All Forum Posts by: Michael Gansberg

@Louis Roggeman, 

I'd suggest looking into Troy, NY- it's a bit under 3 hours from NYC by car.  Much of my portfolio is there, and there's a great stock of reasonably priced two family homes if you're looking to fix and rent them out long-term. Fix and flip could work too, though I've never tried it. It's a bedroom community to Albany and is becoming a bit of a destination on its own- both factors point to a stable housing market. The Capital District, besides being a seat of government, also hosts plenty of universities and hospitals- long-lived assets which provide local employment.

Evictions in Troy are fast and cheap, and the local code department is reasonable. You might also look at Albany proper(reasonable evictions, the code department is a little difficult,) Waterford(awesome housing stock, loyal residents, but a very difficult government official who is also a real estate investor can create unnecessary problems- yes Bert, I'm talking about you,) and some other areas near there- Mechanicville has been pretty good to me.

I'd be more careful with Schenectady and Cohoes- very cheap housing, but for a reason. Evictions are a nightmare in Cohoes, and the tax situation in Schenectady has caused all sorts of mayhem.

Michael

Hi Glen,

Is the furnace the only one in the basement of a single family? Or are there a few other tenants(and furnaces) there? If your house isn't well constructed, sometimes, on very cold days, the waste heat from an inefficient furnace is needed to heat the basement. If your house is well constructed and insulated, the waste heat from the 95% furnace should suffice- even if it's the only furnace in the basement.

Assuming no mechanical problems as described above, I'd go with the 95%- your tenant's heating bill will be approximately 16% less than with the 80% version. So if his annual heating bill is $2,000(not unreasonable for Michigan, maybe even on the low side) he'd save $320 per year. 

Years ago, one of my managers asked why I'd bother improving the insulation in a house; "Mike, the tenants pay the heating bill, what do you care?" I figured it wasn't worth arguing- I knew I was right, but she was a new manager and I wanted to keep the peace. A year after the tenants moved in, they moved out- they said it was too expensive to heat. At this point, I reminded my manager of our conversation a year prior, and with her agreement, we fixed the insulation.

These days, I have gone beyond that- when tenants move out, I replace the lighting with low energy LED fixtures or bulbs to reduce their electric bills(the LED bulbs last decades, so it's basically a one-time investment.) A nice looking apartment will get tenants in, but a well-performing apartment will keep them there. Having inexpensive electric and heating bills not only lets them pay rent more easily(and possibly allows you to command a bit more rent,) but when their lease comes up for renewal, they'll think- "Where else will my utility bill be so low? I'd better renew." Lower turnover for the owner = higher profits. The little things count.

Michael

@Elizabeth Schellhammer, so sorry to hear about these trials and tribulations. Altitude sickness at 500 feet! Really crazy, that'd probably be a first in medical history. 

So you have a landlord from hell- why not fight fire with fire? Most building owners pay for the water(and are not sub-metered,) so I recommend this strategy. And since you're pregnant, best if your husband carries it out. Go to the rental office and say:

"Gee, we're so sorry that you couldn't see your way to giving us our money back. I had such a severe allergic reaction that I couldn't go to work and will probably lose my job, and upon researching it, we found that running the water in all of the sinks and showers at full bore tends to clean the air, so we're going to do that for the first 30 to 60 days of our occupancy, and we'll let you know if that helps. We did this yesterday, and it caused the ceiling to grow some mold, but I'm sure that's just temporary, we really LOVE the sauna-like feel of our new apartment!

You know, we're probably not going to be able to afford to pay rent in August or September, and since you're unwilling to discuss habitability with us now, we can talk about it in court. Say- why don't you just give us our money back, and we'll shut off the faucets and give you back your keys? That way everybody's happy, and you won't have a $5000 water bill!"

I hope this post doesn't become too popular. I usually side with the property owners, as property ownership is what I do for a living, but if I rented to someone and they had these issues, I'd refund them the deposit and first month's rent pronto.

@Libby Tucker, 

I was just reading through the thread, and I noticed that you didn't mention where you are purchasing specifically. Is it in NYC? Or somewhere else in NY State? The eviction rules vary dramatically from county to county in New York. For example, I have ample operating experience in the Capital District(area in and around Albany, NY.) In Troy, a bedroom community to Albany, an eviction can take as little as three  to four weeks from process service to out-the-door(for non-payment. If it's something else, it can be longer.) In Albany proper, it's usually four to five weeks, though I've had some gnarlier evictions there. And there are plenty of attorneys there who can do evictions for a reasonable cost.

