All Forum Posts by: Syed H.

I remember in 2015, we all said the same thing in NYC CRE. Market was turning etc etc. Volume slowed down, prices went up or stayed the same (flight to quality), and then the market continued to go up from 2015-2019 lol. But I do agree the bull run needs to stop at some point

Deals are still hard to find here in NY/NJ. But well priced properties are still selling if priced slightly under market. Being the most expensive house on the block is a scary place to be right now. I've stopped taking any project above $1.5m and ones that have to have an ARV near the top of that market.

I don’t even understand people taking on expensive new construction deals right now in my areas. Betting and needing top dollar on a property that won’t even hit the market for another 18-24 months seems insane to me. But there are builders left and right breaking ground right now. 

I get it, some of my friends got hit with the same. Most of my friends with businesses are paying less tho. That's probably why you don't hear about it as much on here since the only real thing that is affecting us here on BP is SALT. Also many of us are just use to the mental and financial toll of tax time. I spend thousands just to figure out what I owe between my multiple businesses. March is never a fun month. 

 you are. Everyone isn't. Many of us business owners are paying less. The employers are to blame for withholding incorrectly. 

Also OP that isn't a horror story because of the new tax code, that's a horror story from an uneducated investor. These OZ funds & investments are the new buzz word everywhere I go, but the funny thing is half the people know nothing about how it actually works. 

The tax bill is better for most of us flippers & owners, the only issue is the SALT deductions that definitely has affected us here in the high tax states (NY/NJ) where property tax alone is $20k on some of the houses I sell. 

 Yeah it's only on drawn funds now. Doing gut Reno flips between $400-$1.6m in deep markets in NY/NJ. No buy & holds. 

 Same, but I like doing both. With flips and new projects, I am always hunting for the next flip/project. With rentals eventually I can hit cruise control. I don't mind landlording with a larger portfolio where I can hire people to handle some of the grunt work. 

 Only 50 minutes? That's close! lol 

I self-manage from 2 hours away. 

How do you show the property? 

Either me or my partner show the units. But we group all showings around the same time. We have 0 vacant units out of 18 though. Last vacancy, it took 3 showings in 2 weeks to find a tenant. We just sucked it up and went. 

Do you have a handyman do it or some other "boots on the ground"?

Yes. Our logic is we are ok with paying our handyman a little more to keep him happy and handle some of the grunt work. If there is a quick leak, backed up main line, or a breaker trips, he runs over. This is MUCH cheaper than a PM. I'm saving 7-9% on mgmt, 50% leasing fee, and the up-charges on maintenance. 

How do you pay them for their time?

We pay him by job. We are flippers, we know what certain jobs should cost. If it's just a simple circuit breaker I still give him $20 for a 1 minute job just because he saved me a 4 hour round trip and $40 in tolls. 

Self-managing isn't too hard, but it requires flexibility & systems in place. We go 2-3x/month for a full day to collect rent from our PO Box, deal with maintenance issues, and look at new acquisitions. Most people can't do that if they have a 9-5. Also, have a google voice number to give to your tenants, a PO Box for rent, and a system to keep track of rents/inspections/etc etc etc.

@Bradley A. Most sellers don't function as logically as you would assume they would. I would get used to sellers not agreeing with you on price, terms; etc etc. Thats why it takes consistent effort & offers to find your deals. I'll look/bid on 20-30 properties before I win one. 

This. 

I see people here push Buy & Hold & BRRR a lot. They say flipping taxing is too much and costs a lot (which it does). You should see a much higher return (Even after taxes) on a flipping business model than a brrr (for the most part, I know there are exceptions to this).

But I have yet to see the returns of a flipping in a BuyHold or a BRRR for a large portfolio. BRRR fails plenty of times because of appraisal and rental income for houses in more expensive markets isn't high enough.

$200k buys u a decent enough flip. If that was my money I could net pre-tax between $60-$100k on the average deal in 9 months.   

All of this varies by location. Short sales in NJ & NY take some time. I haven't ever done one within 2 months. Usually it'll be 3-4, sometimes 6. We're in judicial states. The foreclosure process is extremely long.

@Jason D. What is market value? I have done plenty of flips on short sales, sheriff sales, regular market purchases; etc. Short Sales have usually been for larger profit than the others. Yes there is an appraisal, but if you get a decent appraiser he should know the appropriate comps to take. If the appraiser is given the appropriate comps and shown all the issues with the house, the price should reflect that.

However, OP, I put tons of short sale offers bc I'm a flipper with the capacity to close on everything I'm going to put in an offer on. Im not sure it is worth it to go through all this, put down a bunch of emds, and only win one house for someone who does flipping on the side. I include short sales in a broader acquisition strategy to make sure I always have a flip or 2 (or 10) running at the same time and making sure I never have a gap. 

5 years ? I doubt that. A bad tenant can rip apart that carpet in 1 year. A decent tenant can ruin it within 2-3 easily.  

I use no carpet. Not worth it. Laminate/vinyl/tile only. You can find them on deep discount different times of the year at then if box stores. The pro desk will sell it to you for even cheaper.

I buy in bulk whenever there is a sale. I buy vinyl for between $1-$2/sf and laminate under $1/sf. Well worth it.