All Forum Posts by: Richard M.

Daniel - 

I've started looking into this neighborhood as well, I think your location matters a lot! Not just the neighborhood, but your specific block so be sure you've thought about that.  

For example, there's a completely renovated 2 family brownstone in that neighborhood now listed for $1m (original listing was $1.2m months ago) and it's been sitting on the market... Why? I'm going to guess because it is across the street from a housing complex. 

The fundamental question in my mind is: What is going to drive migration to this area? Schools? Safety? Commute time? Cheaper rents? Culture/cool factor? 

This neighborhood has been so bought up by financial players looking to get a piece of the hyped up Brooklyn brand. Is that going to continue? Maybe, maybe not. At least you recognize this is an appreciation play and are going in eyes wide open. Some people might call that speculation, but living in NYC... that's the life we chose. 

Also, I think you left out turnover costs in the above. When you get new tenants, how much does it cost to get the place rent ready? I'm going to guess it's more than 0. 

Good luck buddy. Please keep us posted. 

Godspeed. 

For anyone not paying attention to what's actually going on in Bed Stuy, 12 flip projects were robbed in 1 week within the boundaries of one police precinct. 

Yet a brownstone SHELL is going for $1.5 million on Loopnet with the wholesaler claiming it's worth $2m. 

Be careful out ya'll. For all you brave souls venturing into North BK: If you didn't get robbed by the wholesaler, your construction zone probably will be. 

I'm curious where others are storing their savings/capital (i.e., down payments, etc.) given the low interest rate environment, negative yields in sovereign debt markets, and US stock market at all time highs - in lots of ways the markets seem discombobulated and signalling different things. The only thing that seems certain is uncertainty. 

I'm about to take the bulk of my savings out of the market (mostly index funds) and store in 1% savings as I'm most focused on capital preservation because I anticipate needing to deploy this capital in the next 2-3 years. 

What are others thinking?

Cheers

Rich

For those in New York State, I'm not a lawyer but it appears to be illegal to force tenants to pay rent electronically.

 Real Property Article 7 Section 235 - G

§ 235-g. Electronic billing and/or payment of rent. 1. A landlord shall not require a lessee or tenant to use an electronic billing and/or payment system as the only method for the payment of rent. A landlord shall not assess any fee or other charge for a lessee or tenant that chooses not to use an electronic billing and/or payment system. 2. Any agreement by a lessee or tenant of a dwelling waiving or modifying his or her rights as set forth in this section shall be void as contrary to public policy.

http://public.leginfo.state.ny.us/lawssrch.cgi?NVLWO:

thank you @Robert Lum I stumbled upon #3 myself.

www.Nolo.com is a great resource for quick legal reference and even has tips on how to find a great lawyer and save on legal fees. They have some great books that explain the law in plain English. You can also get referrals through that site as well.

Another thing I'm trying is to find lawyers who've authored helpful books or articles and contacting them directly. That's how I found my lawyer for my first purchase. 

The bottom line is that a great lawyer serves a role but knowing the law and general best practices should be every investor's priority. 

As the saying goes: an ounce of prevention is worth a pound of cure. That's why I'm thankful for BP and The Book on Managing Rental Properties. 

Does anyone have recommendations for an good/aggressive lawyer who is experienced in Housing Discrimination Defense in New York City?

I've heard frivolous lawsuits are unavoidable but never thought it'd happen so soon (first tenant). I feel like I'm starting to grow my landlord wings. 

Thanks in advance!

Also, anyone know why there is no lawyer section under the Real Estate Professionals forum?

Thanks @George Hermann. I did a bit of research and I'm not a lawyer (so people should definitely consult a professional on their own situation) but here's what I've figured out:

WEAR AND TEAR

There doesn't appear to be a legal definition of "wear and tear," and I think this is where tenant-landlord security deposit disputes arise from.  One streeteasy.com writer made an interesting point: "This is not the criminal justice system where there are multiple degrees of culpability. Whether you were the direct perpetrator with intent or a passive witness to a crime, you’ll be liable and penalized for the crime if it happens under your watch. The crime in this case being damage to your apartment."

Helpful resources: 

http://streeteasy.com/blog/what-is-normal-wear-and...

http://www.nolo.com/legal-encyclopedia/chart-clean...

PAINTING (IN NEW YORK CITY)

NYC Housing Maintenance code requires painting every 3 years in apartment buildings of a certain size so if you need to repaint a unit due to tenant's actions after an occupancy of less than 3 years, tenant may be responsible for the new paint job.

§27–2013 http://www1.nyc.gov/assets/buildings/pdf/HousingMa...

http://www.nytimes.com/2000/10/01/realestate/security-deposit-deduction.html

CONCLUSION

I will pro-rate the cost of refinishing the floors to tenant (based on areas where there are DEEP scratches not shallow ones).

Paint and cleaning will be tenant's responsibility. 

Hope for the best but expect the worst: Prepare for a lawsuit from a tenant that has his/her own opinion of 'wear and tear': Document everything. pictures, written communication. send move out package and perform move out inspections. 

Hope this helps other newbie landlords going through what might be the most expensive landlording process.

Does anyone have any good New York City based lawyers with real estate investing experience?

I meant cleaning and *repainting, not reprinting.

I'm preparing for my first unit turnover and am trying to determine what is reasonable to deduct from the security deposit. There are some fairly deep scratches in the hardwood floor but unless I want mismatching areas on the floor I must buff and refinish the entire unit. Is it reasonable to deduct the cost of refinishing the entire unit or am I better off pro rating it based on the damaged areas ( ~65% of the unit)? Also, in NYC it is not common to charge for cleaning and reprinting but assuming these are needed, any reason not to deduct these costs as well? Curious to hear what is common in other areas as well as feed back from people in New York City. Thanks in advance all! Rich

Thanks very much @Paul Timmins @David Ebbeson for the helpful tips and words of encouragement. It's a bit frustrating starting out in one of the most expensive RE markets in the country during what arguably might be a frothy market (if not outright bubble). 

The hard part is being patient and not becoming a speculator. I think sometimes newbies are eager for their first deal and consequently rush into bad investments. I just started Gary Keller's The Millionaire Real Estate Investor (which I bought used for $1.99) last night and I see why people treat it like the RE bible. I feel like I've found the light. 

Thanks again all!