Any one have or seen any contact information for Susan Boyle or Benton Brown? Interested buyer.

If so, email me? (keithan@kgdevllc.com)

thanks,

Keithan

Posted by: keithan at January 9, 2009 12:04 PM in response to Brooklyn Modern #4: Green, Industrial Wonderland

By the way, last post wasn't meant to discourage. I think that the moral of story is: do your homework. I've found it quite tough to find deals that I thought proved to be economically sensible. Also, the market's in flux - I'd be eyeing historic prices quite closely in this environment... I mean pre- massive years long run-up...

Posted by: keithan at January 5, 2009 10:02 PM in response to Investing in Multifamily Props

I have heard the following:

Financing
Over 4 units - commercial. This from more than one lender, and I take it as a standard. The impact in financing is that you have to have more down - on the order of 20 to 25%. This was in more favorable lending environment - last year. (Grimace).

Maintenance / Technical
I have spoken to many an owner. In a 100 year old brownstones - things break. Constantly. So be prepared for repairs (time, money, etc.) Another thing about this... brokers and sellers I've found grossly understate the maintenance issue and the fact that you will always be working on the place. Always.

Economics
This - in my opinion - is perhaps the toughest to get right. I think that the "boom" of the last few years (decades perhaps) seems to have made it look easy. But I get the feeling that prices are kinda high now (read probably over-valued). That said, the good stuff is the good stuff. Prices of those properties seem to me to be resistant to decline (stands to reason I think). But every seller thinks that they have the good stuff. Every seller wants to use the most aggressive comp on the block to price their property. This to me contributes to a generally over-valued market condition.

I've looked at the economics of renovating old properties. Generally, this seemed tough - having to put hundreds of thousands into a property after spending $900k to $1.4M in decent - non-prime neighborhoods. I wouldn't say it was undoable (to do with favorable economic outcome). In fact, cutting and condo-ing seemed at times to show some "room". But still - I echo the statement a previous writer made about risk. I feel it's quite high - in particular to renovate in a manner that's cost effective... But perhaps market flux will improve this situation. Then again, that also affects your opportunity to sell or rent at the number you want in the short term...

Posted by: keithan at January 5, 2009 9:57 PM in response to Investing in Multifamily Props

Stackx-

In a sense, I echo Gennaro's comments. I'm a fanatic about residential real estate, construction, design. From a construction company, I'd want directness, honest consultation, competency, and execution with attention to detail and a commitment to quality. These things - I feel - are easy to mention. But I think that dealing according to these attributes requires commitment. And they're attributes of the people I've most liked dealing with in the past.

I'd like to have the confidence that the construction company is effective at selecting and managing good subs.

I also suspect that there's an effective way to be candid about cost and margin, remain competitive, and promote client loyalty.

Managing with smart attention to the schedule. Things happen that adversely impact, I know. But again, I'd like to have the confidence that the GC / CM / PM are proactively smart about managing to schedule.

I'd want to know that (one) could execute finish details effectively and carefully. (I favor boutique residential - in which attention to layout and finish detail tends to be critical.)

I think that Owner's Rep services would generally be valued also.

Funding and co-development could be interesting - in combination with the foregoing attributes of course. (Smile.)

Posted by: keithan at January 4, 2009 12:43 PM in response to What Would You Want In a Construction Company?

Thanks. Happy to update the forum on progress.

For those who may be interested, I've an existing relationship (for years now) with an exceptional construction management firm - mitigating GC (general contractor) and subcontractor risk significantly. I've also working relationships with accomplished architects here in NYC.

I should also mention that ground up construction is often more cost effective than renovation / conversion / gut rehab. Redoing Mechanical-Electrical-Plumbing (MEP) in an old building is wretchedly expensive - to say nothing of other structural or cosmetic upgrades. It's often easier and cheaper to simply plan and do it right the first time.

Anyhow, thoughts are welcome. Interested parties are even more welcome! (Smile.)

Kind Regards,

Keithan
keithan@kgdevllc.com

Posted by: keithan at January 3, 2009 12:33 AM in response to Brooklyn Communal (Owner-Occupant Built) Apartment Project

Iron-

I appreciate your comments. Here are reasons to build:

1. Building to one's own spec is its own reward (prime motivation).

2. No developer margin to pay.

3. GC charges / construction costs provide favorable negotiating opportunities as well. Consider the following economic fundamentals:

-building permits citywide (worldwide, even) have plummeted.

-further, nearly every commodity on the planet is cheaper this year than last (including steel - and when steel declines, concrete declines.)

-labor and land cheaper as well.

4. finally, yes, Phase II should be high margin - if you consider land to have been "paid for" by Phase I. (Bonus)

Anyhow, I can be found at keithan@kgdevllc.com if interested.

Keithan

Posted by: keithan at January 2, 2009 3:49 PM in response to Brooklyn Communal (Owner-Occupant Built) Apartment Project

Pardon ultra late replies...

cmu, thanks. the unit is a new unit with an electric hot water heater... not sure how feasible a conversion is / could be. but there is gas in the apt... (furnace, cooking).

Dappledo, hi... no, this wasn't on Maple Street. Why? ;)

Posted by: keithan at December 31, 2008 6:45 PM in response to Electric Hotwater Cost Estimate

While I'm not personally interested, I like the fact that you're trying to find investor/partners on this website. It would be cool if more folks pitched real estate proposal on this site like you are.

