All Forum Posts by: Ronald Starusnak

Hey Meghan, I am a contractor and property manager but not in Albany so I can't help you with that but I can answer the other question. Do not show tenants unfinished properties, we do it sometimes but if you bring a potential tenant into the property and explain to them what it's going to look like when you're done, you're setting yourself up for a nightmare. 

After they move in there will be an endless list of things they claim you said were going to be done and it can be very hard to please them. Tenants also fail to visualize what you're visualizing. If you want to post it up now, go ahead but don't mention the impending remodel, don't listen to ANYONE'S STORY. Look at their income, verify their income, check their identity, and call the past references. 

They will be your tenants, not your friends. It might even be a good idea to not even tell the potential tenants you own the property, they will start spewing manipulation by instinct and you won't see their true side. 

No "legal rights". Who is the property deeded to? Is it deeded to an LLC that your parents own with the individual 50/50? If so, what does the operating agreement say? If the operating agreement doesn't say anything about it then there is no recourse for either side. It wouldn't make it illegal even if there was, the other partner would have to sue civilly. If he is truly in belief that the property is worth $700,000, have him order an appraisal.

 Hey, I would refinance it right now into a fix n flip loan. They will give you the money to rehab and you'll already have all of the equity to close so you'll only need to pay closing costs and probably escrow taxes. Contact Nate Morse with Lima One nmorse[a]limaone.com - I won't usually buy anything with cash if I can help it. Even if I have the surplus funds available. Easier to just get a flip loan and pay the holding costs associated with. 

As long as it's not falling off then you're fine. Home owners can re mediate it themselves without a license. 

That's about the going rate for windows. You got lucky with the $125 ones. 

There is no limit because it's an "Option Deposit" they're not paying a security deposit. They're paying to have the option to purchase the property at a fixed price on or before a fixed date in the future. It is my recommendation to keep this amount relatively low, IE $3,500 or less. I've spoken with a friend of mine who has a lot of experience in this field (more than I) and he stated that some Judges may look at the amount you received as the option deposit and could force you to FORECLOSE instead of EVICT. 

It doesn't really matter what the law is, there isn't enough CASE law on this subject and the Judges will decide at their own discretion. They typically err on the side of the Tenant. If you're requiring your Tenants to also hold insurance (with you as additionally insured) and pay taxes (or reimburse you for them) it could further hinder your ability to EVICT instead of FORECLOSE. I have not gone through this myself. 

Syracuse Property Management: http://renpro.org 

Hey guys, in the past few years my primary focus has been on fix & flips, new construction & remodels, and generally working on things where we made great money as a company but even with a good reputation and lot of leads coming in for construction I felt limited. We could always add more employee's & amp up the volume of work we did but I was still stressed constantly. I had this hidden force looming over my head because I knew that if I stopped hustling it would only be a few months until everything could come crashing down. 

Construction is tough and apart from saving money, there is no real retirement for us. Coming into 2019 I had just closed three town houses and a had a SFH that I closed late 2019 but hadn't touched it yet. I was still running our construction company but we really ramped up on our investments this year and I'd like to go over our portfolio of investments from 2019.

For privacy reasons I have left out the property addresses but if you're really interested I can share the locations with you guys. We buy with simple fix & flip loans, I've used Limaone a little bit and Templeview Cap. I like Limaone because they're quick and relatively organized but my credit score is under 700 so they're not offering me 75% LTV and their interest rate is 6-7% compared to some local banks who are lending at 5.1%. We do like to work with private lenders as well because it's a much quicker close and a more seamless process.

We complete 90% of the work in-house which I think is a huge key to our success. We have better quality control, better scheduling, and overall a much lower cost. The slowest part of our entire process is the refi, especially the appraisals. Appraisals are taking forever to come back and it's delaying everything. We get bad appraisers too, had an appraiser compare 3 purpose built town homes with a big house that was converted into 3 crappy units; their reasoning was all town homes were on the same deed and we lost $80,000 in value and barely received anything back on the refi. 

THE NUMBERS

We spent $1,117,320.00 on property acquisitions this year, $1,022,460 on remodeling and after refinancing this has given us $1,831,175.00 in equity. After all expenses our annual net profit before taxes will be about $278,602.00 -- We will realize our actual maintenance costs & other costs but we've been pretty conservative with our calculations. We are still filling up our properties but overall this has been a great year for us. 

THE STRATEGY

We are running full force with the BRRRR method. We are able to buy certain deals that don't make sense to other people since we're able to complete the work at a much lower cost.

THE FINANCING

We are using a mix of Hard Money & Private money. I much prefer the private money and I give our lenders a great deal. I have private lenders that fund us 100% LTC, typically three construction draws, they take 1st position mortgage and receive accrued interest at 12-15%. Interest & points are paid at the refinance. We're really close with our lenders now so we tend to give them all of the money we would receive back at the refinance. Our goal is to acquire good rentals quickly. Not to make money off of these refinances. 

I also have a good sized HELOC that I haven't had to use yet. Our lending buddies are happy with the quick turnarounds so far.

THE HOUSES

We've purchased mostly single family homes but we have a few duplexes as well and two apartment buildings. The big building we are still working on and it will take a few months to fill completely. For the larger purchases we try to raise capital to close loans but we've only done one loan over $300,000. 

I only like to buy houses with good architecture, weird houses or properties with a bunch of additions, or general poor design & placement I won't buy. I like stuff at the mid-range market. These markets are much more stable than the higher end rents, they fit my BRRRR model a lot better and it keeps my mortgage lower after the refinance. Not opposed to having debt but I don't want a loan over $150,000 if I'm only cash flowing $500/month.

Since we're not flippers we can buy in areas where houses will appraise fine but I know they won't sell. There are areas around our investment location where houses will appraise for $130,000 but would sit on the market for months and months at that price and might end up selling for $90,000. For us, since we're refinancing and we want that $130,000 appraisal; these deals are killer. A mortgage for $85,000 on a $1,300 rent property is a good return. 

Unfortunately appraisers will always go by what's on the taxes. Just got destroyed on a refi. We have a building with 3 purpose built town homes that are on the taxes as a single mult-family building because they're all on the same deed. This little detail erased $80,000 from our appraisal. We are going through with the refinance and splitting the deeds and refinancing again when we're done. 

That would have helped a lot if we told them to non-renew tenant lease as part of the agreement. I can see them being sketched out doing that though in case we backed out of the deal and had them evict their whole building lol.