Catskills - Sullivan County - Ulster County Real Estate -- Catskill Farms Journal

Old School Real estate blog in the Catskills. Journeys, trial, tribulations, observations and projects of Catskill Farms Founder Chuck Petersheim. Since 2002, Catskill Farms has designed, built, and sold over 250 homes in the Hills, investing over $100m and introducing thousands to the areas we serve. Farms, Barns, Moderns, Cottages and Minis - a design portfolio which has something for everyone.

Wednesday, September 7, 2022

Rain, The Crest, and Barn 46 Sells

It finally rained.  It hadn’t rained for more than 30 minutes since maybe May.  It’s now been raining since Friday.  A steady rain, just exactly the penetrating, consistent rainfall one hopes for when it has been dry for so long but rarely gets.  Typically it comes too hard too fast for the ground to absorb (I would say 'that's what she said' but my Maturity (with a hard first T) has left such thoughts far in the past).  But not this one - still raining and it’s Wednesday morning.  I literally can see my parched yard turning green and the thirsty bushes growing.  My yard was one large brown sheet of dead blades of grass, turning what is usually vibrantly colored yard into a brownish monotony.

It’s the pace that is sort of amazing.  A slow steady rain that picks up its pace on occasion but never comes with enough velocity to roll right off the ground into the sewer grates.  It’s welcome for sure, and even though it complicates our lives as builders, it is welcome.

The weather system also brought with it cooler temperatures, our first taste of fall.  Ferns go first, then the leave color and start to drop.  Just last week I was noticing colored leaves dropping, and deduced it was the drought not the forthcoming autumn that pulled them from their branches. It would be a wonderful world indeed if the backdrop of climate disaster for future generations, if not ours, wasn’t leaving hard to ignore tells all over the place.  The heat in Cali, god the floods in Pakistan where 1/3 of that poor country is under water.  I’m not sure which hell I would pick - being wet and flooded, or hot and endangered, because they are both unmanageable in a very short amount of time.

Our third home sells today at the Crest - since we purchased that project last year (or was it 2 years ago - Covid confused time) - we’ve had hard to argue success repositioning this project, where the previous owners lost their momentum years ago.  We’ve sold 7 pieces of land, put 10 under contract, and invested about $5,000,000 so far.  An incredible array of diverse families moving in, and a telltale of pandemic affects (or is it ‘effects’ (too early to care)), half are planning to be there full-time.  Should be a great place to live.

This home, a Barn on 5 acres, built on a rock ledge, with a big pond included.  3 floors of living.  4 bedrooms with at least 1 on each floor.  Big views.  Just an extraordinary piece of real estate ass.

Barn 46

Saturday, August 27, 2022

Meandering thoughts on a Saturday Morning

Back by popular demand, a blog post. My friend and colleague Eric G from G5 Insurance reminded me that a new post was due, and I aim to please, so here it is. On a Saturday morning. Who knows where it will go since it is not preplanned. Last night, on the golf course, it was getting darker by 7:30, a sure indicator of the change of seasons, ready or not.

Probably best to get the house horseshit out of the way, so I'm not left tying it all together in the end. This beauty is actually for sale. Rare indeed. Up in the Crest, just north of Fremont NY. Big pieces of land, and big views, and a great assortment of homes. I ended up with that land when the original developer, after 14 years, gave up, and we took over (purchased) at a price that gave me lots of room to maneuver. The home below, just weeks from being finished, will cost around $700k. Has mountain views and a looks over a lake, and gets a lot of sun all day long.

Just returned from a 10 day trip in the '72 Malibu with the dog - Milford, Valley Forge, Spotsylvania, Nags Head, Surf City, Raleigh, Winchester and then back home to Milford. I had never been to the Carolina coast, and it was well worth the journey. From Corolla, across with the help 2 ferries from Hatteras and Ocracoke. I've never spent a ton of time in beach towns, and they all seem to share a lot of commonality, dive bars and fried food being 2 of them. Discovered my dog is not comfortable on the beach - everytime I left her off leash, she would run as fast as she could (and that is really fast) through the dunes and off to who knows where. Thought I lost her on the first flight, had written her off, but then found her on the beach 10 minutes later.

I had never been to the southern low country, and it certainly is pretty and certainly has a unique feel to it.

