Blog Posts for May 2015

Setting Your Goals in this Crazy Real Estate Business

So this Blog came to me when I saw numerous posts on Facebook and other group sites that are all about struggles, set-backs and giving up and all I think is that these so called investors are looking for attention or just a pick me up-probably the latter.  They want some therapy, someone to talk to and vent to figure out how to get out of the RAT RACE.  Some type of motivation and to hear from others investors that have been in their shoes. As we have all been here no matter what anyone says. ROME WAS NOT BUILT IN A DAY.  Making money and building any business takes time and in this crazy Real Estate Business there is a ton of competition out there. 

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I figured it would be great to do a short Blog about SETTING YOUR GOALS. I am not that mushy type of guy for those of you that know me and to be honest I think some of you find me a little offensive and controversial. It could be my NYC attitude from my previous stressful career I had before getting into real estate, but I am ok with that!!!

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When I quit my job almost 3 years ago and joined Fortune Builders I set a lot of goals. Many of them are not achieved yet - but I will not give up until they are. I have setbacks every day in this competitive NYC market but you have to move on and keep your head up and push forward. Every now and then you might have to take a couple of steps backwards before you move forward again. That is ok…So with that said I set some of my own personal business goals a few years ago, not personal - that is a whole nother blog, maybe a Book!

1. Buy Rental properties so I can have cash flow - I currently own SIX Multi-Family homes

2. Purchase a Brownstone in Brooklyn that I can rehab and live in (has not happened yet)

3. Have my own realty Show on TV (almost, but not there yet!)

4. Buy skyscrapers, a casino(love to gamble), Develop high end resi in the NY Market, etc (not close)…The list goes on and on.

5. Buy a Vacation-Weekend home $$$$$$$DING DING DING$$$$$$$$$ BOOOOOOMMMMMM.

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As of today I am in contract on a home in New Paltz, NY(pics below-5 acres)….An awesome area in Upstate NY close to the Catskills, Woodstock, Kingston, Stone Ridge, etc.  A place I can clear my mind, hang out with friends and family and a place I can figure out how to accomplish my past and future GOALS! I am not telling you these things to brag. I am telling you these things to show you that it can happen and will happen if you keep your head up and just keep pushing no matter what gets in your way…I am not a big believer personally in all these educational programs, accountability groups, etc…but I can tell you this….If I didn't’t join the Fortune Builder Family I would never be where I am at today in Real Estate. So with that said- thanks to Than Merrill, Paul Esajian, JD Esajian, Konrad Sopielnikow, Molly Shaw-Matthers, Jonathan Steingraber (his 3 day speech sucked me in) and the whole team who keeps this company moving along on the Up and Up. Keep up the amazing work you do for us and all future family members. Now it's time to get a second job to furnish this place as it's going to cost a Fortune(play on words - get it?). See picture link above and will have a big party for all our local investors over the summer!  

In conclusion, the GOALS you set can and will happen when and if you put your mind to it and don't let anything get in your way.  Family and Friends that tells you NO, a Job which most people work, Financial issues, etc are only things that are bumps in the road.  You will get to achieve them sooner or later - just stay laser focused.  I know I will.  The End!

Driving your Comps & Never Trust a Real Estate Agent........

So this blog came to me when we almost made a BIG Mistake by purchasing a 350K home in Massapequa, Long Island. When I make offers on properties I generally do not need to see them until we have a contract in our Attorney's hand.  We use the MLS, Google-Bing Maps, etc to analyze the COMPS, etc.  If we went to see every property we put offers in on and we are not in the same ballpark as the seller we would never get anything done and would waste valuable time.  And as they say TIME IS MONEY!  This was a standard property that we would turn from a Ranch style home into a Colonial.  Gut it, Rip off the roof, Raise the ceiling and add a whole nother level on top of the house doubling the square footage.  Happens in every suburb throughout the Country.  Easy Right-Sometimes!

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So we have the contracts at 350K on this house, Based on past experience - Rehab costs around 170K+ and ARV of about 739K+.  Not the best deal in town and not the worst deal, but a DEAL.  We went to the house after we had the contracts in hand and do our Due Diligence. Walk around the house, take pictures, talk about what we should do and how to reconfigure the house, etc.  Image ► 

Now off to drive the comps........This is where this whole BLOG came to thought and I tell you this because I want to educate new investors not to make a mistake like this. NOTE: Always pull comps that are within max a mile, same school district, same style of home or what the style of the home will be after Rehab, Bed and Bath count, square footage and lot size.  You can look at many other things but these are the basics.

We arrived at our first comp, second comp, third comp and 4th comp....Nice houses, Really nice house.  I looked at my partner, looked down at the listing, looked at my partner, looked down at the listing, looked at my partner, looked down at the listing-----Shook my head, Took my hands and rubbed my eyes, and then looked at my partner again.  I know my partner well enough that if he comes to look at a house DO NOT WASTE HIS TIME!!!  I call him THE JACKHAMMER.  That will be a good story for another Blog.  None of these comps look nothing like what the Listing Agent put up on the MLS.  Not only did they not look like the pictures-The beds, baths and square footage was definitely incorrect. S^%^%&H^$@*I^$^T....I say.  2 of the listing were the same broker so I called her and had a nice short conversation with her, well not so nice.  

OHHHHHHHH she says.  We just put pictures up of the model homes this builder uses...The buyers has options to pick a style, etc.  But Ms. Brilliant real estate agent - These properties have sold a while ago and all your info is incorrect.  We rely on all the agents and brokers for accurate information and she is not a good example.  You generally will get these older agents in these fancy towns that have been an agent for 30+ years and are computer illiterate-which obviously was the case with this one. 

Below are the COMPS-NOTTTTT

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So since these properties above had more square footage, did not look anything like the house we went to see from the listing, etc....I had to call the broker and re-negotiate which didn't go well at all-Well it did not go anywhere as I needed it to be at a purchase price of 300K instead of 350k. I got an earful from him. Why didn't you guys blah, blah, blah and blah and then he hung up.  Oh well - I know I should have gone to see the subject property first but it is the name of the game.  We don't rehab a couple properties a year-We do volume and VOLUME SPEAKS LOUDER THAN WORDS!  It's not the first time this will happen nor will it be the last.  But what I have learned is when doing larger rehabs I recommend to not only drive the comps, but call the listing agent before you do - so time is not wasted and hopefully you get accurate info. THE END.......