I still think you'd be much better off financially buying a vacant rundown building that needs a total rehab than building from scratch. You could always build an extension which of course adds value.

Unless you're an experienced builder or very rich, I wouldn't do it and I've been a landlord/building manager in NYC for years.

You can be plenty creative renovating an old building and spend half what you'll spend building new. Unless you get incredibly lucky, you'll get ripped off beyond your wildest imagination.

But good luck to you. Please keep us posted on your progress.

Posted by: IronBalls at January 2, 2009 7:04 PM in response to Brooklyn Communal (Owner-Occupant Built) Apartment Project

Thanks. Happy to update the forum on progress.

For those who may be interested, I've an existing relationship (for years now) with an exceptional construction management firm - mitigating GC (general contractor) and subcontractor risk significantly. I've also working relationships with accomplished architects here in NYC.

I should also mention that ground up construction is often more cost effective than renovation / conversion / gut rehab. Redoing Mechanical-Electrical-Plumbing (MEP) in an old building is wretchedly expensive - to say nothing of other structural or cosmetic upgrades. It's often easier and cheaper to simply plan and do it right the first time.

Anyhow, thoughts are welcome. Interested parties are even more welcome! (Smile.)

Kind Regards,

Keithan
keithan@kgdevllc.com

Posted by: keithan at January 3, 2009 12:33 AM in response to Brooklyn Communal (Owner-Occupant Built) Apartment Project

As a client, here is something I would want that I didn't know enough to insist on at the time. I want to know that if I agree to a work and payment schedule with reasonable progress payments, the contractor has enough in reserve to obtain the necessary materials (mill product) to do the job according to schedule, and to be able to live within a reasonable payment schedule.

Posted by: slopefarm at January 5, 2009 11:57 AM in response to What Would You Want In a Construction Company?

God bless you in this economy. You are brave.

Posted by: superstooper at January 5, 2009 9:47 PM in response to What Would You Want In a Construction Company?

By the way, last post wasn't meant to discourage. I think that the moral of story is: do your homework. I've found it quite tough to find deals that I thought proved to be economically sensible. Also, the market's in flux - I'd be eyeing historic prices quite closely in this environment... I mean pre- massive years long run-up...

Posted by: keithan at January 5, 2009 10:02 PM in response to Investing in Multifamily Props

my advice is to pay your subcontractors well, and stand up for them on change orders...otherwise you will get third rate service with no guarantee backing up your work..in other words put service before profit.. also you might try to do what i have recently decided to do and put 10% of your time in putting your services to charity ..it is the best way of using your skills to improve your community

Posted by: eman1234 at January 5, 2009 10:06 PM in response to What Would You Want In a Construction Company?

We bought a 3-family brownstone (owner's duplex + 2 one-brs) about 5 yrs ago and it has been great. We're first time homeowners and were really hesitant about the responsibilities-- in terms of maintenance, economics, plus who-knows-what that goes with having tenants as neighbors. But it's been fantastic for us.

We have had some rocky patches, especially at the beginning, when we had a couple of big maintenance problems and a tenant who didn't leave when he said he was going to. Those were really stressful times, but since then, we have little to complain about. Owning the rental apartments has enabled us to live in a much nicer apartment than we could afford otherwise, and our tenants have been great neighbors & even friends.

For what it's worth, I think that the competitiveness of NYC's rental market for the past few years has helped us a lot. Whenever we have an apartment available, we advertise on craigslist & get dozens of applications for it, and many of those people have good credit and all of that, so we just pick the people with whom we have the most comfortable rapport. I worried at first that that was unfair because it's so subjective, but now I think it's smart-- because, after all, you have to trust your tenants and they have to trust you, too.

Posted by: Isty at January 6, 2009 5:50 AM in response to Investing in Multifamily Props

paspar2 - whats your email address?

Posted by: landlord at January 6, 2009 9:30 AM in response to Investing in Multifamily Props

We have a 5 family and I must tell you it was an absolute bitchto get financing as Lenders evaluate solely on rental income (even if you plan on making it your residence). In addition, there is a significant and painful difference between commercial and residetial loan rates and tax rates. We used Benjamin Levin as our motgage broker and he really helped us navigate.

Posted by: HomeSweetstuy at January 6, 2009 9:37 AM in response to Investing in Multifamily Props

Im approaching this as a pure long term investment. I will not live in the property - which is an important distinction....

Im trying to read up on this and figure out how to value a property right. There are a lot of conflicting guidelines online so I figured its best to talk to actual landlords.

Those of you who went though the exercise (especially in the last 5or so years): what were your valuation guidelines (multiple of RR, certain CAP etc)? did you expect to have a monthly return early on or were you willing to be flat monthly with the expectation of the property appreciating and growth of your equity?

here is an example property I looked at:

pros: it was in an area Im very familiar with. rents were under market slightly. the building was recently renovated with new kitchens/baths/furnace/roof. Tenants were there a while..

cons NOI was 1% above the debt service (25% down and 6% 30yr fixed) with a decent maintenance cushion. price is 12.5 times RR. The cash return on this one was basically nil and the return would be increased equity and appreciation.

feel free to email me at paspar22 at gmail

also, Im looking for online forums where discussions such as this are welcome but have yet to find any. Suggestions?

thanks

Posted by: paspar2 at January 6, 2009 10:41 AM in response to Investing in Multifamily Props