All Forum Posts by: Ryan Blanchard

Update*  Thank you for all of the honest and informative feedback everyone! We have decided to dissolve the deal for the home in New York and start focusing on better properties in the VT Market that have a potential for immediate return on investment. Rather then trying to predict equity gain, all of the feedback is appreciated and without a doubt helped to get us to what we consider the right decision. 

Thank you,

-Ryan B.
 

@Joe Villeneuve You make an incredible point, I am not intending to borrow from the already owned property, but I see your point in that there's going to be a greater period to recoup if that's ever possible. Would you consider attempting to pickup the property through a formal listing? I.e. dissolve the LOI and attempt to purchase through traditional method once it hits the housing market. I appreciate the additional point of view, I would be in around $25k at time of purchase, I am definitely rethinking this move though based on the points you make. Great analogy by the way! definitely helpful in showing the difference.

@Nate Sanow Agreed, the Vermont Market is nice on money conversation in some of there more densely populated areas, but the cost of repair and age of homes makes it a hard sell. I appreciate the reply!

@Joe Villeneuve Thank you for the reply! Currently the property is leased with a tenant that would breakeven based on the amount we are currently paying on the first half of the property and the pre-approval already received. This tenant has been in place for 5 years and is paying under market average. Therefore as long as the property pays for itself and has a consistent rental history I am not worried in regards to immediate cashflow. To answer question 2, I am attempting to keep away from speculating increases in value on the New York properties, because I do think we would be purchasing on the top side of this market currently. If the New York Property stabilizes then we will continue to use the rental income to sustain the property and attempt to plan the next move. The LOI guarantee was more of mutual stipulation to keep the house from going onto the open market. The owner owns several houses and between inexperience in conducting deals and the hopes of attempting to acquire more from them I made a questionable move, but it will be taken from the final sales price once we proceed towards closing.

@Nathan Gesner Thank you for the reply! I have reached out to the Zoning and Permitting office and have received confirmation to convert the first half which we already own into a Duplex. The other half would be an exact copy of the first since they are mirrored units. Which I realize doesn't guarantee acceptance, I am hoping that it means we have a higher likelihood of the plans going through. I agree that its atypical, but I am hoping to hold the properties for an extended period and want to minimize regional expenses like separate taxes on the properties. Seems like this would not be as beneficial though as I first estimated. 

Good Morning Bigger Pockets Community! 

I believe the old saying when it rains it pours is true, but not always a bad thing. Sometimes its a storm of options that you receive after your certain you have chosen the right path. Here's the situation and I would definitely appreciate any feedback you have!

Currently we own one rental property townhouse in the Capital Region of New York, soon after purchase (Less then 6 Months) we were contacted by the owner of the other half of the two townhouse structure asking if we wanted to purchase it at the same price as the one we had already bought (the person owned both halves originally). Graciously we agreed and drafted a letter of intent which is currently on file and bound by a $1k Deposit. The total purchase price is $269,000 of a Two Bedroom-Two Bath with a full basement identical to the one we already own. Rent in the area for like units is in the neighborhood of between $2,000-$2,500 If we are to purchase the other half of the building I believe there are numerous options we could implement to make the building cashflow. For starters; 

-I would like to attempt to merge the lots together since the building shares a wall and attempt to reclassify it as a multifamily rather then two stand alone single families, if possible. Hoping to both identify the property as a single entity and to drop some of the taxes.  

-In addition to merging (or separate from merging the properties) we plan to finish the basement of both properties into One Bedroom-One Bath apartments. This should increase the value and cashflow with the ability to sustain an additional tenant, the area is already zoned for Multi-Family use.

There other option I am weighing which is slightly less favorable due to the connections we have already made and the image of faulting on a Letter of Intent this early in our investing career is to cancel the agreement and invest the money into a different market which exists in Vermont. There are numerous incentives to buy properties and grants available for properties needing repair due to the current housing scarcity in the state. Between Zillow and Mailed out flyers we have been in contact with numerous single and multifamily properties for less then $100,000 renting in the range of $1250-$1500 as long as it has a cleared Occupancy statement from the City. 

Therefore we are on the having the argument of Cashflow vs. Equity, New York will yield more equity and will eventually return additional funds for investment over time, but Vermont will be able to Cashflow sooner with the ability to increase equity through repair, but it may be several years before it reaches the value of the New York property if ever. Currently I am hoping to be able to purchase the New York property and still be able to enter the Vermont market later in the year, but I do not want to over leverage or miss an opportunity. Any feedback would be a huge help and honestly just typing this out helped a fair amount!

