All Forum Posts by: Sam Kay

Appreciate all the insights!

@Evan Polaski That makes sense. Will consider with trusted plumber who is coming in a few days. 

@Alan Asriants I believe all of this! I may need to find this trusted roofer soon. The roof seems to be OK unless there is a severe rainfall. But still, this situation will only get worse. I may be getting close to a full replacement if roof leaks progress and happen with only mild to moderate rainfall. Good advice re Hardie board!

@Gabe R. Gonzalez Roof was silvered by previous owner prior to my acquisition and offered a 3 year warranty but since then, I brought in my own roofer who has worked on it. I think I'm heading towards a full replacement if leak recurs. That will give me peace of mind, especially since I am self-managing with a demanding primary career that is not in RE. There isn't any rotting that I noticed. There is pooling in areas away from the drainage pipes though. There is stagnant water. But the roof leak mainly occur with severe heavy rainfall.

@Gino Barbaro Property is worth about 1.31-1.41M (about 50K-150K appreciation since acquisition). Ofc selling a property with active leaks would be a concern. I have no problem disclosing though since it's a hot market and finding a buyer shouldnt be too challenging. My hope was with a buy & hold strategy, I could refinance within 1-2 years. At 6% interest rate, it would be a 5.6% COC (~$1200/month).

@Dave Foster Can you share where this clarification was made? My CPA has advised not making any moves until 2025 to avoid raising red flags ie cost seg, putting into service, and then selling all in the same year. 

@Evan Polaski

Thanks for this. All units supplied by 1 main line. I wasn't aware of a pressure test. 

The roof itself was repaired/silvered by the seller a few weeks before I acquired. My roofer capped and flashes areas a couple of months later. 

The recent slow roof leak into the top floor apartment was after a major rainfall. It wasnt dripping. Removal and examination after ceiling drywall removal revealed the water tracked along a joist and saturated the ceiling from a focal point along the joist. There werent any drops into the apartment but simply ceiling saturation. My roof water leak test could not reproduce the leak albeit the amount of water from a garden hose can't compare to a major rainfall. 

I think I will Karnak the roof and reassess if it occurs again. 

Regarding the First floor leak, the ceiling isn't soft or saturated - just discolored. It's unclear if this is discoloration from an old leak that bled through the ceiling paint that was applied during the April renovation or truly an active slow leak somewhere. I'm having a good trustworthy plumber come out. 

@Ashish Acharya

Thanks for this! I will bring it up with my RE CPA!

@Joshua Christensen

Thanks for this helpful strategy on evaluating the Floor 1 leak. 

Regarding Floor 3 leak, I am entertaining a full roof replacement but may Karnak myself first since that leak could not be reproduced on my test and appeared after a heavy rainfull. water ran along a joist. 

I am strongly considering MTRing floor 1 and LTR floors 2 and 3. And then 1031ing into something else early 2025.

My Real Estate only CPA advised against 1031ing this year.

TY!

Hello BP fam,

Need some advice. Purchased a 3 fam in Jan 2024 built in 2016 in an appreciating expensive market across the Hudson River from Manhattan NY. 2 units were vacant on acquisition and completed rehab in July, 3rd unit tenant vacated in May and completed rehab this week. Long road to property stabilization with multiple leaks from roof and facade being the major issues we dealt with. Roof was flashed and repaired in May. I isolated face leak source and focused repair was done by mason. All 3 units going on market as LTRs this week and then I discovered 2 NEW leaks. First is from roof along 3rd floor ceiling and I could not isolate source on leak test. Roofer with no answers - claimed from dryer vents. All roof vents are capped so that’s highly unlikely. Other leak along 1st floor ceiling. Investigating 1st floor leak would be quite involved with potential sources being bathroom above but hard to say. Many other upgrades done to force appreciate. Desirables: 8 min walk to trains to NYC and 2 parking spaces.I feel the property was not built well and future leaks are inevitable. 

I will be first time REPS in 2024 but unlikely in 2025. Self managing with Hemlane Complete in 2024 only. STR a suboptimal option in this market due to restrictive ordinances.

Purchase price: $1,260,000 with 11% down @6.75% fixed 30 yr

Total Rehab costs (labor + materials) thus far: -$70,390

Cashflow to date (NOT including Rehab Costs above): -$60,237

Projected Cashflow: 3.1% with 3 LTR tenants 

Wanted the group’s expertise on options as I am considering parting ways with this property given the number of leaks that have come up in this relatively young property.

1) In 2025, 1031 into another (potentially more units) multifamily at least 20 years old.

2) Investigate leaks/Stabilize and proceed with original plan as LTR and accept uncertainty related to potential future leaks.

3) Proceed as MTR (hospitals and NYC nearby) so that can intervene on issues during vacancy periods. Accept furnishing and management costs.

4) Other

Would greatly appreciate the community's wisdom on this. Thank you!

Thanks @Denver McClure

Ill msg him!

Hello BP team!

Having a tough time finding a company to cover a multifamily property that I intend to owner occ in Jersey City. And when I do, the premiums are insane. 

Anyone have any homeowner insurance contacts local to Jersey City?

Thanks!

Sam

Hi @Nick Gupta

I decided to self manage with Hemlane. It's going well so far. 

@Drew Sygit

Thank you for your valuable reply. I will heed your advice. 

-Sam