October Upstate
This has been a fascinatingly complex week of leadership running the gamut of pro se representation of a legal complaint I made as a Board of DIrector at our Milford Property Owners Association, I had our annual membership meeting at the Crest HOA- a 12 home project on 200 acres just north of North Branch NY - an HOA I’m the president of until I finish building up there, I had a worker’s unemployment hearing that resulted from two previous denials of benefits to this long-departed employee, I had a long overdue meeting with the local utility company to provide electric to 6 of my homes, and I ran for a position on my condo board in St Petes.
All of these items took a different skill set, but skill set indeed. Some were wins, others were losses, still others (most) will be determined at a later date (court stuff). Once you don’t mind losing, you can actually get a lot of stuff done.
I also found 2 more pieces of land to buy, bringing my buying spree to 7 pieces of land to be discovered, negotiated, contracted, due diligenced and purchased before November 1st. Buying land comes with all sorts of starting guns - surveys, septic engineering, deciding which house to pair with the land, sometimes deciding which client in the queue to pair with the land, meetings, walking the land - dreaming up what could be, at what price, in which house style.
Certain pieces of land clearly yell for a certain house style. Others are more flexible and still others only accommodate a certain house. A lot depends on the grade and topo of the land. Gently sloping is best; a steep slope can be accommodated. Some of the toughest pieces are at first glance the most straight-forward - flat pieces of land look easy, until you try to get gravity fed drainage, or gravity-fed septics, or a walk-out basement - all benefit or even require some sort of sloped land to make everything work right.
What is also a bit counter-intuitiveness is the sense of privacy - heavy wooded and treed parcels don’t necessarily give you the most privacy - especially if it’s a deciduous type of forest. Tree trunks, bare of leaves, don’t create much of a visual screen. What is very useful are small or low hung pines or hemlocks, and even better than that is thick mountain laurel which can create an impenetrable visual screen - sucks to hike in before we clear it out for the house, but after that, provides a lot of privacy for these 4-6 acres homes sites.
Friday night lights.
When I walk onto a piece of land, all my senses are firing imbued with 25 years of evaluating land. Getting out of the car, with my dog, and walking the land. Front to back, side to side, criss-crossed and back again. Looking for deficiencies that can’t be fixed, looking for a neat building site with natural features be a view line, a big rock, a gentle slope. Evaluating the utilities on the road - is there internet, is there even electric. What do the neighbors look like? It would seem having no neighbors on adjacent properties would be optimal, but that’s not always, or even usually the case. I’m ok with the adjacent properties having houses or improvements on them, because then I know what I’m dealing with and can evaluate it in real time - can I see the house, is it kept up, are they weekenders, junky, neat, an asset or liability to what I might do? When it’s a vacant piece of land, you never know what some idiot might come and do too close to your property line. People do not use their brains in this type of work, especially homeowners- they don’t know or maybe care about the impact of their ‘improvements’ on neighboring properties. It’s foremost in my mind, and a lot of times what we do either has no impact on our neighbors or has a positive impact on the value next door with little to no disturbance of the peaceful existence they may have been enjoying.
I’ve now developed over 300 pieces of land - typically one building lots of less than 7 acres with direct road frontage to a town maintained road. That’s the low-risk way to go in this uber-risky business - buy the land, engineer your septic, know your property lines, get a driveway permit, submit your building permit application and get building. As opposed to ‘subdividing’, this is by far the quickest in and out of an investment cycle, with little in your way except your own construction production capacity and skills. Little in the way of municipal interference except building inspections. You are propelled or hemmed in by your own skills and team when you engage in what I do and how I do it. If imitation is a form of flattery, we are being flattered all over the place, with some companies like Western Sullivan Properties - a well-financed group with their hands in a lot of upstate business initiatives - they didn’t even try to conceal or improve on what we do/did - just made a copy of it and went head to head with us.
This will be an interesting story to follow - the Western Sullivan Properties story - because the dollar signs flashing from a few of their successful new build home sales motivated them to take a big swing and they now have 8-10 houses going that will be for sale. I’ll be watching closely for sure since to do such volume they had to compromise on some of the land selections they made since there just isn’t enough of these 1-off pieces I like to find - so they found some views on a big farm - some views that at the same time greatly diminish a sense of privacy, and they are building a bunch of homes within earshot and eyeshot of each other. Me, picking the land and placing the homes is an art - when you bastardize that in order to continue to have land available for your now-efficient construction crews, you can get jammed up, but you can be 5-7 homes into your plan before you realize it. It’s tough to balance - after a lot of blood and sweat and tears you put together a real construction team, and you want to put them to good work and build some houses and take advantage of the team, but at that same time that can inadvertently leave you in front of your skis in a marketplace that can be very unforgiving. I’m sure, since they aren’t original by plan, they saw our Crest project and misconstrued what we did up there - yes, it had some open fields but I spent a lot of time using the terrain, and slopes and hills and grass and large parcels to have the houses play nicely with one another- complement not intrude. A real test of my skills of house placement and privacy tolerances of my clients.
Just read in our local newspaper that our local radio station is closing one office and reducing programming across the board due directly to funding cuts from the Trump Administration. This radio station - Radio Catskill - has been a beating heart, integral part of the Sullivan County vibe for decades - broadcasting from a small studio in Jeffersonville and now a larger one in Liberty. The cultural impacts of these budget cuts on the fiber of small towns is real, and I might be even ok with it if it was being done honestly in an attempt to curtail federal spending, but that isn’t the case, it’s easy to see.
The red hot rental market are not red hot anymore, and I can’t really figure out why. I have a house in Phoenixville - literally one the best small towns in USA - and it’s just sitting there, unable to find a renter even though I lowered the rent to what I thought was a great deal, allowed pets, cleaned it up, etc… My realtor warned me about the softening rental market but I never expected nearly 8 weeks without a qualified applicant. And I have two more in the same area coming on line shortly. This is when you are happy your rentals are fully paid for and your living month to month on the rents, because you could very quickly find yourself in a poor position, especially if you had multiple units like I do. Instead, while a bit frustrating, I look at the situation with an air of curiosity rather than distress. Yes, the money flow decline is a bit disheartening, but I make plenty of money on other streams and whenever I’m paying a bill or not receiving income as expected, I really focus on my 50% tax bracket. It’s a successful psychological trick I use on myself - though trick is a strong word since it’s very real - if I was supposed to receive $5k in rent, it was only going to be in reality $2500.
As I watch my NY529 funding for Lucas creep up and past $400,000 with principal and interest, I’m at an interesting way station of my savings journey, since Lucas won’t need half of that most likely, based on his lack of academic rigor and effort. So It will be there for his kids, x4 since it will have 30 years to grow. So I should stop funding it each month, but it’s such a habit it’s hard to just stop. I think the same will be true when I stop working and begin calculating my retirement spending - it will be hard emotionally to eat into the principal of my savings after spending 30 years building it up, protecting it, growing it, defending it. But unless I’m going to leave Lucas more money than he needs, or plan on giving it to the local dog shelter, I’m going to need to spend it and that will be hard.