The big college debt relief was all in the news this week.  I have 2 thoughts - $10k is really much to move the needle on a lot of the debt loads, and 2, there was a lot of great articles delving into who owes what, split out by age, region, ethnicity - so that was interesting. The whole college expense and loan issue is a real shame - the idea that 18-22 year olds, who for many have never had any experience with debt and little experience with money - that they can borrow $100k, to be paid back in the future with no current obligations, and you can borrow more than the college costs and use it to live, and you can't get out of it with bankruptcy- that's not really on kids - that's a rigged game, preying on our children. It starts in HS with school administration bragging about what schools their students get into, with guidance counselors who recommend the 'best' schools, to society at large that puts a premium on the brand of the school, and the 'life changing' network of people you could meet.

There are all sorts of ways to fix this problem - loans could be tied to the profession and salary of the chosen major (no $300k loans for teachers), schools could be held accountable for better due diligence by allowing loans to be extinguished thru bankruptcy (this would certainly cause a decrease in the cost of schools), etc.... Giving out $10k but not fixing the problem and continuing to allow this predatory behavior towards our children is not the best path forward. Maybe a start though... I mean when I went to school, University of Pittsburgh cost less than $6k a semester. If I was burdened by gigantic student loans, my entire life would be different - my fixed costs of payback would have eliminated all of my choices - choices that have resulted in an effort that by now has injected $300m of economic stimulus into the regions where I work - all that would have been impossible since the monthly payback nut would have strangled any entrepreneurial (and money borrowing) ideas. My journey has been such a high-wire act that carrying the burden of a big loan would been the breeze that blew me off course. And I was an English major, an area of focus I give a lot of credit to for teaching me how to evaluate information, and condense it into effective messaging.

Interesting times out there in the real world - information about stock market, wars, energy crisises, inflation, housing market - is hard to decipher. Just glad I'm not fully leveraged, and that we cycled through a very profitable investment cycle - where we load up on land and houses and then sell them off before loading up again (typically accompanied by a fair amount of working debt from Jeff Bank) - this time, I seem to be really well positioned, with a ton of dry powder, a years worth of sales queued up, several homes being built and paid for as we build them (which alleviates a lot of cash flow stress), a lot of passive income, and a team that is without parallel. And even a home that is solar powered with a battery so I'm sort of almost off grid - Come what may, the perch from which I write seems to be a perch of safety, come what may.

Saturday, August 6, 2022

Recession bullSh#t, Small business fiddling and Interest rates

I’ve always borrowed a lot of money.  Real estate is a leverage game, and hence why nearly all real estate players go bust at least once, get caught overexposed when the market turns against them, and get caught in a position where they can’t pay the bank - and you always have to pay the bank.  Jeff Bank’s lawyer said it simply enough - ‘keep paying us back and we will keep lending you money.’   Don’t pay them back and then all those documents-signed pages of the loan agreement quickly become referenced and quoted.  “Oh, you didn’t know that absolutely everything you own is pledged here, sorry, should have read the fine print.’

You can get caught behind the 8 ball in lots of ways.  Market downturn, interest rate hike, change in consumer habits, regulatory delay, lawsuit over something.  And then you just bleed and bleed and bleed, the money costs to the back, the carrying costs of interest and insurance, and legal, etc… can very quickly accelerate your basis past the projections and make making money through the project difficult.

I happen presently to be in my least leveraged position ever, and when I look back at some the leverage ratios I had in the past I can only shake my head at the naivety that made me think I could ever burrow my way out of some of those debt loads - but that’s a story for another day.  Today’s story/anecdote is about the increase in interest rates making my personal decisions easier - since at 7% borrowing costs from the bank, I can take any excess cash the business is throwing off and loan it back to the business, saving (or making) 7%, which is a good rate of return.

When rates are at 3 or 4% it seems worthwhile to pay the bank and look for alternative investments - be it stocks, or real estate or whatever - to earn more.  Honestly, I stopped doing that for the most part, I’ve pivoted to paying as little interest on anything as much as possible, be it cars, personal real estate, company working debt - it just all ads up, and the payment is a sure thing, whereas trying to pay interest and invest the money you could have used to pay down debt to invest in search of higher returns is not a sure thing.  It just really adds up.

I like debt.  Manage debt well.  Believe growth is made possible and juiced with borrowed money.  But for me, right now, I’m just playing it safe.  If these rates would have doubled last year around September, I literally would have owed $15-20k a month more, and that’s serious money.

