All Forum Posts by: Michael Gansberg

Hi @Matt R. - good to hear other investors are doing the LED thing, I’ve done the same, though management is a bit resistant and doesn’t necessarily share the vision.

As far as LED globes- search “LED globe filament” on Amazon, you’ll get plenty of options to solve that micro-issue. Make sure you go with a 2700 K color temperature and a high CRI(greater than 84) if possible, those are important for bathroom fixtures.

MG

@Thuy Pham-Satrappe Thanks for bringing this to my attention. It seems like a good way to boost income on vacancies, but I read through ALE's Yelp reviews, and wow, the animosity towards this company is palpable. There are some happy reviewers, but the ratio of negative to positive reviews is enough to put me off.

@Logan Edmunds I think the value of your time along is an important factor in deciding on REITs or direct ownership. Don't have the time/inclination to self-manage, or interface with a manager? REITs might be better- in theory, the share price(or what you pay) takes management into account. Want your liquidity available immediately? REITs are better for that. Tend to trade stocks too often and when you shouldn't? Direct ownership might be better.

In theory, with REITs, you're paying professionals to own, acquire, and operate real estate, so you shouldn't have to pay as much attention. That's the theory. In practice- who cares about your money more than you do? Nobody. So while I once invested in REITs, I prefer direct ownership now. It gives me control, my mistakes are my own, and there are no opaque, inscrutable accounting books. You can listen to all the quarterly conference calls of a REIT, read all the quarterly and annual reports, and you'll still have the smallest fraction of an idea as to what's going on when compared to what's happening in your own portfolio of directly-owned properties.

MG

Hi @Rashad Walser - personal relationships can be valuable. Or they can be worthless. Take the community bank I've borrowed from for almost a decade. After a few loans, I knew most of the higher-ups involved in the loan process, and they knew me by my on-time payment record. Getting loans was fast and streamlined.

Fast forward to 2019. I wanted a loan on a project, so I texted my main contact there, and found out he wasn't there anymore. Nor was anybody else I worked with- everybody, gone in a puff of smoke! The bank had been gobbled up by a larger bank. Now, nobody there has any idea who I am. Sad!

@Account Closed  I think we've all been there. As an early landlord, I got upset when tenants didn't pay, and sometimes got into verbal fights with them. On one occasion years ago, I even got cornered in an apartment by two recently evicted tenants wearing full coats on a warm summer day. I was convinced that they were carrying weapons. I talked my way out of it(and later learned that one of them went to prison for knifing his brother- the brother lived.) It was kind of funny, actually. The apartment was being cleaned and repainted, so there were a few people there- but 4 PM came, and that was quitting time; the painters and cleaners vanished, leaving just me and those two guys. 

Later in my career, I began to accept their inability to pay as human error, and I lost my anger during the eviction process. I spoke to outgoing tenants respectfully, even when they were mad at me. It seems like this is the phase you're in. That's a good place to be.

Since then, I've had the buffer of management between me and an outgoing tenant. That insulation is helpful, but management sometimes conveys messages from tenants who are upset. If scale allows you to insulate yourself this way, it may be a good idea. 

MG

@Charlie Moore - here are some ideas to help. I waited on an LLC until I had about ten multifamily homes(mostly 2 and 3 unit houses.) I wish I could say it was a logical thought process that caused me to start an LLC, but actually a drug dealer took over two of three units in a house, turned it into a pharmacy(not a legal one, of course,) the cops initiated a no-knock warrant, they knocked the door down the day after Christmas, the pipes froze after the drug dealers were hauled off, and just general pandemonium ensued from there! So my wife kinda panicked, and said, "Maybe you should put your houses in an LLC?"(there was actually a good bit of yelling and some words that I can't put here, but I'm PG-13'ing it down for the wider BP audience.)

Where was I? Oh yes, Pros and Cons. 

Pros: Asset protection(though it's imperfect,) anonymity(though that too is imperfect,) gravitas and name recognition(though...well, you get the idea.)

Cons: Cost, sometimes harder to get loans(this one depends on a few factors.)

Hope this helps, MG

@Katherine Hong Happy to help. My wife and I are on a farm this summer, we take breaks from the city occasionally. I'd be happy to meet up in the fall sometime.

If you move ahead with something in the Capital District, would you update us on this thread? I'd love to hear about your progress. Good luck with your investing!

MG

@Katherine Hong - I’d be happy to. Considering your post, I’ll suggest a way to insulate yourself(a good closing attorney will suggest the same.) 

When buying a multi-unit, try to get a letter from the local government stating the unit count. For instance, if you’re buying a 6-unit, and they provide a letter(on their letterhead) stating that an acceptable use of the property is as a residential 6-unit, then it will be hard for the local government to tell you later that the building only has 5(or fewer) units.

Hope this helps! MG

@Jay Hinrichs - thanks for starting this conversation. I’ve been curious about the economics of rent control as long as I’ve been an investor(16 years.) An economist I once listened to put it this way regarding gentrification(which in some ways is the opposite of rent control): 

“When nice apartments are built, people fear being priced out of a neighborhood. Why is nobody concerned when nice cars are built? Because they know that a really fancy car won’t impact the availability of affordable cars.”

Rent control appears to be a long-term negative for society(or, at best, it’s close to neutral.) But we landlords deal with government regulation fairly often. My eviction attorney blew his stack at the recent regulations from NY. We can cry and gripe about it(ok, I did a bit of both of those,) or we can figure out how to make more money because of it.

My main PM said to me the other day, “These regulations will put the little guy out of business!” I replied, “Good! Let’s get ready to pick up some cheap houses.” 

Ok, pep talk over, everyone, now get out there and adapt.

MG 

@Christopher Copley - good luck on your investing journey. I started similarly- living in NYC and wondering where to invest. I started out by investing about 2 hours north of the city, and spread to other areas. I believe there's plenty of opportunity in those areas, as well as areas a few hours west of NYC(NJ and PA) and northeast of the city(CT for example.)

Being able to reach your property by car is superior to having to book a flight, IMHO.