All Forum Posts by: Ryan Jopson

Good Evening fellow BP members;

Looking to obtain some general feedback in regard to property management in the Western MA area. Specifically Hamden and Hampshire county.

What rate are you paying your PM company. I've found the average to be between 6-10% but looking for honest verification on this. Does your rate, or quote on rates; increase if the property is larger (4+ units) or does it stay the same if the property is a smaller multi (1-3 units) ?

What hourly rate are you paying for general maintenance and repair jobs? Does your PM call you for the "go-ahead" before the work is done?

Are you paying the standard leasing rate of "1/2  the list price"; for your PM to find a tenant for a rental? Are the quality of tenants found by your PM company up to standard? Or have there been issues

If you had to rate your PM company on a scale of 1-10; without using the number 6--what would it be?

Eager to hear what people have to say. As always; thank you for your time and contribution to the forum.

@Mike F.

"Investment Purposes" seems to be a practical and simple answer that gets the job done

@Joshua Feit

If it generates that amount of cash flow it will always be worth 80K, + or - to some investor out there. If its an absolute nightmare; wait it out 5 or 6 years until you get your 80K out and then re-sell. Your re-sell number is your true profit.

If your level of certainty is high that it will re-sell for somewhere in the ballpark of 80K; then I'd pull the trigger.

It really is just a different angle of thinking about the deal. Maybe it will help put things into perspective.

What are your thoughts on this?

Ryan

@Joshua Feit

Is the deal listed on the public market? Any indication why the current owner is selling if the property truly generates the numbers posted above? What % of the tenants are on subsidized housing or some other related program? Do all units have separate utilities? Have you personally walked the property/street yet?

Kindly,

Ryan J

Good Evening,

Comments/concerns/questions always appreciated;

Over the past few months I've been paying close attention to the Holyoke, MA market. Noticing a consistent rise in Holyoke multi-family property values, I thought it would be beneficial to ask if others share the same like-minded opinion?

After diving deeper into the forces driving the current state of the market, I continue to ask myself the following questions;  

-What is propelling this surge in value?

-Are rents justifying the increase or is there a variable factor playing a significant role that I have yet to distinguish?

-Are investors more heavily weighing the appreciation benefit over cash flow?

I've seen 2's and 3's go under deposit in a matter of days. That is; 2's and 3's listed for north of 250K. Are these multi's going under because Holyoke is becoming a more desirable "owner occupied" city. Or are investors settling for a "nicer" location with decent rents and quality tenants rather than a purely cash-flow vantage point.

Even if the Holyoke market is seeing rents in the $1200-1300/month range; is this a worthwhile justification to paying a premium on these smaller multi-families?

I often ask if paying $100-125K+, for a turn-key unit, is a more financially effective play compared to buying a rehab/remodel project at discount. I understand a rehab/remodel project carries a far greater risk, but aren't your returns going to be much more enticing?

Thoughts, insights, or comments about anything regarding the Holyoke, MA market are much appreciated. Generally speaking, it is always nice to see the area receive the recognition it truly deserves. As I do whole-heartedly believe the potential and opportunity in this area are fantastic.

Kindly,

Ryan J

@Jeff Bousquet

@Dan K. hit the nail on the head in his summarization of the Springfield area. His pro's vs. con's overview couldn't have been said any better. I will add a bit more below;

The casino project has portrayed a great deal of "hype" with many of Springfield's investors/residents/community. Of course any incoming project of this magnitude will generate a vast amount of speculation, but personally I do agree with the popular opinion on the positive impact it will have. The casino receives ALOT of news coverage. There are multiple billboards spread across the surrounding counties and advertisements everywhere. Overall, I believe it does have the  chance to push property values as well as rents northbound. The amount of new jobs has already begun to stimulate the economy and small business growth.

"Attractive cap rates and medium to low vacancy" is spot on. Cash on cash returns can be found north of 15-20% in some situations. However, something important to note in this aspect is deferred maintenance. There are many older/outdated properties that are not properly cared for but may appear attractive on the surface. Burnt out landlords and mom&pop operations are also prevalent in the area.  Subsidized housing and different types of housing programs are also very common. With that, having properties de-leaded is something that any investor should very much consider as all of these programs will require it.

Like Dan mentioned, a lot of properties do have separate utilities. Something to pay close attention to is making sure there is a separate owners panels in 3+ unit properties. Here and there you will find common electric or gas meters on the tenants meter. This is cause for concern as there is liability you as the landlord hold if you fail to disclose the meter is connected to the tenants unit.

I would advise making sure you have a trusted, fully vetted property management company in place as you are bound to run into tenant issues, evictions, etc. Like Dan mentioned some properties can be "management intensive" so make sure this is accounted for when running your numbers and setting aside reserves.

Short term appreciation is almost non-existent. Especially in the smaller 2-3 family properties. There are some surrounding counties that have seen a major boom in appreciation over the past couple years but Springfield is not one of them.

Yes you will cash flow from day one if you "buy it right". This is a very sought after attraction that the Springfield market encompasses.

In addition; there are some "pockets" of the Springfield area that are far superior to other locations. In general, the city does vary from street to street. There are certain neighborhoods that I would strongly advise against. Driving or even walking the locations at different times of the day is one true way to get a sense for what it is like.

Ryan J

@Matthew Stanizzi

Completely understandable, how is the market up your way in New Hampshire?

@Matthew Stanizzi

Have you considered the Western, MA market at all? More specifically Hamden or Hampshire county. Send me a PM if you want to talk about this market more in depth. I would be more than willing to provide you with a general background of the market

Kindly,

Ryan J

Good Evening @Danielle McKahn

Any interest in a Chicopee tour?

Welcome @Tyrese Stroud, anything the BP community can assist you with?