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

I'm not going to try and argue that the gloriously seasonal weather we've been having since July makes up for the 9 months of constant and dreadful rain we suffered through from March 2023-December 2023, but evaluated solely on its own, it's been clockwork weather of warm summer days, then a cool September, and shiver-me-timbers October. Leaves are changing, aurora borealis came through last night, and fall is unmistakenly and undeniably in the air.

Beautiful fall day up at our project at the Crest, in North Branch NY.

The weird thing about the show from the heavens last night was it wasn't able to be seen with the naked eye, at least from NE Pennsylvania. The iphone brought out the colors the eye couldn't see. Not sure the science behind that.

I took a drive around to a half a dozen job sites, and now that we are winding down from a 4 year sprint, I'm starting to ask myself how I actually pulled off what Catskill Farms pulled off. Our effort and results are really hard to grasp now that they are in the rear view mirror. It was a lot of things, but the number 1 thing it was was me holding the team - field and office - together on a daily basis. No one else did that - that was all me. Hiring, firing, mentoring, correcting, supervising, interceding, fixing messes, etc... When I went out to the field, we have 6 homes going in Sullivan County, another 14 in Ulster, probably one in Dutchess, and at one point another 4 in Phoenixville PA. I would go out and create list after list and bring it back to Amanda who had her own list and we would just work through them, item by item and house by house. And Breanna would keep the money flowing.

This new Ranch foundation on 21 acres went in about as fast as you can put a foundation in. Ready for framing by mid week next week.

The complexity, on all levels - deal-making, permitting, engineering, breaking ground, inspections, scheduling, ordering, client coordination - was not for the faint of heart and not achievable to most people. It was literally a 4:30am to 9pm, 7 days a week focus. And, now it's over. The homes have been built. The profits banked, reinvested, growing. The experience gained forever to be leveraged. The team members - those who are left standing - sharp, polished and knowledgeable. The systems put in place scalable on demand. The relationships battle-tested, nimble and responsive.

The custom home in Forestburgh is coming out great. A testament to the talent of the team.

A 800 sq ft Ranch coming to market shortly.

An 800 sq ft cabin also coming to market shortly.

So as I toured our 4 homes under construction yesterday in SuCo, I look back with genuine amazement that I was able to keep that frenzy of activity in line, in order, moving forward, controlled and completed for the last 4 years. That's a long time to be in the red RPM zone. That can cause some measurable damage in a wide range of health issues, mental and physical, and I think I can proudly claim that I bore them all, suffered through them all, and got up and took that first step of the journey the next day, and the next, and next until I've reached today - with it all behind me except the healing.

Another good looking Perfect Barn just about complete. We've built 5 or 6 versions of this home over the last year. Such a versatile home.

Although, when you can say your building and selling 7 homes currently across 2 counties is walk in the park, you know you've far outpaced what poses as your competition.

Great night for Friday Night Lights. My son turns 16. We've had quite the run together as Father and Son team. Happy Birthday Lucas Richard Petersheim.

Wow, now that I’m not spending half my energy on a pointless legal exercise, there’s actually a lot going on in the world, with it evenly split between greatly benefiting me and greatly possibly harming me.

But first things first - 

If anyone is looking for a good podcast, the New Yorker has done 3 seasons of an investigative nature where they dig deep and exhaustively into some case or situation.  It’s called In The Dark, and while I’ve only finished the 14 part season 2, and now listening to season 1, I can recommend it.  As a student of history, especially Civil War history, reconstruction, Jim Crow eras the Civil rights moments, the ingrained racism in every fabric of that southern culture is always astounding.  In season 2, you see how even simple justice is denied through an institutional racism that has no fear of consequences.  I’m sure not everyone and their mom drives as much as I do, but it’s a good listen and the time and energy and I guess budget that went into the show is mind-boogling.

And I came across this - 21 Travel Books - that looks really like a good curated list of books, fiction and non-fiction, about traveling.

With the 2nd hurricane bearing down on the Gulf Coast of Florida, my St. Petersburg investment of a top floor condo in a new building is under a pressure.  I didn’t buy it yet but have a large deposit down and have been waiting to close for like literally 3.5 years - it’s a new building just finished, but for some reason I still haven’t closed and haven’t got a lot of information about why.

