All Forum Posts by: Dennis Cosgrave

I never looked at whether a recession is coming. I always looked at affordability. If prices/rents were rising much faster than incomes, it was just a matter of time before supply outstripped demand because so many people were forced out of the market. At that point, I would sell, keep my powder dry until the market corrected where prices were back in synch with incomes. 

Thanks Wy. I agree it is a little soon. I thought the new law was enacted earlier. Please keep us posted. I am trying to gather data on how these changes in the law affect prices such that if other states or cities plan to enact similar laws we know what to expect. 

No one can time the market so regardless of when you decide to invest, you have to be prudent. Make sure you have sufficient reserves, and that your cash flow is sufficiently positive so that if there is a downturn in the rental market the property still generates enough income to cover the fixed costs. When the market is peaking, as it now seems to be, it is not a time to be overleveraging. That can be dangerous and you run the risk of losing everything.  

Recently, the state of New York passed new legislation that is highly beneficial to tenants and some say is onerous to landlords. How is this new lawing affecting property values in the state, especially multifamily properties? 

I doubt there will be a recession in the USA in 2020. The same cannot be said for other parts of the world. Germany is on the brink of recession and China seems to be heading in that direction as well. The UK may also go into recession because of the uncertainty surrounding Brexit. The Fed is lowering interest rates because economies outside the USA are weak. 

Did you buy the property as an investment property or did you buy it for your personal residence? If you are living somewhere else (renting or owning), I would compare the numbers. It might make sense to move into it yourself, especially if you are currently renting elsewhere. The money you save on rent could go towards the needed repairs and make the home saleable. If you currently own another house that you are living in, maybe it would make sense to sell that house and use the proceeds to pay down the mortgage on the investment property to free up cash for the repairs and upgrades. It all comes down to the numbers.

Most of you seem to be ignoring the elephant in the room. Marriage is supposed to be a partnership where both parties work together to build a future. If both parties cannot agree on a plan, what is the basis for the partnership? I am sure that there are many divorced people out there that split up for this very reason. If one party has to make all the compromises while the other makes none, it will only lead to resentment or worse later on. 

You need to familiarize yourself with the price of serviced lots versus unserviced lots. If there is a big difference, the first thing you would have to do is file a plan of subdivision. Once the plan is approved, you can do the development in phases. The proceeds from the sale of phase 1 serviced lots can pay for the servicing of phase 2. You continue the process until the development is complete. If you don’t have the cash you can set up a joint venture with the owner borrow the cash to service phase 1 and the rest will pay for itself. When the servicing is complete, you split the profit with the current owner of the land. 

The building currently has 3 vacant units. I would suggest that you renovate one unit to bring it up to par with market equivalents and discover the true market rent. Once you know what the true market rent is you can plan accordingly. I don’t know if there are common interior hallways or other common areas. If so, I would upgrade them to give the building better curb appeal. Once the vacant units are renovated and rented I would then start rotating the under market tenants out. When the renovations begin, the under market tenants will see the writing on the wall and will likely move out on their own. 

I had a similar situation with a 10 unit building in Florida. When I took possession, 3 units were vacant. I refinished the exterior, renovated the pool and updated the landscaping. I renovated the 3 vacant units, and before they were even finished I started getting notices from the remaining tenants. Of the original tenants, all of them except one moved out within 90 days. The one that remained agreed to pay the higher rent. He was thrilled with what I had done with the property. 

I agree with Taylor L. Sounds like a timeshare. The litmus test is, do you have a deed to anything or are you just signing a contract promising an ROI of 8% and the right to use a unit (or specific unit) one week per year? I have seen deals where you actually get title to a specific unit, but you sign an agreement that allows the developer to rent it out for 11 months of the year. It costs you nothing besides your original investment and after 10 years you own it free and clear.