All Forum Posts by: Michael Gansberg

Hi Josh Robbins and James Wise, 

Sorry for the slow answer, I just noticed your questions. 

Josh- I highly recommend investing in Troy, it is a very landlord-friendly environment. The rules and regulations are not overly restrictive, and the eviction process is not extremely onerous. Cohoes, unfortunately, is quite the opposite- their code department is less than reputable, the eviction process is incredibly expensive and time-consuming, and the real estate prices reflect that sad reality- smart investors want little to do with Cohoes. I have no assets in the Watervliet region(not for lack of trying,) so I can't directly recommend it, but I can say that what I've heard from other investors suggests it's a good place to invest, and should the opportunity present itself, I would invest there.

James, I published Rentals To Riches through CreateSpace on Amazon.com. It's a fairly simple process, the two hardest parts of it are writing your book and formatting your book, not necessarily in that order. Once you've written it, it's fairly inexpensive to pay an expert to help with formatting(though I did it myself. Probably an error, in retrospect.)

Good luck!

Hi Beth,

If I were in your shoes, I think the least messy way to do it is as follows:

Your grandma purchases the home(I'm assuming from your question that your grandma can purchase this home with cash. If that's not the case, my answer will be pretty worthless to you.) She then turns around and sells it to you, and she gives you a mortgage.

So for the sake of argument, let's say she buys the home for $100,000 in cash. She then sells it to you for $100,000, and asks for a certain percent down- let's call it 10%. You give her $10k, and have a mortgage of $90,000, the terms(interest rate and duration) to be decided upon by you and your grandma. Grandma will benefit from having a monthly interest and principal payment from you, which I'm sure will be nice if she no longer is in the work force.

If she passes away at any point during the mortgage, you'll still be responsible for making the mortgage payments to her estate.

While this is the least messy way I can see to accomplish this, it's far from clean. I'd recommend an attorney for granny and one for you as well if you decide to pursue this course of action, good luck with this,

Michael

Hi Heather,

Interesting question. In each case, your monthly rental income is approximately 1% of your expected purchase price, and in each case, the annual taxes are slightly less than 1% of your expected purchase price. So I'd say both houses tie on those metrics.

Both neighborhoods are nice, so that would appear to be another tie, but it looks like you may have a slight preference towards the neighborhood the second house is in- so let's say the second house gets a point for that.

But here's the main distinction, and why I'd probably go for the second house, if all else is equal(and let's be honest with ourselves, when is all else ever equal?) 

If you're correct in that the second house is likely to attract families, and the first house will be more likely to attract single military guys, which type of tenant would offer less turnover? I think families tend to keep one residence for quite awhile longer than single military guys, who may ship off at a moment's notice. High turnover can be a killer to your ROI- imagine having to repaint the house once every year(with frequent move-outs,) versus once every four to six years? And every time there's a turnover, you'll have to re-rent it(either by showing it yourself or paying someone else to do the showings.) Plus, frequent turnover leads to higher vacancy rates.

That's my two cents, good luck and hope you close successfully!

Michael

Definitely- my current preference and focus is the 2-10 unit space, though that will likely change in the near future, as I'm seeing opportunities in the distressed commercial space.

And I've been in residential for a long while- it would be nice to mix it up a bit.

Hi everyone, I'm an investor primarily focused on the Capital District, with a concentration in Troy, NY. But I go as far west as Buffalo, as far south as Hudson, NY, and as far north as Mechanicville, NY.

My primary business line is acquiring distressed two to ten unit properties(though I've picked up a few single family homes and also acquired a few larger projects,) renovating them, and getting them fully tenanted with very happy tenants. Of course, it's the last part that is the biggest challenge.

I've written one book on real estate titled "Rentals to Riches: Making Money in Multifamily Real Estate"

I have experience with Lendinghome. I attempted to refinance five rental properties, and found their process to be incredibly onerous- more documentation than my local neighborhood bank, plus my neighborhood bank offers loans at 5%, where Lendinghome clocked in at roughly 8%.

I thought I'd try them anyway- it was a small loan, and I didn't want to bother my neighborhood bank(they regularly provide financing for me on residential/commercial properties above 4 units in size, this deal was a bit trifling for them,) plus Lendinghome's site suggested a fast and easy closing process, which as noted above, turned out to be anything but the case.

The appraisals came in dramatically lower than expected. Prior to receiving the appraisals, I asked the Lendinghome representative what would happen if the appraisals were too low to make financing viable. He stated that a full refund of my five $199 application fees(yes, that's $995)would be provided.  Turned out that he changed his mind- the appraisals were low, I suggested as much and asked for a slightly higher valuation, he said Lendinghome couldn't do that, and further, since Lendinghome put out money for the appraisals that they could not refund my application fee.

To add insult to injury, he stated that at least now I have five appraisals worth $450 each. The appraisals, in my opinion, are incorrect, so I can't imagine them being worth $450 per- further, who could I sell them to? Having no use for them and being unable to sell them leads me to think that they surely can't be worth $450.

It's also interesting to note that Lendinghome suggested the appraisals were a starting point on the road to a proper valuation, and that there was some wiggle room. When I suggested raising the valuations by a bit over 7%, Lendinghome told me to have a nice day and that they could not make the loan.

So, in conclusion, I must warn consumers away from Lendinghome- deceipt and personal finance do not mix well.