All Forum Posts by: Michael K.

@Adriel Cisneros I'd agree that when I hear the words "institutional" I generally think of a heavily managed, little personal involvement, and low return low-risk asset. Small deals are more likely to be mispriced and have room for operators to increase value - but are harder to consistently recreate. 

Maybe look at bundling a couple of these higher yield multi-units into a portfolio, so that you have a larger asset but also the higher yields that B/C class multi-units deliver. 

Quote from @Miguel Rojas:

Good evening, I'm currently an undergraduate student majoring in Finance. My professor recommended me to Bigger Pockets to connect with real estate professionals. Overall, this is an amazing site! 

I had a quick question, I'm very interested in buying a multifamily rental out of state. I know that's a big step to take starting off, but I'm from New York, so its tough to actually afford a property out here. Would love any advice on out of state locations that are great to start off in. I'm willing to partner up. Thanks! 

Since you're still in school, I'd suggest starting with rent hacking or house hacking in your own backyard. You're living in NYC proper so you're going to be looking at relatively high rent costs no matter what area/borough you live in. And for all practical purposes, reducing your cost of living is the same as adding an additional income stream. What experience do you have with real estate currently?

Quote from @Tomas Saenz:

Happy Friday,

I have been following BP on and off for the last few Years and this forum as well. Lot's of experience and smart folks on here. I am reaching for advice/tips/suggestions. My situation...

I purchased a short sale property in the Avondale Neighborhood a couple of years ago. Needless to say, I have been dragging my feet on the rehab of the property due to other projects/personal matters etc. however, no excuses it is time for me to put together a proper rehab project plan from A to Z including funding, rehab costs estimations, setting expectations for the work/milestones etc. The property is an older frame home that sits on a slab foundation. I have semi demo'd it however I am sorta stuck on where to start? I have not secured funding, established a proper project plan or design just yet. I would love to tap into this communities experience and ask how do you go about rehabbing a property? Do you have a check list, project plan charts? I am really starting from ground zero and my only experience was a rental duplex I rehabbed and flipped two years ago which turned out to be a solid deal/experience however I did sort of wing it. I want to do things the right way! any advice would be appreciated apologies for the long post. Thanks have a great weekend - Tomas Saenz

Hi Tomas, is this rehab for the purpose of renting long-term or selling? In my mind that is the first thing that needs to be determined. Based on your comment, sounds like the property is currently uninhabitable. I'd start by looking at rental and sales comps in your area to see what it takes to get a certain sale price or rent level. Get some people with experience into your building to give you advice, might cost you some extra $$$ up front but I think it's worth it if you're undertaking a big project. What did your flip entail?

@Allen Worley

You can have a month-to-month lease in writing, and technically any lease that expires is assumed to become a month-to-month agreement unless the landlord gives notice that they will not be continuing the rental agreement. I don't think it changes the calculus that much, since you will need to give the same notice when ending a lease regardless of whether the leasing agreement is MTM or year-long. The amount of notice is dependent on the amount of time the tenant has spent in the unit, and ranges from 1-4 months.

@Paul De Luca

Yes, I’ve come to start trusting my gut in these situations. I’ve had people provide references that I heavily suspect are fake, people with weird looking paystubs, false bank statements etc etc. been screwed over a few times for being too trusting. It’s hard to be sure because not everyone has normal w2 income and bimonthly paystubs. Credit score is the best indicator but sometimes people fall right on the borderline and as landlord we often have to decide weather to take the risk or to let the apartment sit another month.

What practices do you use that you find work?

@Ryan Bird

You can also appeal your taxes on your own if you care to try. The assessor’s website even provides a tool to help you do so. You will need to identify comparable properties that have lower tax bills, and provide those as evidence that your particular properties taxes are too high. You only have a small window of time to contest each year, so it can’t be done at any old time you like. Attorneys can also do this for you and will typically charge ~1/3 of the savings you get as a result of a successful contention.

@Daniel Lambert

The more units a property has the more it’s value will be derived from the income it produces. Single family homes and duplexes are generally bought by owner occupants, who are often just looking for a nice place to live. As a result they are competing against other people with the same goal. In these situations buyers typically don’t care to look at the rental numbers, because they have no intentions of ever renting it out.

@Bruce Woodruff

Require booking Friday and Monday with the weekend or something of the like. I even know people who have gone with a week long minimum. The people who only want 2 or 3 days will be many, but as soon as they book the few people who did want a week are left looking elsewhere. I seen similar behavior with my Airbnb, I’m guessing a lot of people are experiencing the same thing.

@Ngoc Hoang

Looking for a brokerage that will take you in is like trying to get a match when you are a hot girl on tinder, they will come to you. That said, there are some smaller boutique firms that are more selective and may consider you a liability and won’t hire new agents. Larger brokerages (basically any that you’ve heard of) have training programs and are more than happy to onboard new agents. Expect something like a 50/50 or 60/40 commission split as a new agent. Will increase as you close more deals.

Quote from @Brent Hasse:

Quote from @Michael K.:

Hey Brent, welcome! How'd you get into your first deal? What do the numbers look like?

 @Michael K. Like many of you, I rented right out of school and quickly did the math of how much my landlord was making so I knew I had to get into the business. I was lucky enough to buy a garden unit in Wrigleyville as a short sale in 2011, it took 11 months to close but got a great deal. Then we started looking for a 3 Flat with a good Owners Unit, took 2 years to find the right one and got it off market through my network. So renting the bottom 2 units out and living in the 3rd. House Hacking 101

Sounds similar to what I experienced, had been living abroad in a country where rent payments are a fraction of what they are here. Moved back home and experienced sticker shock, then immediately started looking for a way to get around paying rent. 

You mentioned proptech, what kind of work do you do?