Is anyone investing in Andover, MA?

Question

Hello everyone,

I am brand new to real estate investing and working on my first deal. My partners and I are moving forward on a flip in Andover, and we are looking for a good general contractor, and advise on the level of rehab. Can anyone recommend a good contractor?

Justin Silverio · Answer

@Paul Tanso I have a couple of questions/comments that you should consider:

- Is the house on septic or town sewer?  If septic, and its a 2 bed septic, then you can only market it as such.  Therefore, even though you'll add sf, you can't market those rooms as additional bedrooms

- I would also consider putting in a bathroom on the 2nd floor.  Most buyers want a bath on the same floor as bedrooms

- If you add a second floor, will the existing heating system and electrical system be adequate?  You would have to add vents/radiators & electrical on the floor

- The price difference of $50k-$100k is concerning to me as I would think your rehab budget would be pushing $50k+ assuming the items you noted.  That doesn't even take into account your purchase/holding/selling costs.

Brian Ortins · Answer

What is the scope of work? My contracting business focuses on interior remodeling and we work with other contractors for exterior, HVAC etc. We are currently booked, but I would be happy to assist in any way I can.

Paul Tanso · Answer

Our first deal is almost in the books!  We are  planning to close early next month. As it turned out we sold the property without doing any work to it. We invited our realtor over after having come up with a rehab plan with our contractor, but the realtor told us not to renovate. He said he could sell it as is - for a profit. We gave him 30 days with the listing and 2 days and 15 showings later he had it sold for 30% more than we paid for it. Nice deal! The Andover market is very hot. It's a beautiful town, great schools, and great location. We would love to buy more there, if we can find something worth our while.

Thank you all for your initial guidance. We are looking for another property, so if you know of one within 10m radius of Andover please let me know.

Brian Ortins · Answer

@Paul Tanso  Let me know if I can be of further assistance.

Paul Tanso · Answer

@Brian Ortins, I will give him a call Monday. Thank you, Brian.

Brian Ortins · Answer

@Paul Tanso  You can call John Howell at 978-804-0235 to see if he is booked in July.  Feel free to mention my name.  If he is booked, I have a couple of other contractors that I can refer. Let me know how you make out!

Paul Tanso · Answer

@Brian Ortins do you know of other trust worthy contractors in the area? I expect to start the project mid-July, if that helps.

Paul Tanso · Answer

I did mean town septic, sorry. I am lucky in that I partnered with two great friends who are both very experienced real estate investors, one is a long time mortgage broker, so he really understand the finance side of this.

We are excited to get started on this project. Right now we are focused on closing the deal so ewe can start rehabbing. We need to build out the team, which is my current worry.

Thanks for collaborating. I am looking forward to joining the ranks.

Justin Silverio · Answer

Paul - Did you mean to write that it's on town sewer?  That's great to hear that all those items have been thought about and you've done some due diligence of the market.

I don't think the increase in DOM is indicative of the Andover market.  Homeowners are seeing that the market has shifted and they are being unreasonable on their list price.  Hence the reason why you are seeing price drops.  Buyers are smart so as long as you price it correctly on the back end, it should go pretty quick.  Andover is a very desirable town and even though inventory is picking up, rehabbed homes are selling well.

Paul Tanso · Answer

All good points, Justin.

The home is on town water. There is baseboard heating upstairs already. The floor plan from the town is only counting 1/3 of the upstairs floor space. We believe it may be due to the funky layout and placement of the staircase, but something we will look into.

In terms of the budget, lets just say we are getting an incredible deal from a  friend.The deal fell in our laps at a time when we happened to be looking for a first deal. We couldn't pass on it.

We are considering a 1/2 bath up stairs, but that may blow our budget, because to do so we'd need to dormer the roof. In speaking with a couple realtors and doing some online comps of the area I learned many other homes in the area are 1 or 1 1/2 baths, so it may not be a deal breaker, but I agree with you - a second bath is very desirable.

Having said all that, are you all seeing a slow down in sales? I am seeing a number of homes in this area on the market for over 60 days, with 2 or 3 price drops.

Is anyone investing in Andover, MA?

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