All Forum Posts by: Sergio Altomare

Checking to see how many Philadelphia area investors are heading to the conference on Sunday. We'll be getting there in time to find the local sports bar to take over and watch the Birds game. Interested? Location TBD.

@Jason Seward Luxury vinyl for sure. It's all we use these days. Contact couple of flooring specialists or retailers to get good price for material and install. We pay $6-8 a sqft, all in.

@Connor Ryan We are at the peak of the market cycle and should be planning for a market slowdown or downturn, so your best bet is to relocate and hoard cash to be able to scoop something up at a great price. House hacking would be my vote for your 1st investment. Good luck

@Jordan Woolf As others have mentioned, it's much more cost effective and reasonable to put siding right over top of it. I've done it on several properties without issue. It's not an issue to lose a deal over.

In case you are or are considering investing in rental housing in NY...

On June 14, New York State passed A. 8281 and S. 6458, also known as the “Housing Stability and Tenant Protection Act of 2019.” The package was signed by Governor Andrew Cuomo (D) and went into effect immediately. The omnibus represents the enactment of the strictest rent regulation laws ever established and contains a host of onerous provisions that will have significant effects on the quality and quantity of affordable housing in the state.

The main thrust of the bill, among other adverse provisions, lies in granting New York’s municipalities the ability to opt into New York City’s rent regulation system, where a rent board sets the legally permitted increase in rent every year based on its own calculation of the costs to operate an apartment building.

As part of the new law, rent boards will no longer adjust rent calculations for vacancies of regulated units. The law severely limits how much an owner may increase the rent to cover the costs of major capital improvements (MCIs) or individual apartment improvements (IAIs), and it eliminates vacancy decontrol and luxury exemptions to rent control regulations. These changes will have devastating effects in a state where over half of the housing stock was constructed before 1959, accelerating the primary consequences of rent control policies: deferred maintenance and supply reduction.

Other onerous provisions are as follows:

• Increases notice requirements for rental housing providers to renew, nonrenew, terminate a tenancy or increase the rent.
• Allows judges to stay the execution of an eviction for up to 1 year.
• Specifies that housing providers may only seek rent in an eviction action, excluding fees, charges and penalties.
• Prohibits housing providers from recovering attorney’s fees in default judgments.
• Places limitations on the requirement that the tenant in an eviction action must pay rent into escrow.
• Strengthens the rights of a tenant in an eviction action to affirmative defenses and counterclaims.
• Prohibits owners from evaluating an applicant’s prior rental history in the resident screening process.
• Caps application fees to $20.
• Caps late fees to $50 or 5 percent, whichever is less.
• Limits security deposits to 1 month’s rent.

NAA is working with the affiliate network to push back against similar policies being proposed around the country. Everyone must be vigilant. Please alert the NAA Government Affairs team at any indication that adverse measures like these are coming to your city or state.

@Joe White Thanks!

Hi @Joe White. It's what we actually sold it for in November.

@Michael Swan funny, I am reading MFM right now. I have read several other syndication books, but it's nice to read reinforcements of how and why we do what we do. David does a nice job of covering a lot of topics and succinctly. I'm going to consider using it as a requirement for my investors. Thanks for the idea!

@Jason Merchey as @Michael Swan said, you want an operator that will not only protect your money like a pit bull, but put their own money on the line as well. Having skin in the game will make sure the sponsor is honest and has done the due diligence on the project to ensure he will protect his own money as well. And as @J Scott said, it's up to you to ask yourself the right questions about the due diligence that was done, and and risk analysis if things change.

I also look at a worst-case scenario of a property continuing to perform as it is, in which case your money should be worth at least that, albeit discounted.

Lastly, depending on the projected return, you should only be prepared to put up money that you're willing to lose based on the risk / return.

My company has not found the deal worth syndicating in two years, as we manage our own properties and have not found numbers in the area that we could make work based on where we are at in the market cycle. As such, we have shifted to self storage as what we believe is a hedge against the next market downturn.

Good luck!

@Adam Batcheller the tenant is offering to improve your property at no cost to you, so it's a no-brainer to me. While I agree that you should verify that the brother is a licensed electrician (maybe also ask for pictures of the completed wiring), installing a ceiling fan it's not rocket science. The risk is minimal. I would send him an addendum indicating that the ceiling fans are to stay with the property, and in no way change his lease terms or expectations for security deposit when he leaves.

I've dealt with many tenant headaches in the past, and those that offer to improve the property rarely have been that. It's those that offer to do in their own cleaning and repairs to get their security deposit back are the ones that you have to watch for it.

If you know the tenant and trust that they're doing it to be more comfortable, I would ask why not?