All Forum Posts by: Ryan Vienneau

Hi Ted, 

Have you attended our local REIA meetings? In Latham 3rd Mon of every month, very good group. Its called the Action Investors Network.

Hi Carlo, 

Taylor's right on the money, I'm in the market myself right now for some multi family's in that area and live near Clifton Park, 30 mins north of Albany.  One thing about Troy and Schenectady, beware of taxes, and beware of the block you're looking into, both those cities have some beautiful downtown areas, yet one or two blocks away are gang shootings and crackhouses, so definitely look at street-level comps, doing the standard comp within 1/2 mile can give you hugely varying property values.  

In waterford, much of the city is in a flood zone, so beware of that also.  Personally, I'm a fan of Watervliet for rentals, but it seems everyone else is too because rental purchase prices are fairly steep there for the rents you can get.  

We're an LLC and I'm the sole owner, but she's obviously actively involved. That was my thought too, as long as she discloses to the seller I don't see how the broker can have a hand in something they contributed zero resources to.

Here's the scenario:

I'm an investor, my wife is a licensed NY real estate agent operating under a broker in the Albany area.  I'm currently working on my first flip deal, and want to have a yard sign out front with our company name on it during construction, saying something like "Coming Soon", and/or "We Buy Houses", etc.  

Ultimately, when the property is ready to be put on the market, I intend to use my wife under her broker to list the house.  But SUPPOSE, during construction, someone wants to buy the house before it's on the market.  Can I legally sell it to them as a for sale by owner as long as I disclose that my wife's an agent (assuming she's involved) and not go through her brokerage?  

My wife feels like that's bad juju, but at the end of the day it's our own property and we have the right to sell it privately until it's listed officially with the broker, don't we?  For all you brokers out there, even if it's legal, is that bad form?  

Your biggest advantage just out of college is that you're probably still flexible enough with your own living arrangements that you can utilize some HUGE financing advantages for owner occupants that the rest of us older investors with families can't really do (known on BP as "househacking") not occupying the property.  

For example, there are mortgages available to owner occupants for as little as 5% down in many cases, whereas non-owner-occupant investors need 20-25% down.  The cool part for you is that as long as you live there for the bank's minimum period of time (usually 1-3 years), when you move out and into another property you get to keep your original low money down mortgage even though it "becomes" an investment property and not your residence when you move out, but you can still go get another low money down mortgage as an owner occupant for your next property.  

It's a fabulous banking loophole that I wish I took greater advantage of in my 20's for amassing more properties with little money out of pocket.  You'll find as you grow your biggest limitation is finding the 20-25% down payments for investment properties, so using "owner occupant" status gives you a huge leg up.

You also get the option of utilizing 203k rehab loans as an owner occupant, which is yet another big advantage.  

I'd highly recommend reading @Brandon Turner's book "The book on buying houses with no or low money down", I think it was chapter 5 that's all about househacking.  

Welcome aboard Jacob!  Brilliant decision getting into real estate at your age, I purchased a multi family when I was 19 and still in college, my tenants paid my mortgage and I basically lived for free and it was the best thing I ever did.  In retrospect, the only thing I wish I did differently was do that about 10 more times throughout my 20's and keep every property instead of selling along the way like I did.  

Another word of advice: Don't be deterred when 99% of those around you say you're too young to buy a house or don't know what you're doing or that landlording is awful.  Just read a bunch, talk to people on here, network, and you'll do fine.  Good luck!

Waterford's definitely a good area, but beware of the flood zones, government subsidies for flood zone insurance are being phased out so the premiums have shot up 5x-10x in some cases, I've found that in some Troy areas too, and Stillwater.  Someone will share a 2 year old flood insurance bill for $800, but if you try to get a new policy now its like $3500.  

@Donald John Jepson - Hi Donald, welcome aboard!  I live in Ballston Lake NY and am in a similar situation, I used to own a multi family that I lived in, and now am gearing up to make a few purchases this year and get back in the game.  The podcasts are excellent, I'm also listening round the clock, they're addicting.

Several members on here have suggested I attend our local REIA, the Action Investors Network, so I'm planning on attending my first this Mon in Latham, http://actioninvestorsnetwork.wildapricot.org/.  Check it out, it looks like a good group and both my lawyer and CPA have recommended as well, both attend regularly.  

Wayne, that was also my thought, but evidently in lovely NY there's a law regarding insurance involving "height risks", like guys on roofs and ladders, that causes those policies to become ludicrously expensive too, just like general liability.  In talking with a few agents, most have said that since that law change most of their underwriters have refused to even write policies in NY anymore, so they used to have 50 different providers to pick from, now there are only 4 or 5 willing to even offer those policies in NY, and the ones that do charge through the roof.  

Looking for some advice from any flippers in New York.  I'm planning to do some flips this year for the first time in the Albany NY area, I'm in the process of forming the company right now, meeting with CPA's, lawyers, insurance agents, etc, but I'm getting conflicting recommendations from all of them regarding how to best limit my exposure to lawsuit.  Here's how the meetings have gone, in order of my interviews with them:

CPA#1: "There's no tax benefit to having an LLC, only the reduction in liability benefit, so it's up to you to figure that out with a lawyer and insurance agent, but most of our clients form LLC's for flips."  

CPA#2: "There's no tax advantage to having an LLC, and it would be far cheaper to get liability protection by buying insurance rather than dealing with the hassle and expense of having an LLC, so I'd just form a dba and get good insurance."  

Lawyer: "Whether you form an LLC or get sufficient insurance doesn't make a difference to your exposure level starting out if you don't have millions in net worth.  Eventually as you grow, it would probably be wise and more cost-effective to then form an LLC, but you should talk to a CPA and an insurance agent."

OK, so up until this point, I'm thinking no to the LLC, just get a good liability policy and form a dba and I'm good. Then I met with the insurance guy.

Insurance guy: "Umbrella insurance will NOT cover anything related to flipping properties, that's it's own business, so you would need a commercial liability policy, which in NY is stupidly expensive do to recent changes in laws and will run minimum $5k/yr, probably closer to $10k/yr, and that's if you're only doing a couple flips per year.  So, I'd love to sell you a commercial policy, but you're nuts to not form an LLC instead, it'll be cheaper and give you better protection."

So to all my fellow flippers in NY that are NOT operating as an LLC, what are you carrying for insurance and what is the cost?

To all those that ARE operating as an LLC, do you agree with the insurance agent's recommendation?

Thanks all!