. I can't bank on taking a mortgage on the house and living it it for 5 years to sell to make a profit based on the flood zone. 

I just listened to the Waldo episode and maybe that is just playing in the background too much in my head.

Best regards,

Justin

Hi does anyone have experience having a SFR in a FEMA flood zone. The reason I'm asking is that my father invested in a property in a flood zone. It was bought quite low for about 125,000 and had about the same amount put in to fix it up. A 250K house total. Top to bottom work. New sidings, fixed up detached garage with new floor, new concrete driveway, removed oil burner in basement replaced with new HVAC system, a 2nd story deck was added. New Kitchen and flooring but wasn't sure if it was a floating floor which I'm not in love with. Really nice job but there are some things I see that rub me the wrong way.

1. It's a small home 1010 sq ft. I'd say a 2 bdrm with an office that can be turned in to a bdrm with 1 regular bath in the 1st floor and a strange sort of attic bathroom where they have a sloping roof line for the shower. More like a tiny bathroom on the 2nd floor to accommodate 2 bedrooms which seems awkward to me. I'd like to really make it nicer with glass and tiling but a pig is a pig. The 3rd room on the 1st floor can be used as an office or a small bdrm. 

2. It's in a FEMA flood zone. Potential for resale is hard for me to see happening. There is a sump pump in the basement.

3. Landscaping. There is a wet spot in the yard as it abuts a city owned tiny plot overgrown with tall 12 foot reeds. It is quite an eyesore and not sure if I should invest in a rain garden landscaping to make it more beautiful. Of course the new owner will have to manage it and not sure if that should be included in the house for sale. But might make it more salable. 

 I would like to add better looking shrubs, bushes and trees around the house. But not sure if that is something investors do. I like to garden and one of my passions is to one day do some small scale agriculture/homesteading. 

Quincy seems to be the next "hot" market I feel in the future. As Somerville, JP, waterfronts, Southie, and South End seemed to be filled to the brim with new hi rises. I feel like it'll burst but there has been such a demand for condos for years that maybe I'm just being pessimistic. Now living in NYC and I feel the market just doesn't stop. Was out priced in Astoria Queens and planning on leaving to make a go at it with the family real estate holds in Boston. What I see successful are Buy and Holds in big cities and banking on appreciation. Which is what it seems to be despite hearing the advice of to never bank on it. 

Anyone have any suggestions. I'm thinking the house can go for 350 only if some of those quirks are fixed up. It is being rented now but I think under 2000 which I don't think is enough IMO. The 1% rule would mean 2500 a month. Also no mortgage so cash flow is all used to cover expenses. Not sure what those are as it's a turnkey property pretty much. 

Thanks all,

Justin

PS I'm nervous sharing all this info I know this is a very sharing community but part of me feels awkward about it. Maybe a newbie thing. Already some members have given a lot of great advice so I appreciate it. 

From what it seems big city investing is tough especially starting out and having no to low money. I am considering partnering up with my father to purchase a multi family live in home to get going with my personal portfolio. I have a deal right now just to live in the families current residential in downtown Boston, learning the ropes of property management as my day job. I know that is taking away some cash flow. I'd eventually transition out to a private property to raise my family (I need a yard for my baby girl) but would like to have it as an investment as well. Part of me sees the cons of a multi family is lack of privacy and dealing with tenants, but I figure if my ducks are in line and I screen properly I can just have cash flow on the side, my own place to live, and then help manage the property in town. Eventually leave the multi family for a bigger place and maybe sell it down the line. Not really sure how many years this plan would be. Anyone have suggestions or realistic time line?  Personally want to move out to the boonies few hours from Boston with land and a cob house and large garden and some sort of retreat center, and manage from afar taking over the family business and having my own multi family to manage. I'd like to delegate to property managers or live in property manager so I have more time to spend doing my other ventures with my wife. I'm just throwing out a number of a 10 to 15 year timeline estimate if all goes well. Any thoughts and is this too ambitious. I feel I just want to start somewhere build up and then delegate work after it stabilizes to have more free time. 

Cheers, 

Justin

Thanks Dave,

That was a mouthful of terminologies I had to google. I'm not familiar with a lot of the lingo or those rules. Wish there was a cheat sheet somewhere. What does "Productive Use" mean? Would renting out a SFH be considered Productive Use? Would just holding onto an empty lot be Productive Use?

But yes the Lease Hold exchange sounds very complicated and would have to consult a lawyer about that. At least it is an option albeit complicated one.

Not sure the plans moving forward but I heard elevators cost about 250 grand. I think there is more then enough equity on the building (if I'm using the terminology correctly). But after this improvement it'll just up the value of the building throughout. A necessary improvement that needs to happen. 

Has anyone dealt with an area in their yard that is always wet? The Single Family Rental house is along the shore. Not far is the Neponset River so based on that geography the developments in that area are on marsh land I believe from way back when and prone to be wet. The yard slopes slightly downhilll and abuts a wetland sort of area with tall reeds overgrowing on the other side of the fence. I think it's a real eyesore and would love to rehab the landscaping to make it more appealing for a future sale but don't want to spend a ton of money. I'm thinking of installing a rain garden in that corner of the yard as it is basically unusable for anything else. Thinking rock garden, water tolerant flowers and shrubs. Landscapers with sustainability in mind  with this experience would be helpful. 

Best,

Justin

I'm in the process of joining the business with my family. I'm new to all this real estate investing and management, but I figure it's pretty common sense and takes some creativity. Anyhoo, 2 major things that stand out is that both buildings need new elevators. One has been out of commission since I have always known it and the other is slowly failing (still works but it creeps me the hell out) It seems like it is a really big but necessary investment and not sure how to approach funding it. I suppose refinancing on the 1 or 2 buildings or selling off a single family residential or some residential lots that are small money pits could help. I'm trying to see how to avoid capital gains taxes from property sales to off set elevator costs. Would a 1031 Exchange apply? Cash flow is good on both properties and both properties have no vacancies or just 1 or 2 units are vacant for commercial property. All in all I'm trying to patch up loose ends and get this big things out of the way. Just not sure how long the investment will be and when I'll be back in positive ROI.

Any advice is appreciated. I've heard on podcasts people spending thousands on Capital Expenses but nothing on the level of a new elevator. If anything it'll teach me a lot in the first few years of property management. 

Cheers,

Justin