All Forum Posts by: Thierry Van Roy

Thanks for your reply!

A holding period of 6 years is kind of a minimum. Of course everything will depend on how much of the theory ever gets implemented, but my main concern is "nearly zero energy housing" becoming a market disruptor which will favor big developers over small investors, as is the case in my saturated market. And by "becoming", I mean during the next 30 years.

Hallo Maarten!

What Erik said. As I am active in Maastricht, I can tell you it is a difficult market. The city center is saturated, so you'll have a hard time finding anything there. Outside of the city center might work though, places like Scharn. Though Maastricht in general does not come cheap no matter where you look.

The Hague was hit hard with the crash, so you might have some success over there. Amsterdam I heard is either not an attractive investment or a crap shoot on which "war zone" will get cleaned up in the near future.

Thanks a bundle, @Jon Holdman !

I guess I better get a decent plumber seperate from an inspector/GC to make sure.

So I've been looking at this aborted construction project and there are a million things wrong with it. One thing my initial inspections came up with and really bugged me was an exposed pipe which had NO decline (it might even be defying gravity).

Yes, whoever did this turned it into a disaster and yes, the contractor is in bankrupcy. So no, I can't hold him liable anymore (can't pluck a chicken with no feathers).

What I don't know is how the other plumbing has been done. Some is under hardwood floors, some is sealed under concrete.

My inspector couldn't get underneath the concrete, so my question:

How can I check the entire plumbing and what would fixing this cost me?

Are there inspectors who use X-rays or something to make sure? Suppose I wouldn't have to go through concrete (the hard floors need to go, different story), Is there an easy fix or will this be a total redo?

What am I getting myself into here?

Would love to hear anyone's thoughts, because this decline thing is new to me, especially in this large a project (18 large units, 5 floors).

So there's this thing that's been bugging me for some time.

I'm in two European markets. Legally, one is 'saturated' in that all rehabs need to cover a myriad of environmental concerns. For example: touch a roof that has asbestos isolation and you HAVE to take it out, whether you need to or not. Also, the fire department won't give you a permit before you vow to make it napalm-proof.

The other is very lax (different country). The fire department doesn't care. Environmental requirements are only compulsory with new construction. And so on.

The two differ like day and night, is what I'm saying.

Now, if the latter were to implement the requirements of the former, about half the inventory would be deemed unliveable. Because of EU and such, these requirements are set for 2020, which will be impossible. The current sellers aren't willing to take a decent haircut in anticipation of these requirements.

So I don't know how environmental requirements are enforced in the US, but I expect any market not prepped to be shellshocked if the law gets laid down.

This greatly affects any buy & hold strategy in the long run. I would have to reserve about 20% of revenues to cover any future requirements on some of the deals I've seen.

New construction ('green housing') is becoming more attractive because of this, but that usually isn't where private real estate investors like us are active.

So am I overthinking this? Do I underestimate government hypocrisy? Or is a storm coming?

I am going to go with @Cal C. as well, actually. If the location or building type offers a premium in a booming market, then this could be worth it. I have seen deals like these in metropolitan centers with A+ luxury potential. But it doesn't seem that way with this building.

One more thing, @Glenn France - Welcome to BP! Though I have a keyword alert set up for France, so I do hope you're not going to get quoted too often!

Congrats, @Chris Winterhalter !

May I know how old the building is and what category?

I am always surprised when I hear about 30K/unit buildings in the USA. The deal I am working on right now would be about 100K/unit ARV, even if they're new (well, aborted) construction class A+, the difference still gets to me every time.

I have worked on two boutique hotels this past year. It was very interesting to be introduced to the hospitality business. As @Chris Winterhalter says though, the industry is cut-throat right now.

Europe is interesting indeed, but only in the boutique hotel industry if you ask me. A lot of unique property out there that can easily be converted, like old manors in large cities. Some cities are protecting every last piece of them, meaning you will never be able to build a new high rise in the dead center of a city like Maastricht, Amsterdam or Brussels.

Outside of those, huge office buildings have been converted by big firms these past few years. They were able to get them at 100 EUR/sqft even, I heard.

Did you mean what @Jean Bolger said or simply how not to overpay before closing?

GC's, roofers, architects etc. tend to give a quote for free, especially if there's a lucrative contract involved. Also, fire departments. I loved what @J_Scott suggested in his second podcast: get one to learn from and then give the next one the impression you know what you're talking about. Compare quotes.

As for actual inspectors, get the thing under contract first and then start the real due diligence.

Is there an elevator? If yes, it might not be replaceable because of shaft size or support. Maintenance can rack up if the elevator needs constant patchwork.