First time BRRRR with 1885 Cottage in Syracuse, NY.

Real Estate Deal Analysis & Advice
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First time BRRRR with 1885 Cottage in Syracuse, NY.

Ed Sautter
Rental Property Investor · Syracuse, NY · Member since 2018 · 10 posts · 5 votes

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $13,500
Cash invested: $54,000

The Land Bank house is my first attempt at BRRRR deal. I will end up leaving some money in the deal, but that's OK... this is my "learning house". This single fam had major roof and ceiling damage... probably a bit more involved than a newbie should undertake but I'm a gluten for punishment. House was built in 1885. I'm attempting to keep some interior character and ad character back to the outside. Image provided is my before and "photoshopped-after" picture.

What made you interested in investing in this type of deal?

Need a back up plan for retirement. My 401K isn't the answer.

How did you find this deal and how did you negotiate it?

Found it on the Greater Syracuse Land Bank Website. It was one deal that didn't require "owner-occupancy". Paid the asking price because it was low and to hopefully beat out competitors. Land Bank said my written presentation was one of the best they'd every seen.

How did you finance this deal?

100% cash.

How did you add value to the deal?

Renovation and my keen sense of design. This rehab will look better than 75% of the rentals in Syracuse at the price I want to rent. I should easily attract good tenants.

What was the outcome?

Still working on that. One month into renovation. HAAALLLPPPP! :D

Lessons learned? Challenges?

What the hell is "Certificate of Good Standing" for an LLC? Had to have it for closing as requested by the title company... cost me $100. Still don't understand why it was needed when I have other docs proving that my LLC is real. Whatever NYS!

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Darran Giangiobbe
Syracuse New York · Member since 2019 · 14 posts · 6 votes
7y

@Ed Sautter I seen your post on IG. Didn't know you were on Bigger Pockets too. How have you dealt with all the contingencies the Syracuse Land Bank requires? That has been my biggest turn off from trying to buy one of there properties.

Hope you keep us updated with the process!

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  • Leah McNell
    Real Estate Agent · Albuquerque, NM · Member since 2019 · 40 posts · 19 votes
    7y

    Hello! This is pretty cool info here. We are looking to do exactly what you are doing in Syracuse but are concerned with the taxes. How did you factor in the taxes into your budget while you are rehabbing? Are you expecting to be able to find a renter, pay off the taxes and still generate a small cash flow or are you planning on taking a loss the first year with the expectation you will be able to generate cash flow (with yearly tax rate payment and mortgage payment) in the years to come. Interested to hear your thoughts! Thanks!

    0Reply
  • Darran Giangiobbe
    Syracuse New York · Member since 2019 · 14 posts · 6 votes
    7y

    @Ed Sautter I seen your post on IG. Didn't know you were on Bigger Pockets too. How have you dealt with all the contingencies the Syracuse Land Bank requires? That has been my biggest turn off from trying to buy one of there properties.

    Hope you keep us updated with the process!

    1Reply
  • Cory Finniss
    Rental Property Investor · Raleigh NC · Member since 2015 · 90 posts · 30 votes
    7y

    I would be interested in joining a conversation about land bank homes.

    0Reply
  • Bryan Cavellier
    Rental Property Investor · Syracuse, NY · Member since 2019 · 90 posts · 34 votes
    7y

    @Dawn Brenengen thanks for the info, I will look more into specifics.

    0Reply
  • Amanda Kessler
    Member since 2019 · 111 posts · 36 votes
    7y

    Looking pretty good so far!!! Seems like you know your stuff. Good luck 

    0Reply
  • Ibrahim Bawa
    New York, NY · Member since 2017 · 2 posts · 0 votes
    6y

    Hi Ed, any updates on the property? Would love more info on the Syracuse Land Bank. I am considering one of their houses. Thanks

    0Reply
  • Ronald Starusnak
    Property Manager · Syracuse, NY · Member since 2016 · 601 posts · 384 votes
    6y

    Certificate of Good standing is to make sure you're properly registered with the state. I use Mark Farchione for all of my Real Estate transactions. He is an excellent REI attorney and has a few hundred units of his own.

    @Ibrahim Bawa -- The landbank houses have requirements on repairs. They want to make sure you're having the work completed to bring the house up to their standards. They will request a 3rd party repair estimate from a licensed contractor, they will also request proof that you have a loan or the liquidity to pay that contractor.

    The landbank will provide you with a document of the required repairs and an estimate cost of the projects. Some items I have found are high but most of the pricing is too low as the inspectors putting together the document aren't adding the full step to the line item. They may include painting the rooms for example but not to repair the plastic or to tape off the trim or scrape / clean walls. The Syracuse landbank is doing a good thing and can be lucrative but still, it is very difficult to hope for appreciation on these properties. Even with a full remodel it may be difficult to get the value back out. If your goal is to BRRRR -- doing so inside the city will prove difficult due to very little ability to increase value.

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