All Forum Posts by: Sam C.

Not sure if you are in PA or NY. But (in either state but not sure about NY)) you cannot split a common utility cost among each unit. Even if the tenants agree, anyone of them can file an action against you. Can be a nightmare. You can install water meters (not city ones) that can monitor the water usage but the record keeping and calculations can be a pain. I do not see how you can monitor the heat/gas use for each tenant with one boiler. Increase the rent for each on a worst case scenario (You know: the tenants that realize that not paying for heat means they can leave the windows open in the winter and not paying for water will never get a leaky faucet reported. Not matter how you do it, if each unit is not utility independent, it will always be a problem in one form. 

We are in no man's land and coming to the end of this cycle with this particular fiat currency. What I see is a controlled (or attempt to control) demolition of the economy. Rising inflation and rate hikes are only a benefit to the central banks (and their wealthy members). AND THE GOV'T/FED DEBT WILL NEVER GET PAID. People will be made poorer (inflation is a worldwide problem), houses will rise in prices (along with metals and commodities. Maybe cryptos) but most people will have to settle for less house (if they can buy at all) with each rise in the mortgage rates. Will that translate into more renters? Logically it should but the quality of the applicants may be problematic. And the central banks are hellbent on bringing in a digital currency (just look at what gofundme, paypal and now Canadian banks are doing. You can assume that the ability to shut people off from their money with a tap of a key is bad). So what does that really mean to us real estate investors? Leverage can put you out of business if your ability to finance the debt goes south (you can gross a $1,000,000 a month but if it is costing you S999,000 to service that income, we'll you know what I mean). In every RE correction I have been through, the higher the leverage the quicker the fall. So the more room you have between the income and debt the longer you will last. What I am seeing is that the areas where lockdowns and covid actions killed jobs and businesses, people are moving out  and they are going to have trouble sustaining asking prices and jobs. While many of the same people are moving to more desirable locations (states that stayed open and did the least amount of damage to their citizens and economies, i.e.: Florida. Miami/Orlando are hot and possibly already overpriced). An exception to this may be Utah. I have heard that because Mormons stay close to home and have large families, there are a large number of offspring starting out and buying homes. (Good flip market?) Will you be able to pay your debt? Will you be able to keep good tenants? Will you be able to offer a decent unit and at better (lower) rents than the next guy? Can you afford a 15, 20 or even 25% vacancy rate? Will you have to sacrifice maintenance and repairs because of little to no reserves after vacancies, mortgages, taxes and insurance? OK. So I know  I'm the last guy you want to invite to your party but  I started in real estate in 1987, been through 3 corrections and by following my own advice did OK. HOWEVER: I honestly do not see this one coming as a correction but more of a fundamental reset with a new reserve currency and most likely digital. (The correction should have happened in 2008). They decided to make it 1000X worse.  But when the dust settles and if you are on the other side with your portfolio intact, you will be well positioned. Or don't overpay (or use price appreciation to make the numbers work), save your money (cash or a solid credit line) and wait till the **** hits the fan then buy "when there's blood in the streets". 

This may help out landlords. Sets a precedent that should in a short time be applicable nationwide. 
https://www.cnbc.com/2021/02/2...

I have a tenant occupied single in Allentown for sale. Well kept. Off street parking. 5 minute walk to center city. 

Hi Gavin. Not sure where you are in this particular deal but hopefully you're still moving towards closing. I have worked in the area for over 20 years. If I were buying the house strictly as an investment for the income, 155K would be cutting it close but cash on cash should break even and the upside would be equity appreciation and debt pay-down. Not sure what the upside is at 155K. I don't see it until about 10 years out. But if I read correctly, you were thinking of moving into it. That's different. There's a certain quality of life that should bee considered. "Really want to leave my 2 unit and rent the 2nd unit. Do not like living on top of my tenant and we have a 2 year old. We are dying for a SFH. We don't want to lose this deal."
Think about those words. You have a wife and child. A home that provides the level of comfort I suspect you have earned and sacrificed for is your right. When I was about your age with a small child (a second came soon after), my wife and I built a small house on 3 acres (actually half a house and finished it over a period of time while there. We stayed in that house for over 30 years. During that time I built a decent portfolio of properties, bought and sold a fair amount and am now cashing out. I could have done the buy/move option a number of times and maybe have 30%+/- more in money/assets. But the stability and peace of mind I provided my family was important to me and actually made it easier for me to stay in the business and focus on my business (a happy wife and kids makes for a happy husband with less to worry about while I grew my RE portfolio). The moral of this story is: buy the house settle in, and build your RE holdings. Use the home as a stable and secure place to get away form all the BS we put up with out there. 21st Street is a good and stable area of west Allentown. If I  had to do it all over, I would have probably found a place in the west end to make base camp (I lived about 35 minute from Allentown and the commute was problematic and if we would have had the ability to walk or bike ride to stores and parks and services would have been a real plus. The rent from the apartment will offset the cost of this property. You should at least for the foreseeable future be able to sell the house for more than 155K (maybe. but pretty sure not less). And if the proverbial **** hits the fan you should be able to hold on to your current properties while others loose theirs. And 21st Street will not be a bad place to hunker down during the coming realignment of the financial system. Good luck.

After being in the business for almost 30 years, I think it's time to sell my singles and move on. I'm torn about doing it for a number of reasons but mainly because after netting out, there's nowhere I can put the money and generate the kind of returns I've enjoyed. The best I can do securely is with annuities that will return about 7% a year. Then of course there's the capital gains. These are the last for singles I own, 2 in west Allentown, 1 in Bethlehem, and 1 in Easton. Planing on listing them soon but will shop them privately for a while. I have always loved singles because they're easy to take care of and the tenants usually stay for years. Net cash on cash, even after the sale will generate at least 10%. A cash buyer will see closer to 15%. Anyone find a secure place to invest money outside of real estate?

Hi Benard,

I use an android app. ARS-Investment Property Analyser. Gives me all the essentials quick and easy.

You seem to do a lot of work for free. Honestly, I don't have the time to read your entire post. My questions are:

1. How long have you been in the business as a realtor

2. Do you work for a broker or independent

3. How many sales have you made in the last year

4. Have you calculated your hourly income using the variables of number of deals, time spent on each deal, and commission paid on each deal. 

This would be a basis for me to outline a business model if I were doing what you do (I used to but bought stuff along the way that I can now live off my cash flow. However, I still work if I need extra income or want to learn something new)

Best of success,

Sam

Find a 2-3 unit where you and your family can live in one with the other apartments covering as much of the expense outflow as possible. Under 4 units is considered residential lending and should be easier to get financing. Worse case scenario, if landlording is not for you, you have a place to live and on the cheap. If you like it and the cash flow works, you can buy more. Look at a  10 year window to build a small inventory without getting highly leveraged. 

I do not think you can get through settlement without a CO report that city has signed off on or buyer agrees to do any and all repairs.