All Forum Posts by: Kyle Joseph

Hey @Cole Britting, good for you for making the best of a tough situation.  As you suggested, I would recommend you meet and connect with as many people as possible. Although meetups are all virtual at the moment, some still provide an opportunity to introduce yourself and get to know some people.  If you have any skills you could offer these groups to help them operate with this new virtual model (IT skills, calendar/scheduling, etc.) that may be a good way to get involved.  I would also recommend you read books, articles, etc.  Not just on wholesaling and real estate investing, but also educate yourself on what's happening today.  Happy to make some meetup or book recommendations, just send me a message.

Thanks,

Kyle

@Jonathan S. I've looked at deals like this before too, as I've targeted some owner-occupied multifamilies in my area with older / long-time owners.  I've shied away from pursuing these deals because I do think it could lead to issues with a long-time owner converting to a renter. I'm sure there's some success stories and I'm also sure there's some horror stories.  You've got him on the hook, which is great.  I would stick to your guns and don't give him the optionality to stay beyond 1 year without your approval.  Not that I necessarily encourage you to incur unneccessary costs, but is there an avenue where you offer to pay for a leasing broker to help him find a new place to live in lieu of him staying?  Or some way to make the move for him as frictionless as possible.

We had 100% collection on April and May on our 3-unit property in Concord NH and had two tenants renew their leases.  They are all inherited tenants - I will be closely studying the previous owner's application and screening process. 

Glad to hear that on average, people seem to be surviving and seeing some semblance of "normal" in the future.  I've been looking at a vacation rental in a town that I typically vacation in, but it's a challenging time to underwrite short-term/vacation rentals given some of the near-term uncertainty around bookings. I would think over the longer-term things will return back to normal, as I don't see this changing the behaviors of vacationers in the long-term.  Short-term economic behaviors maybe.  But I would venture to say a stand-alone vacation rental should be and "feel" safer than a hotel room since your not in as close proximity to other travelers, so that could bode well for short-term rentals in the near term.

How are the short-term rental / AirBNB investors faring?  At what point in the future are you seeing your bookings start to pick back up?  Are locals picking up any of the near-term unmet demand?  How are pure vacation rentals doing vs rentals in urban areas?  Admittedly do not have any short-term rentals, but am curious to hear how people are navigating the current climate.

I agree with some of the other posts.  First, make sure you have enough cash flow from your current job and investments to cover your existing bills + a healthy savings rate, especially in times like this with weakened job security.  Then, for me the consideration is comparing interest rates and return rates.  If you have an auto loan that has 2% interest, or a real estate opportunity that produces 8% , the better use of your money is buying the real estate deal for the 8%.  But remember, the 2% interest is a guaranteed rate of return and the 8% is not.  So that spread needs to be big enough that it's worth the additional risk.  If you have a student loan at 6% and real estate deal at 6.5%, then you may choose to take the guaranteed 6% return by paying off your student loan, even though your real estate deal shows a higher potential return.  And remember, buying a real estate deal means that you need extra reserves specific to that deal. 

@Frank Rubino Running with @Jessica Stevenson's comment because I too like NH for those reasons ... Personally I invest in the Concord market.  It has a solid recession-resistant employment base (#1 state gov and #2 hospital system) and I think Concord has done a great job investing in and revitalizing its downtown over the last several years, making it an attractive urban area.  That said, I've tende to find smaller multifamilies, 1-4 units, in Concord.  If you're looking for 4-12 unit complexes and will have a time restraint (1031 exchange), I would suggest looking in Manchester.  Manchester tends to have larger properties (I don't have numbers to back this up but that's my perception based on my experience in these markets over the last 3-4 years).  I find Manchester to be a little spotty with pockets of crime in the downtown.  You should be able to find your 4-12 unit property though. Just do your due diligence on location.  Location block by block matters.

@Niraj Gawli I can take a shot at this, but let me preface it by saying I highly suggest working with an attorney when you begin to negotiate the PSA.  Wording and particulars in the PSA will be everything.

If you are making a non-binding offer, I think your way of wording is on the right track. Purchase price of $XX, subject to zoning contingency. Have a section in your offer that elaborates on the zoning contingency that effectively says that closing is subject to the approval of whatever you want (XXX SF, XXX FAR, XXX units, etc.) by the city of Somerville. You and the seller can agree to the premise of the deal with the LOI, and then iron out the particulars on the definition of "approval" with an attorney's help.

In terms of your questions about deposit, option payments, closing date - it all depends on the specific deal and how much leverage you have.  You'll likely need to make a deposit but you should make the case that it doesn't go non-refundable until you get the zoning approval you need.  I would propose closing to be a certain number of days following the approval.  And I wouldn't propose option payments until the seller tells you they want them.  All part of the negotiation.

Again, every deal is different and I tried to remain high level since I don't know the particulars of your deal.  Happy to chat more about the particular deal if you'd like.

Hi,

I'm reaching out to see if you, or anyone you know, is interested in doing on-call handyman work for a 3-unit property in Concord, NH.  I'm looking for someone who has general knowledge of plumbing, HVAC, electrical, etc. that can tend to maintenance issues and escalate to a specialist when necessary.  I will provide good compensation for the work and ultimately would like to have a partner as a grow my portfolio.

Please reach out if you or someone you know might be interested, thanks.

Kyle

@Bill B. My understanding is that you would get an umbrella policy for however much you may be liable - for example, If I'm worth $1M but I'm sued for $5M, without an umbrella policy I would be bankrupt.  But if I have a $5M umbrella policy, which is significantly more than my net worth, the insurance policy would pay the $5M and I would keep my entire $1M.  

Related to my first question in the thread, let me give you a scenario - I get a conventional loan, and in the loan the bank gives me permission to move the property into an LLC and if I do I am personally guaranteeing the loan. Now let's say something happens and I'm sued and they take all the assets in the LLC (property), does that mean I would have to pay the bank back the loan balance and the party that sued me would get the property free and clear? Or would they get the property, less the principal of the loan?