All Forum Posts by: Timothy Smith

@Michael Uvaydov STR ordinance was just updated here in Buffalo, and yes, it is much stricter than previous. The biggest changes are that it is based on zoning and no longer just an application, higher application/registration fees, and tighter rules if you do not owner-occupy (limited to a 2-family).

Lots of reasons fueled this, most of which are not backed by hard data. NIMBYism, the belief that STR effected affordable housing, and STRs driving up prices being the main ones. I will admit there are many problems with slumlord STR owners, just like LTR, and people trying to circumvent the regulations. This ended up punishing those trying to operate above board and follow the rules. I see many furnished MTR/LTR units hitting the rents market — or even for sale — as STR operators have been shut down.

My experience is that demand is cooling off and operational costs eat deeply into the profit margin. Canadians are not visiting is a notable concern. If you are going to move forward, pick an area where you can easily pivot to MTR during low-demand months or even underwrite as LTR.

@David Weitzel yes, yes, and yes! All extremely well-articulated points that are very much in-line with what I tell all those forum salivators that think the cheap prices make it "investor friendly". We both know all-to-well that the story is much different. Your post is worth a COPY/PASTE, for sure!

(we gotta grab coffee some day. We live within two blocks of each other, after all!)

Hi @Brandon Le and welcome to the Buffalo corner of BP. You are asking a lot of the right questions, and I have some very unglamorous answers for you. Take them or leave them, but since I have perspectives from the vantage point of client, investor, and agent, this is what I can say:

Find yourself a mentor within Hunt that you can shadow. Who is doing what you want to do? How can you add value to them, so that you can learn?? 

Expand your network. Attend BP meetups. Be active on chats and forums by asking humble questions and not trying to promote yourself as something you are not (we have enough of that).

Get yourself into a lot of houses -- especially value-add properties. Get familiar with the old construction we have in Buffalo. Most out-of-area investors get in trouble because these houses are so old and they don't understand what it takes to renovate/maintain them. Even a lot of local folks step in it

Learn the basics of all trades (might be tough if you're not doing a project yourself or have the time to shadow them)

Tag along with another agent who is walking a client through a property. Listen to how the client (hopefully a seasoned investor) analyzes the property and the language they use. What is new to you? If you don't want to sound like a newbie by asking, take note and go research when you get back to your desk. 

I spent nearly a decade as an investor before becoming an agent myself (Gurney Becker & Bourne), starting by renovating with my own hands. I learned how to tile, sweat copper, hang drywall, mount cabinets, etc etc. I suck at it. Because I don't do it every day. But....I learned how it should be done correctly and how much it should cost. I then moved on to building a large contractor network, and ultimately, found a GC partner who (to quote Jerry Maguire: "completes me". If you really want to be able to give solid guidance to your clients, get dirty yourself and learn by experience. It doesn't work for everyone -- and since you mentioned being a student, this could be a challenge -- but that's up to you to figure out. Partner on a deal with someone and put in the sweat equity. Your payment will be experience and education.

As an investor client, my biggest frustration with agents is that a very small percentage of them actually understand investor metrics, and even less know what is takes to renovate a property. The ones that bring the most value (to my purpose, at least) often have portfolios themselves and are doing what I am doing, but perhaps a slightly different approach or strategy. I resisted getting an RE license for years, but finally got to a point where it made more sense for me to have a license. What I didn't originally expect was how much I LOVE helping clients navigate this path. Probably the former teacher in me coming out in a new format, but enough about me.

Hopefully this wasn't too much and I don't sound too incoherent! Feel free to shoot me a note if you want to talk offline.

Hi Vinod and welcome. I live and invest in the Buffalo area, doing a lot of value-add small multifamily over the last decade, partnerships, a sprinkling of flips, and short-term rentals. I recently became licensed as a New York State salesperson, as it was just the next logical step and now allows me to help all the folks who were coming to me for advice on their own journeys. Would love to connect with you if you are interested. I’m always down for coffee and a chat.

Tim

Hi @Shaun Ortiz and welcome to the Buffalo corner of the BP community. I've taken note of some of your recent posts, and they are all very general questions about investing in Buffalo. It appears to me that you are casting a very wide net, and it may be more beneficial to "drill down" on your questions and relate them directly to your strategy. I have found that the broader the questions are, the less responsive people tend to be, and if they do respond, they are rather broad responses. 

IMHO, your best approach would be to share your goals and investment strategy, then find folks who align with that and can guide you. I'm assuming you don't live in the Buffalo area since your posting headline says "remote" alongside it, but I don't know that for sure. For all we know, you could be looking to invest $5M cash in an apartment complex, or perhaps you are needing to leverage OPM into a small fix'n'flip opportunity. Without more context, it is really hard to give constructive feedback. 

That all being said, there are several of us local Buffalo folks who could certainly point you in the right direction. Some are investors, some are agents, some are PM's, and some are a combination of those things. As for myself, I am a seasoned investor specializing in small multifamily value-add with the (occasional flip mixed in) that came to be an agent out of necessity for my business and the expanded opportunity to help others. Some folks on here stick to turnkey, others are flippers, and so on. 

Hopefully this is helpful feedback, and you appreciate the response. There is a lot of opportunity in Buffalo, but also a tremendous risk if you are not properly informed. 

Hi @Mike Teeple, welcome to the Buffalo BP community! I'd be happy to connect with you and will send you my details in a DM. I am a licensed salesperson with the brokerage Gurney Becker & Bourne, and also self-manage my own portfolio comprised primarily of small multi-family renovation projects. We've done everything from rebuilding a house from the dirt up, to simple paint/flooring updates. I've got a Canadian partner on one current venture so that aspect is not lost on me! Hope we can connect. 

Hi @John. Are you looking for turnkey or a value-add project? Cash flow can be manipulated many ways, including by buying in cash or with higher down payments. However, it’s generally a tough market for turnkey cash flow right now with traditional 20% down investment lending.

I’d be happy to connect with you if you’d like to discuss further.

@Jim Bice this actually sounds pretty reasonable to me given the situation you described. I've got a three story 4-unit in Buffalo with two steam boiler systems. Gas bills spike at $300 or so each during the coldest months. Do yourself a favor and find an expert on your particular system -- that might not necessarily mean one of the big name companies. The old school guys who work on historical properties are a good place to start. We had a couple companies come in and give wild quotes to rework our system, then found a guy who showed up with schematics and trade journal articles on our particular system, spent 2 hours educating us on it, then cost about $500 to go around and fix all the crappy work previous "contractors" did to the system to try "fixing" it. 

Before you raise rents, give it a full calendar year then re-evaluate. Put your thermostats in lock boxes so people can't jack it way up.

Yes, you can still achieve this in the Buffalo market. However...not turnkey, and you've got to know the sub-neighborhoods (or micro markets) as things change very quickly block by block. Expect significant renovation, so having a reliable renovation crew is worth its weight in gold. Being NYS, you've got to know Landlord/Tenant law or leverage someone who does. Property Management takes a nice cut out of your margin, unless you have the systems built to do it in-house. 

That's a lot more to chew on than most non-locals want to deal with, but for those of us here, there are good opportunities to be had.

Once again, @Matthew Irish-Jones beat me to the punch! I was going to caution the same wisdom. This is a tough town to buy in if you don't have reliable boots-on-ground. Neighborhoods change extremely quickly, construction is old and requires people who know what they are doing. Proceed with caution.