All Forum Posts by: Michael G.

I recently had to go through this for two  three family homes built in the late 1800s - it was terrible. It appears the residential insurance market has hardened, I doubt we'll see the same low prices we've been accustomed to.

If your looking to place a policy on a two family home built before 1900, you should still be able to with little hassle but a steeper price. I recommend using a broker, they tend to get you lower rates as oppose to going direct.

I look at everything I can get my hands on! 

- All the popular websites (Realtor.com, Zillow.com, Trulia.com, Loopnet, etc....)

- County Auctions (both live and online via the upcoming schedule of homes to be auctioned)

- Tax records to see how much homes I've been following actually sold for. There could be a delay here so write them down!

My approach is to not depend on any single source - I've learned to consolidate the above and after years of tracking both the listings and what they actually sold for (county records).  This has allowed me to develop my own benchmark, making my analysis strong and more accurate. I must disclose, this is difficult and time consuming to accomplish for multiple areas (cities or counties) so i'd start focusing on a single area in which you have interest in. Over time repeating the above process will make you an expert in an area. You will begin to identify good deals and have confidence to accurately price an investment position that works for you.

This is why I said if you do your homework and put the time in, you will find a good deal. 

Personally, I am not a big fan of using Real Estate Agents for the purpose which you've presented to us: purchase of real estate for investment purposes.

Now I would like to be specific here as to not offend all RE agents and people in this forum:

I personally* (key word) do not like to use them as i believe if you are going down the route of investing you need to know what your doing - plain and simple. No one, even real estate agents, is going to hand you a "cash cow" in this business. Good properties, meaning solid investments FLY off the market - it is your job to find them. Now for the caveat, and one i'm sure people are going to bring up, is that developing a good relationship with an agent who is sharp and/or well connected can get you access to good deals. These relationships often involve you (the buyer) to have access to large quantities of cash or to have the ability to close quickly (hard money loans). These relationships, like many other things in life, also take time to build and develop. You may need to complete a few transactions before having access to this luxury.

My thought around this is the majority of real estate investors do not have the luxury of working with agents or connections like this - especially for investors who are new to this.

Per your experience in the SFH market, I think little may apply to the MFH market. I'm from NJ and invest in the MFH Jersey market (primarily north jersey) and i have to say it is tough out here. The market in north jersey is hot and extremely competitive - be prepared to be one of many placing an offer.

Put the time in. Do your homework. And you will find a good deal, I promise.

I would have to agree with Bob, don't be greedy!

If the existing tenants are indeed "good", and that could mean plenty of things like paying on time or they are just pleasant people, then I'd keep them with periodic rent increases upon lease renewal.

Increasing the rent drastically can get you in to trouble and affect your relationship with the existing tenant base. They may leave, become aggressive, or feel the need to all of a sudden bring up every issue they have in their unit.

You need to reflect on what is important to you. Perhaps you can test this theory out for the sake of self education and split your actions across all three options! 

Best of luck,

Michael

I think what George is trying to say is that the purchase is risky. Expecting any appreciation in 5 years is risky, let alone in a condo complex.

Another risk you are assuming, which I consider higher than average, is relying on renting a bedroom to a roommate. I'm not saying it cant be done, but it is certainly less attractive than renting  a conventional apartment. Financial damage from any vacancies you may encounter will be amplified in your case being that your property is being purchased with an expiration date (5 years you say?)

Personally I'd stay away from an investment of this type. It may work out for you being that youd have a luxury apartment as a residence, with a lower than expected cost of living there (compared to people renting luxury apartments). In this case I do not think the pros weigh out the cons. It's an aggressive play that may cost you.

I do however respect how you are thinking outside of the box! Unfortunately, this is just not my cup of tea.

@Tyshawn Best

@Bob Daniels said it best. I often reference county tax records for this information. I would warn that this information could be outdated at times - at least for my state's websites. To get the most reliable information I recommend visiting city hall to access deed and tax records. 

From the tax records on the county website it should provide the owner name and his or her registered address (hopefully this is their home or business). From there you can write a letter inquiring about the property or your interest in purchasing it. I also recommend going the old fashioned way and leaving a note on the door (the boarded up house) introducing yourself and your interests: leaving your contact information for them in the process.

Best of luck. There are a lot of gems like this waiting to be revitalized!

Hi Sri!

I love Harrison and would have loved to invested in this area when opportunities were readily available. Unfortunately, new investors looking to get into Harrison will be met with a HOT, and in my opinion overpriced market. A lot of the homes there (Singles and MFs) are old and can easily fetch well over $500k (typical price range for 2 units). New MFs (2 units) are selling for over $700k. While some savvy and risk tolerant investors are willing to proceed with a purchase of such a property - I cannot justify spending that amount for an old (and most of the times, very old) property. 

You find a gut-renovated property in Harrison for $500k and that's your deal!

Some alternative options you can exercise are to search for properties in neighboring towns which are exhibiting healthy growth (i.e. Kearny, East Newark, Newark). If you are set on Harrison, i recommend waiting it out to let the prices settle down a bit; the last thing you want is purchasing a property when its peaked to only see it depreciate over 10 years.

Best of luck my friend!

Everyone here is going to tell you something along the lines of "cash is king" or "cash flow is queen" (I think I got the phrases right?)

The problem with the C class properties that no one tells you is the rougher crowd of tenants you are likely to face. In my experience I took the route of "tougher barrier of entry" to ensure I was purchasing properties which would get in the middle of cash flow and appreciation. Finding that sweet spot is really the trick, atleast for me.

I've sacrificed a degree of cash flow (still positive, just not the ideal numbers people on this forum look for). But the area is thriving! People are lining up at the door to live in this city. These are the types of factors I measure when sacrificing optimal cashflow.

Best of luck! I do not think there is a right answer here. It all comes down to preference (as it often does).

Hmm. Good suggestion, but I'm wondering if that's even a viable option (meaning one that would be accepted by the city). The way I see it is, if that was an option, wouldn't it replace the expensive fire escapes property owners have been putting in and maintaining all these years? I'm not sure if i can substitute one for the other.

@Mike Kostner and @Theresa Harris I've thought about putting a door on the fence, but would that really help the situation? Expecting people to flee to safety via an extremely narrow space between two buildings (which I presume was not left there for that intended purpose) really a viable escape route?

I'm just trying to understand what type of laws are out there regarding courtyards and means of egress from them. For example, what if there were no space as the one described in my situation. would a fence be acceptable? 

How is this situation viewed for the many courtyards with no way of escape that exist in the urban areas around the country?