Thank you in advance,

-Ryan B.  

@Ruchit Patel I am definitely interested in purchasing out of state, just attempting to build a basis of equity and/or cashflow prior to looking for properties outside of arms reach. Do you have any suggestions on how to possibly do this sooner?

Thank you,

-Ryan B.
 

Good Morning @Steven Spinicchia

Thank you for responding to the post and I completely agree, I believe the move is to acquire the property next to the first property, for two main reasons. The first being the ease of ownership as you mentioned, but also because the owner has several other properties around the region and by purchasing the second property, I am hoping to create a solid working relationship with this owner for future properties he may want to sell. 

On an update related point! We did reach an agreement which stands to be a letter of intent and $1,000 Deposit to purchase the property on the first business day of 2023. The owner decided this would benefit him best tax wise and I believe it will also help me, because I should be able to claim deprecation on Land Improvements and Contents on 2023's returns as long as the deal goes through in 1st quarter of next year. 

Additionally, I would definitely like to connect to talk more about Real Estate in this area! I am mostly investing in Northern Albany County and Schenectady County. 

Thank you,

-Ryan B.

Good Morning @Jeffrey Albaum 

Thank you for the feedback! I am in agreement that Option 1 would favor best for my situation. My biggest concern is that the choices I am making now will create issues for scaling down the road as I am ambitious to acquire properties. Since this post I did speak to the owner of the property attached to ours and it sounds like he is interested in creative financing! I am attempting to sway the negotiation in the direction of a lease option agreement. 

Thank you again,

-Ryan B.

Good Afternoon BP Community!

Stoked to be here and actually getting a chance to interact with the community I have been listening and reading about for so long! Little background on my situation, I am a new investor who recently purchased my first property in April 2022 in Upstate NY. I was able to purchase the property under assessed price and currently after making the first few payments have around 25% total equity which figures out to around $75,000. The property is one of two connected townhomes and we are house hacking with a consistent rent that covers the mortgage cost. I have been prompted with a few various options in the last few days that could help increase my portfolio, but I have been struck with analysis paralysis and am looking for some suggestions on how to make the right deal for my situation. Thank you in advance for taking a look, the options are as follows!

-Option 1- The Owner of the other connected townhome reached out to me to ask if we would be interested in purchasing his property. He was the owner of the half we bought also and said we could do the exact same deal as before, which we had hoped for, but we planned to reach out to him later in the year with greater capital or greater equity in the first half. The property is currently rented and the tenant is hoping to continue his month to month lease. The owner is a lender and owns numerous houses around the area and did make an offer to help us obtain the loan. My thoughts are to reach out to the current lender on Property #1 and check their rates for a Cash-out Refinance prior to looking at any other lenders. My question is though, if the owner is also a lender could we ask for a loan guarantee and/or waive of origination fees if we meet the sellers requirements? In order to make this scenario work we would be relying on investor capital or a HELOC/Refinance (Preferably Refinance).

-Option 2- We have also begun driving for dollars and have sent various letters to vacant property owners over the last few weeks, although none have come to completion yet we have various deals that could be made at lesser purchase amounts then option 1 or even possibly wholesales. Which would grow portfolio size, but would be an increased investment with no immediate cash flow if the properties are not already rent ready. These deals are dependent on Capital Amounts and Location. With this being said I am interested in discussing properties with Capital Region Wholesalers and/or developers!

-Option 3- This option is by far the most far fetched, but I am also attempting to find a lease-option for a Boston, MA Apartment or Condo, The majority of my investments are in NY, but I also do a fair amount of work in the Greater Boston Area for my W2 job and would like to have a place in the area, but also be working towards an investment property. I receive a housing allowance monthly via work that I would like to use for an owned property rather then rent/hotels. Hedge the costs of hotels into an investment property purchase. So if anyone knows of any agents in the Boston area I would like to connect!

I can imagine that I may have missed some details that are needed for the best possible advice, but I plan to be regularly checking this posting so please anything helps! I am excited to read the suggestions and again thank you all for taking a look and helping to encourage people to take the leap for financial freedom!

Thank you,

-Ryan B.