All Forum Posts by: Konstantin Ginzburg

@Dominique Gunderson

I have kept my buy and hold properties under an LLC. I was initially purchasing properties under my personal name and transferring them with an articles of transfer that my title company's lawyer drafted for me. I am not a legal expert but you may be able to do something similar to transfer your properties to a different entity.

@Viral Jhayyy

You have to reside in one of the 3 units for one year. You can rent out the other 2 units immediately. After a year passes, you can then rent out the unit you are residing in and move elsewhere if you choose to do so. 

@James Figliozzi

My personal recommendation for first time investors is to start in your own backyard. This is the strategy I took when I began 2 years ago. Although it is possible to invest from a distance and many have been very successful with this strategy; it does open you up to more risk. You are more likely to be familiar with the city you actually live in, including the neighborhoods that are growing and the neighborhoods to stay away from. Investing locally allows you to self manage initially. While getting a management company as you scale is a great idea; managing your own properties for a time gives you insight and inexperience into this portion of the industry; which in turn gives you much more insight into what your managing company does, provide them with better feedback, and gain a better idea of what questions to ask them during screening. Regardless of whether you invest locally or from a distance; it will still be crucial to build a team prior to looking into properties. I always encourage anyone who does want to invest long distance to look for a boots on the ground team prior to looking at properties. That team will determine whether or not your investment is successful. I understand that investing in New York City is extremely difficult due to the price and regulations; but investing in nearby regions may be a more affordable option that will still give you some ability to have more control. 

@Colette Major

How are you marketing the property? Which platforms are you listing the property on? We have had luck placing our listings on Zillow and generally get several viewings per week. We also leaving the link to the listing on various FB groups that list available rentals in the area. Since you are listing a high end rental, you are going to be appealing to a smaller segment of the general population so revieing less inquires is expected but if the low showings continue, then lowering price could be required. An alternative is to try to switch to a medium term rental model and try to market to traveling professionals. If there is a major hospital or university nearby, then you can try to market to that group either through facebook or reaching out to the University's student relations board directly or the HR group of the hospital. 

Quote from @Michele Velazquez:

Quote from @Konstantin Ginzburg:

@Michele Velazquez

My general rule of thumb is that if you create a listing and there are no inquires at all within the first 1-2 weeks than the price is likely too high for the market at the time. Getting a tenant is easier in certain times of year. During colder months or the holiday season, people are less willing to move since they are likely more focused on the holidays. People are also less likely to want to move during cold weather since its an added inconvenience. This could be a part of the reason why you might be seeing a softening rental demand in your area. If you are not receiving any inquiries of viewing requests then you might want to consider lowering price to try to minimize your vacancy since high vacancy will destroy your profit margins. If your PM is suggesting a $25 per week reduction, than it might be a good idea to listen to them and regauge the market response each week. Assuming you have a good PM, they should have a solid understanding of the current rental market within your region. Although it might a good idea to ask them about what platforms or marketing strategies they are using. If the rental demand is low because they are not great at creating a good listing, then this is something you might able to help them with. My strategy is usually listing on Zillow and then sharing that listing on various Facebook groups for people looking for housing in a specific market. 

 I am pasting the screenshot of where they advertise and its a multifamily.  Do you see any issues?  How do I find a facebook group of people wanting to rent in the area?

 I have used Apartments.com and rent.com in the past and that generated some inquires but the overwhelming of our tenants have been through zillow.com so I am not sure why your property manager has that platform unchecked. I would advise them to begin using zillow as well. Also, take a look at their actual listing and make sure that it is well put together. How do the pictures look? Is the property described well in the listing as well as having all amenities included in the listing. There are a lot of facebook groups where people list their vacancy openings. Do a facebook group search for rental listings in the area you are trying to rent. Here is an example of a facebook group looking for rent in the Atlanta area: 

https://www.facebook.com/groups/197422767389467

@Mit Bush

I am sorry but I need to agree with the others on this post. Purchasing a property that is on a land lease provides far more risk exposure than I would be comfortable with taking on. If the actual land owner decided they are not interested in renewing your lease for the land, all the work and renovations you did on the property wind up benefiting them as opposed to you since they take ownership of the building in this case. While I might still push through with this deal, I would personally choose to get a lawyer involved with an iron clad contract that protects my investment in this scenario using strategy such as guaranteed lease renewals or require reimbursement in the event of a non-renewal. Without these in place, this would be equivalent of a tenant moving my property, paying to remodel my entire kitchen, and then me choosing to not renew their lease. While this may not happen, the risk is there and is outside the control of tenant. 

