All Forum Posts by: Brian Ploszay

I disagree with some of the posts of this thread.  Sellers do often have some historical information about expenses.  Even for the smaller buildings.  Is it complete?  Usually not.  I always request and accumulate as much due diligence as possible.  I am flexible, but I find sellers (and brokers) to be somewhat agreeable to my requests.  Did this buyer lack experience?  Maybe, but if you're in the business of selling investment properties to beginner investors, then be prepared to hold their hand.  

My opinions:

1.  Lenza, or any customer, is correct in asking for expenses and any other reasonable questions he has to analyze the investment.  Including asking specific questions about the video.

2.  I personally find that many investment brokers marketing materials do not show complete, nor correct financial information, correct expenses or assumptions.  I create my own reasonable due diligence checklist.

3.  Often, historical expenses just don't exist, especially if someone is selling a newly rehabbed smaller building.  Quickly disclose this if that question comes up.

4.  Without calling out Wise for any misdeeds, his marketing should accommodate and answer questions beyond the video.  Good sales techniques accommodate the customer. 

Wise has spent a lot of time marketing his product and building up a brand.  This post looks to be damaging in that he comes off on this thread treating this formerly interested customer poorly.  "How long you plan on beating this drum my man? Spend your time trying to grow your business. Good lord."

Protecting one's digital reputation is important.  Right now, this seems to be a juicy and combative thread that continues to grow...

For an older building like that, probably keep the window units.  Unless the building is positioned as a higher end rental, the window units are fine.  As a landlord, window units seem to cause me less trouble.

Your stats are not dissimilar to other markets.  The answer is in the housing supply.  People aren't putting their homes on the market, creating a "temporary" low supply in homes for sale.  Low supply keeps prices stable.  I can't predict the future, but I can predict that change always occurs in the market.  Las Vegas looks to be one of the most affected economically by Covid.

The global dominance of the City was poised to be even more important in the 21st Century.  Cities will not empty out, but it is worthwhile considering a few events that occurred this year. 

It is not an unprecedented event for cities to lose population. Look at the 50 year population stats of older dominant cities, including Cleveland, Detroit, Pittsburgh and St. Louis.  For other factors, those cities have experienced a measurable population decline.

The pandemic will pass and people will feel comfortable in Cities in time.  In the short term, suburbs of places like New York City are absorbing housing demand from would-be City dwellers.

Another important trend may potentially outlast the pandemic - working at home / remotely.  If reports are true that home productivity is strong, then firms may have interest in the cost savings.  The per capita cost of office space is high in places like NYC.

And some workers like it too.  My thoughts really go to the Bay Area where employees want to embrace this.  The housing costs are too high for middle class residents, spurring some exodus of that region into other low cost states.  Facebook's Mark Zuckerberg echoed this, saying telecommuting will be increasing in their company.  Keep in mind, many companies cannot perform their work load without close collaboration.  Employees who work from home usually need to occasionally go to the office, and this limits the distance that employees can live away from their base.

Years ago, I heard of stories about hard money lenders who would fail to close.  I avoided all private lenders until recently.  It took several trusted recommendations before I used hard money.  It is expensive, but ends up being cheaper than utilizing a partner.  Great for short term, value add deals.  

@John Westbrook   Agreed that you can put the drain tile and a few other water proofing measures.  I find that most garden apartments in the City of Chicago don't have this system in place.  

I am not from Boston, but some of the economics are similar in my City.  Two units in decent areas never cash flowed well in my career.  Many of the buyers are owner occupants who are content with getting some of their mortgage paid on their pricey real estate.  

Strong markets, like Boston are expensive.  There is a shortage of housing stock (supply).  This translates into above average appreciation.  So some of the implied return is more appreciation that cash flow.

From my travels to Boston, as a tourist since I was a kid - the City has become more wealthy and gentrified.  It is a city that attracts top talent.  And some neighborhoods that were blue collar have changed.

There is a pathway to make the unit legal through the new ADU laws. However, yours looks not to qualify based on the egress issues you mentioned. Be patient and find a better deal. Do not invest in building out an illegal unit.

I wouldn't fixate on the age of the structure, but more on correctly estimating the costs of the work you want to accomplish.  Novice investors are going to overlook some very important items for the older buildings, especially masonry issues.  So you're right, a 60s vintage building probably has less risks.  A lot of beginner investors over the years started their first investment with a simple two flat.  And then graduate to more properties.  If you are buying strong locations, accumulate these properties and you'll do great in the long run.