I’m sure there are lots of people with lots of borrowed money feeling the pinch.  Maybe my dry powder will come in handy over the next couple of years.  My guess is it will.

Like I said 2 weeks ago, all this recession talk is bullshit.  528,000 new jobs. It’s a media creation.  Yes, higher interest rates will slow down economic growth and will slow down housing - but that’s a good thing - the housing market was insane and not healthy.  I work with literally 40 small businesses a week, and watch another 40.  They are busy, they are hiring, and the pipeline of work stuffed with opportunity.  If an economy is growing at 6% and now it’s growing at a rate that would have been considered great just a few years ago, - say 4% - but the decrease from 6% to 4% is a decline of a certain percentage that marks a recession - that’s just playing with numbers, not a real thing.  Anyone out there in the ring can see how strong the economy is, especially regionally.

As I said above, I work, and have worked with small businesses for years.  I hire, fire, coach, mentor, teach, and collaborate with a wide range of them, so I’m involved and get to see close up how they do their book-keeping, scheduling, employee management, quality control, etc…. A million little details of how they interact with us, and since we spend about $1.5m a month in paying small businesses, my perch from which I observe is well positioned.

And what is true, without a doubt, is the best small businesses never stop fiddlin’ around with their operations - trying this, trying that, reaching success with one trial balloon, and then trying another.  There are so many operational details of a small business that you can noodle and fiddle endlessly - with insurance, truck fleets, employee incentives, banks, software, legal, accounting, scheduling etc…. And a small business can actually impact operations pretty quickly with well-implemented pivots, as opposed to larger ones where the ship is harder to turn.

So fiddle away my small business friends.  Beside the cojenes to actually be in the entreprenuerial ring in the first place, nothing more important than messing around under the hood.

White modern home in North Branch

Sort of like when Dylan went electric - I'm sure there will be plenty of haters hating the idea the house isn't black on black.

Friday, July 22, 2022

More about Africa (and some house stuff)

Houses -

I truly put so many deals together that I don't even keep count anymore - or more accurately, it's just all part of my daily routine that there is no high five moment. In just the past 45 days, I've put together about $5m of deals, very diversified with the narrow lane we work - 2 houses that we are building on other people's land (Saugerties and Stone Ridge), a house nearly finished (Fremont/North Branch), and house just starting (North Branch), and a house that is finished (Narrowsburg). The deals come together so seamlessly between my skills, my attorneys efforts on our behalf that I have to be careful not to overbook and leave Amanda once again on the hook for more homes than she can reasonably manage and design.

Prices and volume in the real estate market appears to remain strong for good homes. It is correcting some in terms of what people are willing to pay, but that's a good thing and we welcome the new price points where interest remains robust.

Amanda and Lulu checking out the new lake front.

Africa -

We've all mostly seen Out of Africa, but I read the book while traveling there, and if you go in looking for a mirror of the movie, you will be disappointed - the movie seems to have used the 'creative license' to the full extent in changing facts, timelines, events, etc...

If you read it on its own, as a meditation of life, Africa, life in Africa, loss, celebration, appreciation and gratitude, then it is worthy indeed.  The tone and pace and style reminds of Verilyn Klenkenberg, a columnist for the NYTimes for years and author of The Rural Life.

Highly recommend both. When the writing of a piece captures the pace of the story or environment, then that is valuable. For instance, Isak Dinesen, the Danish baroness who wrote Out of Africa, takes her time with her book, lets it meander and lose its path, a lot like the people of Africa at the time lived their lives - not in a future target ambition of some sort, but a live in the present ability lost to most westerners.

May be an image of book and text that says 'PENGUIN BOOKS OUT OF AFRICA KAREN BLIXEN (ISAK DINESEN)'

Charles Petersheim, Catskill Farms (Catskill Home Builder)
At Farmhouse 35
A Tour of 28 Dawson Lane
Rock & Roll
The Transaction
The Process
Under the Hood
Big Barn
Columbia County Home
Catskill Farms History
New Homes in the Olivebridge Area
Mid Century Ranch Series
Chuck waxes poetic...
Catskill Farms Barn Series
Catskill Farms Cottage Series
Catskill Farms Farmhouse Series
Interviews at the Farm ft. Gary
Interviews at the Farm ft. Amanda
Biceps & Building
Catskill Farms Greatest Hits
Construction Photos
Planned It
Black 'n White
Home Accents at Catskill Farms, Part 2
Home Accents at Catskill Farms, Part 1