All Forum Posts by: Matthew Drouin

@Ethan Anderson a commercial appraiser can give a valuation on an easement.  We just bought an easement from the City Of Rochester and they hired an appraiser to give a third party valuation.  The other thing you want to consider is not just the monetary value of the easement but the opportunity cost associated with giving up those rights and if it encumber the value of the rest of the property!

@Alexander Zeisberg do title companies handle the transfer of title of MH in your state?  I used to manage a few MH communities in Michigan and oversaw transferring of titles when our residents sold their homes.  As long as there wasn't a lien recorded on the physical title itself then there wasn't an issue.  But I'm not familiar if title could get clouded from another mechanism at the state DMV for instance

@Terrance Coleman congratulations, you are officially now part of the 6% club.  Did you know 94% of Americans don't own a single investment property?  Give yourself a pat on the back.  This experience will a tremendous value to you and your investing career!

@Ariel Ramira great! It's going to take some time to figure out what direction you want to go in. But in the meantime, if you own your own home and assuming you have equity, get a home equity line of credit (HELOC). Local credit unions love doing them and they cost nothing up front and if you don't tap it then you don't pay interest.

Credit facilities like HELOCs are going to be an important tool regardless of what market you choose or what type of strategy you pursue.

In agreement with most of the other people here.  Go to meet ups and then book one on ones with people you meet there that can help you develop you own roadmap.  I still wouldn't rule out investing in your own backyard, even if cash flow is non existent.  Cash flow isn't where you build wealth, it's asset appreciation and debt paydown.

This equity that you can quickly build in more expensive markets can catalyze your growth.  That being said, I just researched Salem on Costar and it looks like Cap Rates are more favorable in the 6% range and the per unit sale price averages around $159k a unit.

SHORT THE DOLLAR

Both candidates, Trump AND Harris are inflationary... in their own way of course, but I don't care.

They and the majority of congress are under a "deficits don't matter" regime.

How do I short the dollar?

I borrow dollars from the bank and immediately sell those dollars to owners of commercial income property that I want to own.

And then I buy those dollars back over time using the cash our tenants pay us in exchange for using our space.

I'm currently shorting $10M and I can't lose regardless of who wins on 11/5

By the way, the dollar will always decline in value so this thesis is applicable in any election or economic cycle.

Go vote for whoever you feel strongest about, but remember you have infinite more power and that which is within your direct control.  I on one hand focus on local politics, because I can have a relationship with my state senator, assembly person, mayor and city council people.  Those efforts have a way better return on investment!

@Cory St. Esprit
Have you checked with a local architect on this?

Local building codes are going to dictate the options.

I researched it several years ago and it ended up being cost prohibitive because of these reasons: 1.)  I was going to have to build an interior fire rated stairwell.  Steel fire escapes have been banned in many states. 2.)  I was going to have to have the third floor sprinkled and have a commercial fire alarm system installed. 3.)  I was going to have to get a zoning variance because the subject property was in a low density residential zone.  When I added all this up, it was going to cost $150k in a neighborhood where sales comps trade for $100k per unit.  That being said, I scrapped the idea and bought another rental property.

One hack to consider, a colleague of mine finished a third floor, made the third floor the living room and kitchen and the second floor the two bedrooms because that scenario avoided the need for a second means of egress.

@Ariel Ramira do you currently own your current house?  The reason I ask is, I always encourage people to invest in their own backyard, even if it’s an expensive market and start with owner occupying a multi family.

Let me know!

@Chris Miller history doesn’t repeat itself, but it does rhyme.

I remember 2006, and how the fed was engineering a beautiful soft landing and everything was great and home builder stocks and banks and investment banks were THE stocks to own because all the data was pointing to a rosy future.

The only data source you would need is the yield curve.  Short term rates were 5.5 percent, two and a half points higher than what cash typically pays.  That’s a signal

@William Coet it’s a different business model altogether.

I love highly desirable areas that attract highly skilled high income college educated workforces.

They tend to be more liberal and therefore the landlord tenant laws.

The percent of their income that goes to rent is typically much less than 20% so a rental increase of 5-10% is nothing to them.

They are typically lower cap rate areas and therefore every dollar of net operating income that is earned is explosive to the underlying asset value.

@Jay Hinrichs there’s no data really just stuff like that that I keep hearing and witnessing myself.