My risk I don’t think is not flooding or wind - in fact, my new building should flex in the face of this storm, but the risk that is apparent would be a general avoidance of Florida in general trend.   Luckily, I got in early, at a good price, so while I was kicking myself for not spending another $100k or 2 to get lake and ocean views (and get that appreciation that has far outpaced my west facing unit), I’m now happy to have gotten in at the lowest possible price, the same thinking I had 3 years ago.  

Money and making money and investing money is always a real mind f$ck - you always have FOMO about what you didn’t do or what someone else did, and you are always second guessing your timing - many times rightfully so.

For instance, I sold a bayfront Miami condo in March 2020, just before the Covid influx occurred, so probably lost out on $125k if I would have timed it perfectly like a year later.  But at the same time, as many of you know, layered over the Covid boom times was the Surfside collapse and new Florida condo laws that resulted in maintenance fees skyrocketing, and large one time assessments in the hundreds of thousands of dollars per owner in order to properly fund improvement reserves.  Now the Florida condo market is in distress, especially among older buildings where buying into one is like buying a time share, but worse, since you never know what type of special assessment is coming down the line.  So that one is sort of a wash, although selling it was part of a larger effort at concentrating my efforts and investments, narrowing my focus, and that has resulted in a tremendous financial upside as a lack of debt compounded gains.

So, the destruction of the Gulf Coast of Florida is a bummer for sure, and poorly timed for sure, and feels undeserved for sure to all involved, but one thing for sure, because I don’t have leverage, whatever will occur will be much easier to navigate and work my way through because of the lack of debt on the property.  There’s lots of stories about leverage, and my journey has been fueled by leverage, but I didn’t really start accumulating real wealth until I made it a point of using less leverage.  I mean, that’s not really the right way to say it - when the leverage produced free cash flow and ultimately profits, I used the cash flow and profits to pay down debt and not accumulate more leveraged assets, and that resulted in more cash and more assets in a more sustainable fashion.

Speaking of fashion...

I can’t say my forays into Florida real estate have been hassle free, that’s for sure.  And I’m always amazed at the continued rush to buy build and speculate down there, when everyone knows it a bit of a ticking time bomb.  Nothing will bring that home more than like a 5 year period of hurricanes that doesn’t spare any corner of the State.

The thing about floods and rain and wind is you can see the devastation a decade after - an abandoned house, a bunch of downed trees, the carved discolored sides of a receded river.  It’s expensive to clean up, and sometimes, it just stays the way it is.

Can’t say I’m that impressed with the federal government response, or at least how they are communicating it - seems like a perfect opportunity to show leadership, to show how Americans come together, to show that human spirit of helping a neighbor - the trending TikTok videos of 75 Walmart tractor trailers convoying down to NC was just the type of human story a good politician should latch onto like a spur on a hike pant leg.

Helene just sort of came out of nowhere.  But this new one, Milton, it’s pressing down with lots of notice, which always reminds me of one of my favorite movies, The Curious Case of Benjamin Button, where Brad Pitt’s character ages backwards and the movie is overshadowed by the approach of Katrina. Since I wrote this this morning, the hurricane has increased in strength in dramatic fashion.

This Phoenixville house above was raised 8' after the storm.

Katrina’s a good case in point - when I was there in 2015 and took a long bike ride through the 9th Ward, there was a lot of evidence of the flood, which was what, 2005?And I just returned from Phoenixville where I own 4 single family residences which saw some serious flooding from Ida in 2021 - and lots of homes that were flooded are still vacant, and I guess the first wave of FEMA money for tear-downs and federal buyouts came through, since there were at least 6 houses torn down with nothing but iron piping from the well hinting at the lives lived there previously.

The flood was serious, putting 8' of water into this gigantic basement of this home, coming within 3" of seeping into the first floor, which would have been a disaster. Bad enough as it was.

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What is looks like not flooded.

My tenant being rescued.

