All Forum Posts by: Mike Alt

I just wanted to point out here that the laws state that the max you collect is $20.  In this case, you are not collecting a fee, the COZY is.  You have a requirement for acceptable background/credit checks.  Tenant's job is to provide you one from an appropriate vendor.  You make a recommendation for them to use COZY as your preferred vendor, but they are not obligated to.

FWIW, I don't charge any application fees -- that seems onerous to me.  I do require acceptable background/credit from all tenants.  I use cozy for the screening and never have an issue.  All adults get screened.  It is usually just a formality at that point anyhow since I make them self-state their credit and background history, which weeds most of the bad eggs out.

Recently acquired a property in the City of Syracuse that needs a new roof, but I'm getting mixed responses from roofing companies about operating in the city and the steepness of the roof.

Anyone have a recent roof done in city limits? Who are your go-to roofers for rental properties inside city limits?

Good luck!  I have had good success in this price range over the last year.  Tread carefully but you can find good ones in the piles of garbage.

@Aaron K. I have to disagree, to say "the inspection contingency is the only thing protecting you" is to assume 0 personal responsibility and a surefire way to end up with sour grapes.

@Troy Rasmussen Given the property is in Syracuse and they are letting it go for $68k you can rest assured there are a plethora of deferred maintenance and probably outright defects with the property.  I stopped writing "inspection" contingencies in most of my offers in Syracuse and instead write a blanket "due diligence" contingency that is either 7 or 10 days, depending on my schedule.  I also write in all units must be viewable for me to do a "contractor walk thru" during the due diligence period and I can back out for any reason in the timeframe.  I also write all my offers with AS-IS condition.  

For whatever reason, this has helped me get through to more accepted offers than I was getting previously.   Granted, the offer isn't fundamentally any different from the boilerplate offer.........

I do the same walkthru inspection I would have otherwise done.  

I can still back out or try to renegotiate offers, even though I agreed to AS-IS.  

What it does (I think) is frame the offer more aggressively as an investor who isn't going to dick around and I make sure my agent communicates the same.  I try to think of my offers as a piece of marketing material.  Write a strong offer that stands out and sound sure of the closing.

That said, I can virtually guarantee the inspection report is going to come back a complete turd at that price point if you're in the city of Syracuse or surrounding areas.  What you should be doing is making sure you don't get any unexpected surprises that you haven't budgeted or accounted for.  

I still actively invest in Syracuse because I already have the network and connections and affordable property management in place there.  Trustworthy property managers and contractors are few and far between, so when you find them, treat them right and keep them happy. (duh)

 Money can be made, but there are better markets.  Property management and upkeep and taxes get most deals pretty close to 0 cashflow, unfortunately, unless you get a killer deal or do a significant value add to minimize capex.  

Winters are brutal on the aging housing stock.

Tenant laws in NY have recently swung and make it extremely difficult to evict tenants for non-payment.

Combined Prop taxes are around 3.5% in the city.

NY legislative body mostly interested in passing regressive (progressive) policy and making the situation worse.

@Cory Finniss and you need it to make the numbers work..............1% rule in Syracuse MF is borderline losing money in almost all cases due to high capex and property taxes.  

Hi @Amit Chaudhari -- It's just not a very good return.  Your yearly repairs might be a little on the high side for a building that size, but it's a student rental, so you are right to budget a little more.

As the other poster said, renting by the room brings a whole different set of challenges and higher property management costs associated.  I have no experience in this area.

You will need to figure in property management of at least 8-10%, so let's say $550.

Summers will need lawncare/landscaping and winters will need de-icing and snow removal.  You're probably a smaller yard, that runs about $30 a cut so you'll get off cheap, but in the winters you definitely don't want a drunk college student slipping on your pavement and cracking their skull.   Snow removal will run you a few hundred bucks a month on peak months, so let's average at $200/mo.

So now you're at $1150 a month, and you haven't factored in vacancy or the maybe (?) possibility of a tax reassesment when you sell so far over the assessed value.  

It's not a loser of a deal, but it doesn't appear to be a homerun either.

You're paying $64,000 per unit in student housing for mostly 1 bedrooms, it sounds like.  That's not comparable to the costs in the area as a whole, from what I've seen.  Smaller buildings like duplexes are selling at 50k a unit for 2/1 (not right on SU hill though) and rent for $800/mo.  You do pay more over there on SU, and I don't own anything in that neighborhood, so possibly depending on the location it's a good deal?  

Maybe you can cut your costs a little by self managing or doing your own repairs, I don't know. But that sounds like a low paying job to me.

From what I've seen in the area, you need to do substantially better than the 1% rule to make sense in the City of Syracuse because of the high property taxes (~3.4%) and high cost of capex with the brutal winters and relatively low income population.

That's just my observations, I'm by no means an expert.  

I have 11 units in Syracuse.  This is not a deal I would pursue. 

It was in the Tipp Hill adjacent area.  Syracuse is block by block, so be careful.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $36,000
Cash invested: $50,000

Purchased 2000sqft 4br 2ba home in the city for $36,000. Invested about $50,000 into it renovating it (over budget). Renovation finished and will rent for $1350. Should be able to refinance with ARV of $120,000, recouping most of my investment.

What made you interested in investing in this type of deal?

I was more interested in the experience doing a full rehab, managing it long distance.

How did you find this deal and how did you negotiate it?

MLS. Shown via video walkthru by my realtor. Initial offer accepted and negotiated down even more after negative inspection report.

How did you finance this deal?

Cash

How did you add value to the deal?

Complete renovation

What was the outcome?

Renovation completed and waiting to reach 6mo seasoning period for a cash out refinance.

Lessons learned? Challenges?

Old houses are old.