All Forum Posts by: Steve Mandelbaum

I have an opportunity to buy a 6/2 with office space in the house.  It is almost 3k sq feet and was previously a nursing home.  The house is in Jacksonville, fl. 

The numbers are not great as a single-family home.  

150k ask needs reno and ARV 215k

The rent is 1400 as a single-family.   

There would be no way to flip it.  The space feels institutional.  

I am not interested in getting into the healthcare business, I would want to find a non-profit or city department that wanted it.

The other option is to make it a boarding house, except I would need to find someone to run the show.  The rent would be in the 400 a month range and I am not interested in dealing with that. 

Open to ideas?

Interesting idea.  I think where you are going to get caught up is in the seasoning anywhere from 90-180 days depending on the bank.  Fannie Mae is generally not interested in allowing investors to leverage them to make money.  Their mandate is owner-occupied.   

That's good to know.  Do THe tents actually send a pic? 

I only have a few that would actually do it.

Looks like lowes has a program as well.

I remind my tenants regularly to change the A/C filters and they simply do not.  When the A/C fails they call up with an attitude and want it fixed immediately.  

In my lease, I have a clause that outlines if the machine breaks due to their neglect, they will have to pay for it.

Has anyone signed up for an Amazon delivery every other month?  I would have to pay for it and manage it, again I wonder if it is worth my time.  

It is an ongoing battle.  The problem is tenants don't see it as their own property and it isn't. No one cares for your stuff the way you do.  Which results in all the problems you listed above.

The decision is if it is worth the time and effort to check each property on a regular schedule and enforce the rules or is my time and money better spent on other activities?   I have 12 properties, if I visit 4 a month that is once a quarter.  To visit 4 a month is probably half to full day's time per month.  Scheduling, time in unit, travel, follow up, etc.

Sadly, I have taken to a reactionary approach and try to recover some of the damage from the deposit.  The A/C filter is the biggest issue.  I remind them constantly to change the filter.  

Giving them a gift would be effective in the beginning, then it would lose its effectiveness.  

A lot of good points. 

Bitcoin is the ULTIMATE Fiat currency.  It is nothing more than an electronic agreement.  Gold is easily recognized and valued, it is a hard currency. The fed does not want people to walk around with gold coins buying snicker bars.  They can not control or regulate it.  Gold as a currency was shut down, not paper backed by gold, but actual gold as a currency.  Bitcoin will suffer a similar fate.  

If anyone is telling you it can not be hacked or manipulated, they are lying or misguided.  Can you tell me with 100% certainty there is no nefarious code in the purse?  Think Huawei routers bought by the DOD.  The payoff for robbing bitcoin is immense and as a result, someone will attack it.  Russian malware, that broadcast passwords, via an IP address in the "Stans". 

People are definitely making money with it.  It will be eventually be shut down or marginalized by governments.  The idea that you can travel with $1m on a thumb drive is not something most people would ever need.  More likely it would be used by drug dealers, terrorists, etc.  

There is a difference between investing and speculation.  It involves the level of risk, likely hood of either event.  Could bitcoin go to zero, yes?  Could bitcoin go to 50,000?  The problem is that it has no intrinsic use or value.  A store of value?  The part some people are excited about is that it has continued to go up.  If a bitcoin was $4,000 like it was in December of 2019, would anyone be talking about it?

  Gold is a store of value.  It has been valued since the Romans and keeps pace with inflation and sentiment.  We need an electronic currency, not whatever Bitcoin is?      

It depends on your definition of affordable housing.

I am in the process of building some sfh that will sell in the 165-180k range and ultimately be build to rent.  

One of the biggest unforeseen costs and challenges is how difficult the municipality is to work with.

There are certain realities, you can not get past.  Plumbing a 2 bathroom is the same cost in any house.  The electricity is partially going to be based on the square foot size plus the base charges, panel, and service.

I believe there is a play for this type of housing.  It is both simple and really difficult.  The goal is to control costs where you can.  The land has to be lower cost.  If there was a house there previously then you may be able to use the old sewer connection ane you know that power is available to that location.

Finishings is the other area that can make a big difference.  Carpet is cheaper than most any other floor.  Builder grade is going to be the only way to finish the house.  Clearance is a good strategy but it is not scalable.

My attempt at a Click Bait title.

Ok, it's time to make a prediction for next year.  What will the world be like in a year from today? 12/13/2021.  It's time to put it down in writing.  

All topics are open... 

Best Case / Worst Case:

Corona Virus?

Real Estate Values?

Rent?

Economy?

GDP?

Interest Rates? 

Stock Market?

Social Unrest? 

My Predictions:

Overall, the economy will stumble a little as the training wheels come off and the country gets back to work.  Which leads to a strong economy in 2022.

Corona - Will be nothing more than an annoyance for the US.  Multiple vaccines will be online.  

Real Estate Values?  Stable with an increased deal volume.  Inventory will come from foreclosures, excess housing as a result of Greatest Generation changes in living arrangements.

Rent?  Will continue to increase even with rising in eviction post moratorium. 

Economy?  Stumble then end the year on an uptick 

GDP? 3.0. It will be based on the economy getting back to work.

Interest Rates?  Fed will not change anything for fear of worsening the economy

Stock Market?  Close the year at 23,000.  We are in for a wild ride.  The fed will stop buying and companies will need to start competing again on earnings and innovation.

I have 3-4 properties I need to refi into long term loans.

I have 2 Hard money balloon loans due in January from one of the big 3 national lenders. 

I have owned one for 3 months 

I have owned another for 6 months

Each lender seems to have a wrinkle on their programs that make them less appealing.

i.e One lender will not write a loan for a less than 6-month ownership.

Another wants 3300 (times 4 or 13,200 in their fees) per house for their fees.  They have minimums and the houses range in value from 80k-150k.  

Looking for suggestions and advice.