Playing with real estate is often a heartbreaker - so many things can interfere with the best laid plans of real estate enjoyment.

The flooding in western North Carolina and Tennessee is frightening.  With no warning 16”-24” of rain fell onto a mountainous region crisscrossed with small streams and rivers, turning meandering waterways into raging monsters.  I mean, we have that all over my working and living territory - lazy little streams that barely flow sometimes.  If something like this happens again, somewhere else, people will start to peer off their decks at those little streams with a feeling of unease.  If this is climate change - random, unpredictable storm events that aren’t even considered a possibility in civil engineering planning processes, that will become disorienting very quickly.

This catastrophic rain event puts my mind to work on a few fronts.  I list them first, so I don’t forget: insurance, familiarity, construction, consumption of news.

In some ways, we all are the proverbial frog in the boiling water.  The water is getting hotter, the symptoms and consequences of a changing climate - more disasters, higher costs to rebuild, uninsurable areas, less predictability, a human nature sense that it won’t ‘happen here, to me’.

I don’t watch any network or cable news.  As a news junkie - or a reformed one, as I had a hard time to continuing to read the news as propaganda that became ever present recently - I read my news, or catch it on TikTok, and both approaches are vastly different than watching it on one of the cable news shows.  I have a friend who gets her news only from blips on the TV and while taking zero away from her, her opinion and perspective can be summed up whatever is being shown and repeated on the TV.  Tik Tok actually has a pretty interesting way of delivering the news, with different sources, different voices, none of them predictable, many times personal accounts, many times contradictory, many times with greater length, meaning more closely paralleling the actual event duration rather than saturation coverage and then moving on.  The stuff broadcasting through TikTok from NC or St. Petes is truly up close and personal, without the distracting political goals.

I’m familiar with St Pete’s, purchasing a pretty fabulous top floor condo in a best in class building in DownTown St Pete’s, which has experienced a surge in downtown condo construction.  I’ve been waiting since spring of 2021 for it, having signed up for it prior to construction.  This building is 30’ above sea level a mile or so from the nearest body of water so other than psychologically and some debris cleanup, unaffected by a storm that left its world class beaches in disarray.  The rebuilding of the sandy beaches effort was turned on its head when all that new sand was pushed inland, and now the streets and houses a block or two from the ocean are covered with the tiny sand molecules.  In NC, it’s all mud.  I experienced a flood event in 2021 in Phoenixville PA where I own 4 single family residential rentals, and one thing we didn’t have for whatever reason was residue mud.  Just water that rose, flooded us, and then went away.  The mud, now that’s a different cleanup story altogether.

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I’m also familiar with Ashville, specifically the Biltmore Village and Manor, the largest home in America built by the grandson of the Commodore back in 1890.  Climate disasters are the true equalizers, since neither wealth nor privilege protects against Mother Nature, or even more true, since wealth likes water, perhaps the upper classes are even more at risk here, over time.

It was always clear that insurability of homes in certain areas was going to bring about a ‘come to jesus’ moment in confronting climate change, because while politicians can posture, and us individuals can hide from it, the science and actuarial tables of insurance are solely in the business of risk management, and the risks were/are increasing, as are the flow through insurance problems of insurance companies pulling out of areas or raising premiums to shocking levels in those areas.

What is now apparent is that insurance companies can never hedge their risks enough by solely concentrating on at-risk areas and that’s what we are seeing across the board - that all insurance is getting more expensive, particularly homeowner policies.  What used to be $800 or $1200 or $1600 is now $3800, especially in areas not close to fire stations or fire hydrants, ie, rural homes.  So the insurance companies are, in order to stay financially solvent, spreading the pain to all their policy holders.  Same is true with car insurance - everything is more expensive to fix - cars, homes, boats - and that results in higher premiums across the board. (caveat - some of this also, for me, is that I'm buying nicer things, and haven't adjusted my 'insurance mindset' to the obviousness that nicer things cost more to insure - a Mercedes is more expensive to insure/fix than a 1998 Rav 4, a 2008 Mariner, or a Jeep Grand Cherokee).

