All Forum Posts by: Greg Horowitz

Braggtown area of Durham seems like an excellent spot to invest in. Anyone active in this area? Seems like there is a lot of opportunity and more homes are beginning to be flipped. Prices seem to be steadily increasing and less than 10 minute drive to downtown Durham. Interested to hear from anyone who is active here.

I am looking at purchasing a small portfolio of SFR properties below market value. I am interested in putting long term debt on the portfolio, however, I wanted to know if anyone knew any lenders that lend based on an appraised value rather than purchase price. Sounds like the typical strategy is to buy with a hard money loan then refi in 3-6 mos, but wanted to see if anyone knew any lenders to avoid typical short term financing fees. Thanks

Hey Stephen. I am also based in NYC and have looked at investing in Worcester. My wife is from the area, so I am familiar from traveling up there every now and then. I put an offer on a 10 unit property in the fall, but eventually was outbid. I am seeing a lot of good things happening in Worcester and believe the new stadium will continue the positive trend. Just curiously, how are you managing the property? Do you have a property management company? If so, what is the fee they are charging?

@Rein Garcia I would be interested in learning more about this portfolio as well. Please message me your info and we can chat further.

Eddie - great work and thank you for sharing your story! Once you stabilize over 90% occupancy you should be able to refinance. Freddie Mac and Fannie Mae have small balance loan programs which is a great way to cash out some money and secure non-recourse debt at low, long term interest rates. I have experience with these programs and would be happy to discuss with you in greater detail. Feel free to PM me for more info.

As others have stated I would only sell if you have another investment in mind where you can use a 1031 to defer taxes. 

Best of luck!

@Hadar Orkibi I am more asking about the R&M specific expense line. I am accounting for utilities, insurance, advertising on top of my $750/unit. I am more asking to see if people have experience with older properties and the maintenance issues they have required. I agree that $750/unit is way too low on total opex. To better assess the expense items in a market is there a specific reference or website you use? Having not invested in this market yet it is difficult to know the true expenses per unit. I have looked at sales comps in the market, but any other ideas would be helpful.

The roof is flat. I definitely will have an inspection done and contractor walk the property to check everything out. The tenants did not acknowledge any issues they are having and my take away is current owner is hands-on based on the condition of the property. Having a mason inspect the exterior is good advice and something I had not thought of. Thanks for the help @Eddie Werner!

I am looking at investing in a 10 unit property in Worcester County, MA. I am underwriting the property and having trouble estimating the expected maintenance. Obviously with an older property there tends to be more R&M than a newer property. The property is a brick building and the roof and boilers have been updated in the last 3 years. The property is occupied by low income families that have rented at the property for a few years. The property averages about 2 units turnover a year, minimizing the amount of turnover repairs needed. I am trying to estimate the R&M expense and currently have $7,500 annual expense plugged in ($750/unit). Is this too aggressive? Does anyone have experience with older properties that can opine? Thanks

Greg Horowitz

15yr fixed loan for 5.25% is reasonable in today's market. Does the loan amortize over 15yrs as well? If your goal is to pay off the loan and own the property outright in 15yrs then this is good. However, if you are looking to increase monthly cash flow to earn a better return then I would suggest looking for longer amortization (25 years is typical) and possibly 80% LTV. Valley National Bank is willing to get to 80% LTV in certain areas of NJ.

As far as the 1% orig fee, this is somewhat standard although you may be able to negotiate them down. Try to push back for 0.5% and see if they will budge.