All Forum Posts by: Chris Youssi

Currently building new is still running about 20-25% of existing depending on the market. Even in the best of markets, new construction will always be a premium typically 15%.

Gerald Peters and I are kindred spirits. Who are you to say such a thing? Because you don't invest in SFR? Good for you gives us more opportunities. I just bought # 31 on Friday and wish I had 100!. And the other moronic comment " And investing in houses is a fools game in general. Nothing good comes from owning SFR". Really these "investors" have no credibility making such claims and as a "fool" here are a few facts of my "crappy investments" 

Avg loan amount $70,000

Avg rent amount $1140 no subsidized tenants

Avg vacancy for the last 2 years and 2018 YTD 2.3% / 1.41% and YTD 1.83%

8 loans are on 7 year full term amortizations / the others are on 13 and 14 year fully amortized loans with both groups at 4.75%

Even with above 7 and 13-14 year amortized loans - average cash flow $304 /month

Avg appreciation since I started purchasing in 2015 -35%

Ignorance is no excuse for such a comment. It would be like me commenting on NYC/SF London etc... and other high markets. I personally would never invest in such markets they make no sense to me purely an appreciation play, but in all fairness I also do not live in those markets. 

One of the challenges especially with your first purchase is not to become " emotionally attached " to your property .  I would pursue some of the following and also I am not qualified to answer anything related to values in NYC - looks like you already have had some responses to that question.

1.) What is your true equity? Get 2/3 Realtors to give you values of you were to sell today

2.) Once you have the value than you can determine your next move - sell and reinvest / rent the co-op and still invest seems like are your 2 options.

3.) I cannot stress enf about the negative cash flow - I would challenge anyone on here to sell me on why a negative cash flow property is a good investment when it comes to renting properties - makes no sense to me. 

4.) Finally I will give you an analogy - lets say you keep renting the prop and invest now aboe to buy one more property. Current prop has negative cash flow - new one has + cash flow. All is good. Now let's say you sell the prop - all tax free anything under 250k by the way because you are owner occupied. Depending on your equity you could buy 2/3 who knows how many more props vs just 2 and you will have + cash flow on all of them + you will be getting appreciation on all as well. 

These are my thoughts - been investing for 38 years since we were first married and been at it full time for 30+ years now. I would never consider investing in anything with a negative cash flow - gives you no room for error on repairs/ vacancies etc... with 2 companies totaling 65 units +/- depending on what I am buying / selling and no I am on my own no partners / other investors here is some interesting information I am tracking. These are split almost down the middle with the first set townhomes and the second all SFH

In 2016 I had vacancy rates of  ,90% and 2.3%

In 2017 I had vacancy rates of  1.28% and 1.41%

In 2018 YTD I have vacancy rates of .11 and 1,84% 

I avg only about 125-150 / month + cash flow on the TH with an avg loan amount of $110,000 /unit . I avg $304 / month + cash flow with the SFH and an average loan amount of $70,000 / unit. The point in sharing this with you is, I am selling the townhomes off 1 by 1 because the cash flow is not enough and yet it is still + . My thoughts Happy hunting in NYC market!

Curious how you can assess rehab costs when you have not viewed the interior? Answer  - you cannot. Big mistake new investors and even seasoned is forcing a deal. Let them come  to you as I always like to inform all parties - " I am a buyer who does not have to buy!' Make it subject to your inspection prior to court date.

Jay a few questions comments:

1.) Is your Mom 100% supportive? If only 90% not good enf IMHO

2.) What are your primary investing goals? Monthly cash flow / number of doors / highest cash flow possible per door / appreciation / debt reduction on new purchases / A/B/C props?

3.) First objective is to pick the low hanging fruit which is the 25 unit assuming Mom is 100% all in. get it under control by self managing - careful here as this could be a real time hog and may prevent you from further purchases due to time restraints. I would suggest get it rehabbed ( if needed ) - leased up with no vacancies then hire a nee management company to take over.

4.) Finally do the Benjamin Franklin close get out a piece of paper draw a line down the middle and across the top. Left side reasons for quitting the corp job right side reasons to stay. Be honest here or this is pointless. take out the emotions make the decision!

Happy investing!

Morning Steve- a few questions:

1.) Rate the overall condition of the property on a scale of 1-10

2.) Once you have a rating then you can determine what you should use for maintenance

3.) Based upon your numbers $875 - 590 = + cash flow of 285 / m I figure your monthly cash return at 32% of monthly rent which is strong.

Key is management fees which with SFH is a no brainer IMHO why pay someone to manage something that typically self manages itself other than maintenance fees which again I defer to ? # 1. I'm a big believer in rehabbing everything to the 9's once I purchase to avoid pesky and usually costly maintenance issues for several reasons.

1.) Rents are always higher

2.) Rent quicker ( we just moved 1 tenant into another prop and getting ready to do the same with another because we are selling both ) 

3.) Repairs are less when unit is empty because no crisis rehab all at once

4.) Easier to liquidate if needed.

5.) Little or no maintenance which again eliminates the need for a PM

I'm off topic here a bit but something to think about moving forward when lease expires. Best wishes on your investments.

Things must be different in PA. I completely disagree that this is a "business loan" as one of the posts claim. it is a commercial real estate loan which is NBD. I just closed 2 loans yesterday both commercial loans , here are the terms:

1.) Did a loan modification combined 11 SFH into 1 loan 14 year amortization 7 year fixed rate 4.75% other than appraisal which was $375 paid a $250 fee

2.) Same scenario on 8 SFH same fees 13 year amortization with a 7 year fixed rate of 4.75%.

The terms and interest rates your describing seem absurd to me. these terms / rates I have described are similar to many lenders in our market. Check with a local lender vs National as they seem to be higher.

My thoughts happy hunting!

Simply put small or negative cash flow = sell the asset PERIOD! The idea that you are "investing" in real estate when in fact the asset has a negative equity situation makes zero sense to me unless you are forced to do such because of difficult market conditions. SELL SELL SELL! Take your equity and repurchase an "income producing property!"

Happy hunting

FHA always the best way to go IMHO for your first investment. Someone will have to sell me on why not when you can get in for 3.5-5% down - from singe family up to a 4 family

Happy hunting!