So in some ways, insurance costs and/or the inability to actually even get insurance, is the proverbial canary in the coal mine, and that bird is experiencing difficulties.  We had a homeowner who had a wood-stove, installed in new construction 10 years ago, which was flagged for improper installation, with a demand for installation records and proof of professional install.  That’s one hard exercise for a new homeowner trying to trace the installation back through 1 homeowner, it’s another when the wood stove was installed in 1952 and the same demand is made.

What we are seeing is this new-found seriousness on the part of insurance companies to reduce their risks.  And also making payouts a lot more difficult.

I’m pretty careful about where I build.  But if we start to see random flooding after intense rain where every stream is a potential problem, that’s a gigantic expansion of risk from where we currently are, with oceanfront and documented flood plains at most risk.  I mean, if the government starts to change flood plain maps as flooding becomes more pronounced, and one day you wake up and your home is now rated as flood prone, that is big deal for the homeowner and the inherent investment in the home, since flood plain/prone homes are worth less.

Anyways, what has happened to the those communities, communities I have visited and know well, leaves me with a disorienting sadness for those folks who were just doing their thing, at 2000 ft above sea level, and then it was gone.

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Lucas has a constant stream of high school peers sleeping over.  Plenty of space, lack of parental helicopting, close to town and close to school make it a go-to stop for those with an invite. After homecoming, we had 16 kids sleep over. Everywhere I went the morning after there was a kid - indoors, outdoors. People with previous sleep over experience got the inside track on the most comfortable spaces, and probably more importantly, zeroed in on blankets and the like.

Just waiting on the couch to arrive - I didn't realize it when I ordered/designed it it was going to take 4 months to arrive. Love the new Japanese floor chairs with adjustable seating positions.

Prepped breakfast of eggs and pancakes and milk for pre-game meal against Abbington this afternoon.

Packed a big lunch for them since they will be gone all day. I like flexing the Dad as Mom thing - I think I do it pretty well.

Football season is off and running and Lucas Petersheim made his varsity debut against Wallenpaupack when our team - Delaware Valley Warriors - took a big lead.  Popped his varsity cherry.  He was pretty excited.

We have one more sale to finish this year, a Barn home on nearly 5 acres just outside Narrowsburg.  In maybe a first for us in Sullivan County, this family moved their life upstate and enrolled their kids in the local rural high school.  We seen that a few times in Ulster, but not as much in Sullivan. This 3500 sq ft beauty is turning out to fit the needs of a wide-range of families - the first floor primary bed/bath ensuite is a good look.

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We have 4 homes we are completing that aren’t being actively marketed but will be shortly.  Enough sales for one year, and with a tax bill that is hovering around $750,000 coming due shortly from 2024 earned income.  Even though we aren’t the most expensive home supplier in the counties we work, and I feel we offer a ton of value, because at heart we earned our stripes during a much more difficult upstate economic environment, so learned to be uber-efficient just to survive.  So, during pre-covid times, this ability helped us stick around for 17 years, and during and post covid times, it allowed us tackle more business, and expand our profits per house - which after 20 years of ekkking by, was well earned.

The thing about the sunk cost thing, and the sunk cost fallacy, is even if you don't fall into the fallacy and exacerbate a costly situation, extricating yourself - even if it's the right move, stings. It's not as if doing the right thing - properly evaluating risk vs return - eliminates the pain of the sting. But I guess just like a bee sting, it lessens and dissipates before you know it, whereas staying in the fight prolongs the resolution and possibly the result is a long felt amputation.

As we slow down, purposely, some very neat opportunities have been coming our way in which I have the time to entertain fully, which is a big switch from moving along from one to the next with no time to monetize or even consult on post-build projects. And we are just getting started on a 5 lot subdivision in Kerhonkson.

The garage door went in at my house, so that's all finished for now.

Did a ton of weeding Friday, then closed down the pool on Saturday.

This is definitely bear poop on one of our driveways. The nerve - raid our dumpsters, poop on our driveway. Hard to scale it in the picture but it's about the size of a dinner plate and 2" + thick.

All in all, it's a period of decompression after nearly 3.5 yrs of leaving it all on the field, 24/7. Quite the run.

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