@Andrea Lopez

If your goal is to cash-out refinance in a few years, there is not likely much upside to putting your cash flow into the principle. There are two strategies people employ for investing. Those that prefer higher cash flow and are comfortable with higher debt, will try to minimize their home equity in exchange for having more cash on hand that they choose to employ to other things, whether its personal or investment use. The other strategy is to sacrifice cash on hand in exchange for putting more equity into the property and decrease debt load. This creates less debt exposure and is used my investors who prefer less risk since you often have more options to pivot if you have higher equity ownership in a property. Neither strategy is right or wrong; its simple a matter of personal preference and goals. Is your goal to maximize cash in hand or to own your properties free and clear sooner? What is your debt/risk tolerance? Those are personal questions so it would be hard for someone on the forums to answer for you. 

@Carlos Quiros

I own properties in both A/B and C neighborhoods. There is a very clear difference in the quality of tenants you receive in these two types of neighborhoods as well as the amount of work that you will be required to do. The general rule of thumb is that lower class neighborhoods should have high cash flow, this is because an investor will need a higher return on their investment to justify the increased time and attention that will need to go into providing housing in these neighborhoods. The increased cash flow is also with the assumption that your tenants will provide on time payments. From my experience, my tenants in my C class neighborhoods are late or behind on payments far more often than tenants in A/B neighborhoods and vacancy rates are also higher since evictions also become more common due to these same reasons. This winds up lowering the cash flow in these neighborhoods so the projected cash flow does not always match reality. While there are checks you can do to increase the likelihood of getting a good tenant, the probability of having issues is higher. This is all from my personal experience so you might have better luck in your area. If gunshots and police involvement is very common, then I would personally walk away from that neighborhood. It's simply not worth the stress and time-requirement for me and while there is higher upside for getting a higher return on your investment if the area is improving; the revitalization of an area is a multi-year process. My preferred strategy is purchasing the lowest quality house in a higher quality neighborhood rather than the highest quality house in a lower quality neighborhood. While large renovations come with their own headaches, its still much easier to fix a single house than an entire neighborhood and the upside potential for both strategies is similar as far as a return on investment is concerned. 

@Mike McGee

We have a similar issue in Louisiana now with insurance. There are a few things you can do to try to lower the cost of insurance but overall, it is simply the cost of doing business in these markets and simply need to be factored into your property assessments. The main protection you can try for selecting a property is making sure your properties are not in flood zone regions. In our area, the ideal flood zoning is "flood zone X" but I don't know whether or not this might be called something different in Florida. This is the zoning that has the lowest risk of flooding and will have the lowest insurance rates as a result. Talking with local insurers in Florida may also give you better insights and ideas into how you can minimize that expense for yourself. 

@Michele Velazquez

My general rule of thumb is that if you create a listing and there are no inquires at all within the first 1-2 weeks than the price is likely too high for the market at the time. Getting a tenant is easier in certain times of year. During colder months or the holiday season, people are less willing to move since they are likely more focused on the holidays. People are also less likely to want to move during cold weather since its an added inconvenience. This could be a part of the reason why you might be seeing a softening rental demand in your area. If you are not receiving any inquiries of viewing requests then you might want to consider lowering price to try to minimize your vacancy since high vacancy will destroy your profit margins. If your PM is suggesting a $25 per week reduction, than it might be a good idea to listen to them and regauge the market response each week. Assuming you have a good PM, they should have a solid understanding of the current rental market within your region. Although it might a good idea to ask them about what platforms or marketing strategies they are using. If the rental demand is low because they are not great at creating a good listing, then this is something you might able to help them with. My strategy is usually listing on Zillow and then sharing that listing on various Facebook groups for people looking for housing in a specific market.