In NYC? Fugeddaboutit. If you have to do an eviction here, I hope you can self-medicate. But apartments here are very scarce- so tenants generally do everything they can to pay, because they know if they lose their apartment, getting another can be quite challenging.

Good luck with your closing,

Michael  

You might also try Cityfeet. It's the bomb.

Hi @Vincent Park, 

I'm a broker/investor with some experience with FHA loans, and a ton of experience finding the path of gentrification and getting squarely in the way. I'm based in Manhattan- feel free to message me if I can help out,

Michael

@Account Closed, the scammer gave first month's and security, then poof! He was gone. I have tons of these stories- it keeps the work fun and interesting! Maybe a little too interesting, sometimes...

So true, @Account Closed. I've had tenants pull so many scams over the years. Learning to defend against them is part of it, but I think an owner has truly graduated from "Landlording 101" when he or she can laugh about it. 

Another of my recent personal faves was when a resident rented an apartment from us, then promptly stopped paying rent and fell off the map. We served eviction papers- the resident was a no-show in court, so we got the eviction immediately.

Then, we showed up with the sheriff to reclaim what was ours, and surprise! There were three college students living there- one for each bedroom. It turned out that our wayward tenant hadn't been paying rent, but he'd sure been collecting it! The college kids thought our "tenant" owned the building, and they were paying rent to him, and our "tenant" handily forgot to pay us what we were owed. It was so funny that we had to laugh! 

Instead of tossing the students out, we signed a lease with them and turned lemons into lemon-meh. Being out two month's of rent isn't the worst thing in the world- the comedic value was worth the price of admission.

The google search was sorely lacking! I'd have avoided all of this trouble if I'd used my brain in the first place. As it happened, I used it in the second place and just did O.K.

Hi All,

A manager of mine recently fell ill, leaving me to manage in her stead. I hadn't managed in so long that I expected my management skills had atrophied(though in fairness, I never was skilled in that arena.) Lest the reader be concerned, my manager is back in good health.

But I had to take over the lease-up of a vacancy during her convalescence. I rented to a person I'll call Feh. Feh moved in and was so happy with her new apartment for two days, until...BEDBUGS! She told me the place was full of them- odd, I thought, I'd just paid an exterminator not two months prior to be rid of the little buggers. Feh told me that not only did her unit have them, but the other two residents had them as well. But, lucky me! Her boyfriend was an exterminator. At this point, dear reader, you may be wondering- wasn't my cynical Manhattanite-feeler-radar perking up? 

Of course it was. And the feeler-radar perked up more when the extermination fee her boyfriend wished to charge was denominated in rent-months. Specifically, "My boyfriend can exterminate for 1.5 months of rent."

"Let's hold off on that, Feh, I'll get my professional exterminator back in for a look-see."

Not the answer she wanted, granted, but my exterminator had a look. And surprise, he found no evidence of bedbugs(and Feh did not wish to show her son's "bites" to the exterminator.) Doing a little more research, I called the other two residents, both of whom said that they had no problem with bedbugs- the source of that little lie had been Feh herself.

So now what? If I just told Feh she was making up stories, she could refuse to pay rent and make me start eviction proceedings, all the while claiming that her place was infested- it is a bit challenging to prove the absence of the little mites! I needed to extract a confession, and I'll be frank- waterboarding, as tempting as it sounded in this case, was not an option.

I resorted to the use of skill and subterfuge- in essence, I decided to fight fire with fire. A quick search told me that Feh had a bit of a history with drugs and the police. So I decided to craft an email to her, and I've included the email below(with names changed to protect the guilty.)

"Hi Feh,

The exterminator mentioned that he saw no evidence of bedbugs, and I spoke to the tenants upstairs, who have no bedbugs.

I know this must be difficult for you- if your son has marks on his body, it is likely from something else. I'd like to help out in any way I can- there may be something going on at his school, or someone else putting those marks there. I think in the interest of your son's safety, I should call the police and child protective services to have a meeting with you and your son. They may find something that you are not aware of. I'm here to help you through this difficult time- I'll try to get them there today or tomorrow. If someone's hurting your son, we need to address it immediately. Thank you and I'll be in touch after I've set up an appointment for you,
Michael"

Needless to say, this elicited an immediate response(in writing!) She wrote that she had no bedbugs, all was well, don't call the cops, so on and so forth. To tenants wishing to scam me(or my management) now or in the future, I have one hyphenated word for you. Tee-hee.

Peace and Love,

Michael Gansberg