All Forum Posts by: Paul McCue

Hi @Nick Harbin! I sent you an email. I'm hoping you can help me out with a potential client. I look forward to hearing from you. I'm also wondering if you have a minimum loan size. Thanks!

@Mike Lambert I guess I misunderstood. I thought you were disagreeing with @Brandon Goldsmith's suggestion.

I don't know anything about getting a loan in Mexico, but I do agree @Adrian York could/should try to get one in the US, if that's what he wants!

@Mike Lambert, @Adrian York may qualify for a foreign national loan as @Brandon Goldsmith suggested. These loans are designed for people in his position.

@Adrian York let me know if I can help!

 That is true! Specific locations matter. I know some of the places students like to live, but for the most current info on that consult with someone who knows that niche well. Steph seems to know it well! I was just giving a general guideline, like it doesn't make sense to buy in Endicott if you're targeting students. LOL Close to school, bars, shopping, food, etc - those are generally where you want to be, and the closer, the better. If you are familiar with the area or just look on a map you'll get a good idea to start with. But again, talk to Steph or someone else who knows because there are exceptions!

My experience as a student at Binghamton: they rarely ventured any farther than Walmart on the Parkway or the downtown/westside area. Most of them didn't even know there was anything to Binghamton beyond that. That was 20 years ago, but from what I saw up until I moved away five years ago, I don't think it changed much.

Nice job, Ron! This sounds like a great deal that went well. A couple questions: What kind of "light renovation" work are you doing, and how much appreciation do you expect from that? Also, when you sell, are you marketing it as an occupied rental in order to allow your seller/tenant to stay, or are you just going to call it a single-family and leave it at that?

Hi Marco,

I lived and invested in the Binghamton area for 15 years and attended/graduated from BU. I live in southern PA now but my wife and I are still very attached to Binghamton.

The area has been changing some over the last few years, but I still feel like I know it very well. I am open to investing more in that area too. It's a great place to own rental properties!

I started by investing with with long term residential units. I've branched out from there and have now done more long term residential, flips, and a couple mortgage notes. I am also interested in private lending and am working right now on becoming a licensed MLO in PA.

Feel free to reach out if you want to chat or to talk investments.

--Paul McCue

Hi Chris,

I think it depends on what your target population is and where the house is located. Given the information you provided, it sounds like yes, it could be a good investment. At least on paper. If you are not local to the area, make sure you have people you trust in the area that know the neighborhoods and can look at the property. You could potentially be buying in an undesirable neighborhood, or the house may need more work than you think. Or it may not rent as high as you think. (In general, rent in that area has gone UP, mostly driven by increasing student rent and spilling over into the long term residential market. But Endicott is also not a popular student rental area.) Have you seen the house in person?

It sounds like you may not need an agent on this deal, but if you'd like to work with one, or want some additional help, I recommend talking to @Stephanie Jacobson. I have worked with Steph a handful of times, and she does a great job, particularly in locating deals, networking, and negotiating! She also knows a great inspector named Rick Kie with Accredited Home Inspectors. He's not on BP as far as I know. I worked with Rick on the last purchase we (almost) made in Endicott (I was very grateful to him for being so thorough!).

I am a detail-oriented person, and I also emphasize quality in any property I buy, particularly in regards to the foundational aspects - foundations, roofs, structural, plumbing, electrical, etc - the non-cosmetics. They may not bring in higher rents, but if you ask me, they are much more important.There are certainly deals in that area (Endicott, Johnson City, Binghamton, etc), but there are also a lot of properties with - ahem - deferred (or just plain improper) maintenance. Just be sure to do your due diligence.

Also, take a look at this thread from earlier this year:

https://www.biggerpockets.com/forums/55/topics/813778-newbie-investor-looking-to-finally-jump-in?highlight_post=4785202&page=1

You're right. Endicott is not a popular area for student rentals because of the distance to the schools, but I had heard of a few. They might have been graduate students? Or maybe locals? I don't know. It might be a hard sell for a landlord to convince most undergrads to live that far out. It's not far for anyone with a car, especially if you're used to the area, but students are different. Were the vacancy figures you found specific to Endicott or the whole greater-Binghamton area? It just seems so high...

Your water/sewer guess is pretty close to my estimate. Based on my experience, I'd have estimated $180/mo for those 8 bedrooms. I think rates might have gone up in the last few years since I left, but I'm not sure. So it could be a little higher and is also dependent on the building and the tenants. So you're in the ball park. Maybe bump that up a hair, but it's not bad. I assume you have no other owner-paid utilities. Remember, if you have high turnover (although I hope it's not as high as your estimate!), your utility costs go up too since you pay them during the vacancy. You can call NYSEG to get actual numbers. I don't know if you can do that for water/sewer, but I think you can; it might be worth trying.

I estimated my vacancy based on the number of months each unit was empty between tenants (usually about 1 month for turnover, if my memory serves me correctly). Over about a 15 year span, I had about 5 turnovers per unit. So roughly 5 out of 180 months. (I did month to month and had a couple of shorter stays, but mostly long term. Long term tenants are great! There are reasons why students and people in high turnover/high maintenance neighborhoods pay more in rent.)

In my opinion, your numbers are fine. You didn't mention insurance, so don't forget that. Using that high vacancy estimate will keep your numbers safe. As long as you have accurate figures for monthly rent and the property is in decent shape (which you said it is), it sounds nice! As I said before, the things I'd double check are neighborhood, condition, and rent. I've looked at more than one house that seemed fine at first but had major structural problems. I'm not opposed to buying and fixing them, but because of those the financials didn't work out for me.

Bottom line: Without knowing the exact property your purchasing and researching it myself, I can't say anything definitive. I just thought I'd try to help, but it sounds like you know what you're doing. And seriously, if you're working with @Stephanie Jacobson then you're in good hands!

@Joseph Pichardo, if the ROI is that high, especially with a vacancy rate that high, I suspect you're probably missing something. I'd take a closer look at the neighborhood and the condition of the property. There could be a lot of deferred maintenance or required ongoing maintenance (particularly if it's in a bad neighborhood or is a student rental). Those maintenance expenses could be hidden costs that you or the seller may not be accounting for. Deferred maintenance is also common in that area.

The neighborhood, condition, management, and student vs full time residence will also drive your vacancy rate. Can you ask the seller what their experience has been with that property? While you're at it, do you have the actual rent amounts or just estimated?

Another thought - I'd also check on the utilities - maybe they're higher than you think?

I'm suspicious because the Binghamton area is a good rental market, but it's not usually that good. Then again, perhaps you stumbled upon a great deal! They do exist, but I'd still look closer. What's the seller's reason for selling?

Also, the reason you found such high vacancy rates online might be because of the number of student rentals in the area. Student rentals skew everything! Is the property you're considering currently a student rental or full time residence, and which are you planning to use it as? When I owned property in that area, it was always full time residence, well maintained, and self managed. My vacancy rate was less than 3%. That might not be a fair comparison though, as I suspect that's outside the norm. @Stephanie Jacobson can attest to that.