All Forum Posts by: Matt Riggi

Hey @Eric P.,

It's going to be difficult to find a straightforward answer to this since there are so many variables that will impact a PPSF number. As I'm sure you're aware, construction costs are incredibly specific, with costs attributed to a multitude of line-items. What's more, the bids you receive from the contractors/vendors for specific components of the reno will differ, as well as the co-op's policies towards renovating, further compounding this variance. 

It will be important to go into this project with a very accurate forecast of what it's going to cost you and how the renovation budget relates to your end-goal for the unit. The best way to do this is to identify individuals and other sources you feel you can trust, who have the capability and resources to predict these numbers down to the last penny. Do you intend to manage the entirety of the project yourself? 

The organization I work for has completed about 600 gut renovations of townhouses/brownstones in NYC, and with a sample pool of that size, we typically run costs of $300/sf at a minimum. Obviously, those are very different kinds of jobs from what it sounds like you're planning on doing so I'm not sure how helpful the number will be. 

Anyone have good recommendations for sources of knowledge/information on creative ways to structure and negotiate partnerships. 

I'm also very interested in learning more about strategies for brokers who want contribute their commissions to deals.

Thanks for any help on these fronts!

Hi Mary,

Considering the brevity of my career in RE, here in NY, I'm not sure that I'm the best person to answer your question. I'll try to explain my perspective so far, though. 

I'd like to first pose the question of why you're even considering going after what I'll assume will be your salesperson's license, and what's your intention once you obtain it? Would you like to work for an agency full time? Your answers will likely impact my opinion.

As for your point on the competitive landscape of our market, there's definitely some truth to the Pareto-esque quality that exists, in that a very small percentage of agents are the ones doing a very large percentage of the transactions. I don't think this comes as a surprise to anyone and I'm inclined to believe the same holds true for many other industries, whatever the variance in proportion those are. That doesn't necessarily mean there aren't good careers to be had. I deal with on a daily basis, individuals who are entirely incompetent, representing reasonably competent people, and I have to believe that the nearly non-existent barriers to entry and the recent romanticism of the career are the major contributing factors to the aforementioned ecosystem. 

Take what I've said with a grain of salt. I've had a short tenure working on the agency side. Recently coming out of college with a considerable amount of student debt, working as an agent for a brokerage wasn't really feasible, so I opted to work for an RE investment fund.

Hi all,

I'm quickly approaching the expiration date on my salesperson license and that means I need to select a bundle of continuing education courses. Does anyone have suggestions on courses they came away happy with? I know licensees typically just want to get this out of the way but I really want to take something away from whichever course I choose. It would be even better if whatever I go with leads to some sort of certification or designation. From what I've come across, most of the sites offering courses that fulfill the state requirements contain subject matter that's relatively basic. Humbly, I feel as though I have a fairly reasonable foundational understanding for what many of the courses offer, through my self education and work experience, so I'm looking for something that goes a bit beyond this. I've even checked out some of the certificates I could go after at either NYU or Baruch. Topics of interest include:

• Creative financing
• General investing
• Negotiating 
• Deal analysis

I was even considering getting started on the CCIM track, however, I don't believe I'm at the stage where I have the transaction volume to meet their criteria. Any help is much appreciated!

@Gil Pang That's a common misconception about FHA loans, likely because they're marketed as a great product for first-time homebuyers. You'll need to owner-occupy for at least a year, and I believe you can't have more than one FHA loan outstanding with an LTV of 75% or greater.

Hi @Gil Pang , Nice to e-meet you. It sounds like you and I are in somewhat of a similar situation. When you say, "immediate area" are you referring to Bayside specifically? I'm not incredibly familiar with the area, but I know Bayside is more of an upper-middle class, well-established neighborhood. I know there are several markets that are no more than a 15-minute drive from Bayside, that are potentially more affordable and theoretically, have more upside. Have you considered any of those? 

I'm beginning to look into the possibility of using an FHA loan on a property somewhere in your area, as a means to my first deal. Working in downtown NYC is making that a bit of a challenge...

Hey @John Hickey, glad to hear you've reaped some of the same benefits of investing in Bed-Stuy as we have! Curious to hear more on your intended sale of the townhouse. We purchase nontraditional rowhouses all the time. I can name several off the top of my head with vinyl, brick, etc. facades. A little extra curb appeal, by way of a more quintessential brownstone/limestone house never hurt, though. 

To answer your questions - 

The fund began investing at pretty much the trough of the downturn, in 2011 thankfully. Primarily in Jersey City and then expanding into Brooklyn and Harlem. 

As far as ROI goes, that's tough for me to answer. I really don't have access to the specifics I'd need to give you a good estimate. Our numbers would be a bit different from yours' because our transactions are always all cash. We also dump a ton of capital into the renovation, upon acquiring, as the objective is to achieve record rents, while simultaneously creating a product which will be easily sold to an end user. In BS, we're getting rents anywhere from mid $8k to high $10k, dependent on the property and block.

Best of luck with the transition into a new market and trying out a different philosophy. I've definitely seen the pros and cons of going the single family route, first hand...Do let me know if you'd like to sit down and talk shop sometime. 

Looks like I'm a little late to the thread, but I've spent the past year working for an Australian REIT, specializing in buy and hold investing in the townhouse market. To date, we've completed over 700 full gut reno/rehabs, and typically convert our brownstones to single-family residences. I'm not a construction professional on our projects team, but I do spend a fair majority of my time collaborating with that department. Happy to answer any questions if I'm able to!