All Forum Posts by: Jeffrey Morrisey

I just received my New York state Articles of Organization for my LLC. I payed a lawyer to form the company as part of an acquisition I'm making.

They used my personal physical address instead of the registered agent I provided. Is this a new York state specific thing, or did they fill out my paperwork wrong?

This is the big issue I see with evictions. All of the people set to be evicted this year for non payment are going to end up on the streets with a big black mark on their record. Investors won't rent to them, and many to most of them will not be able to get a bank loan for their own place. I think it is likely we will see some sort of government mandated and backed loan program to assist these individuals in getting their own homes eventually.

I just want to stress a little caution on this topic. Some of the info in the thread is a little behind the times from a banking perspective. For context, I managed a post foreclosure conventional mortgage claim department at one of these mid to large US banks during the pandemic.

Chances are, we aren't going to see another 2008-esq situation. Banks before didn't have any idea how to handle that kind of inventory, weren't able to scale repairs, and calculate accurate pricing on all the homes they had. They are much, much better now.

In my opinion, the most likely scenario we'll see is a smaller uptick in foreclosures, but a good amount of short sale opportunities. 

As someone stated above, the foreclosure uptick is mostly going to come from the flood gates opening on things currently in their pipelines. Banks have now been sitting on a year and a half of inventory in most cases. Things are at a crawl. However, new foreclosure inventory is not going to be in the same spot. The relief acts that paused foreclosures made it so that any and all non payments can and will be turned into a "bullet payment" that is due at the end of your mortgage term or when you sell the property.  In fact, I have seen a letter sent by several US Senators that was sent to the banks stating that if they hear about banks even suggesting to their customers that the loan balance is due immediately, they will go after them with full force and tie them up in regulation for years to come.

But, that doesn't mean you won't see an increase. All of the banks are going to attempt to go through a loan modification process with the customers to get them squared up. There will be a percentage that refuse to answer phones and letters and will basically allow the foreclosure process to happen out of fear and lack of understanding on the subject.

As stated above, I think some of the best opportunities will come from short sales. Banks can't handle this level of volume all at once. They can't even staff up for it right now because they aren't sure if that foreclosure deadline is going to move again. Because of this, they will most likely be open to short sales just to decrease some of the volume they have. Think of a snake trying to eat a pig. It's a large amount of loans trying to move through a well oiled process that is only built to handle 10% of that volume at a time. Processes, databases, and procedures will break because of this. Now, if these short sales will be profitable for investors is another story. That will depend more on the location and the market.

@Peter B.

Thanks, I’ll make the call on Monday. 

So, it does appear that I might be way over estimating here. 

Hi BP,

I have a question about estimating future property taxes. I’m looking to invest in small multi family buy and holds. My area (Buffalo Ny) has had home prices skyrocket over the past few years, as many other areas have. The issue is many of the houses were last assessed 10+ years ago. So, a house listed now for $210,000 May have an assessed value of $70,000 and property taxes of $3,000.

Now, buying the house won’t necessarily trigger a reassessment, but I know of cases where it has. Even so, eventually the house will be reassessed at the higher value.

I’ve been using a straight multiple to try and project taxes.

210,000 / 70,000 = 3 3 x 3,000 = 9,000 in property taxes.

I can’t figure out if I’m being to cautious here. I haven’t found any articles, or posts about projecting property tax increases. But, Buffalo can’t be the only area that’s experiencing this issue.

So, I’m wondering what you are doing! Are other buy and hold investors trying to project out property taxes? Using the current taxes? Or, using some average to try and split the difference?

Any advice you have would be greatly appreciated!

Jeff