All Forum Posts by: Anne T.

Anchorage, specifically

She may be residing in Alaska.

I’m looking for Carol P. Fairfield, owner of 129 Cotton Hill Road in Belmont, NH, and 52 Countryside Drive, Gilford, NH. If anybody knows how to reach this landlord, please send her my way. I need to make her aware of some tenant issues. Thanks in advance! -Anne T.

@Scott Krone . Thanks Scott. The comps I pulled were all 3-family comps, too. It's an interesting risk. If I had more of a cushion, then I might try making that offer. I suspect the seller won't budge, though, regardless. There hasn't been a price drop in over a year. 

I did find it interesting that the biggest problem for rental housing (or housing in general) at the moment in NH is that there is a shortage of homes under $300k and rentals under $1100/mo. People are only building 3+/2+ SF. No one is really building multifamilies, and, if they are building apartments, they are building 2- and 3-BR apts. It's now impossible to even find 1BR or studio apartments for under $800/mo here. Which is crazy given the median income levels. 

That was one reason I was interested in this particular property in Keene -- to be able to have space without a roommate and be able to afford it and live in a good area, to me, is always going to be easy to fill. I don't know what types of apts they are constructing for that 200-unit bldg, but your point has made me think about it some more...

People forget that just because there are a gazillion brand new, high-end 3BR apts, that doesn't mean the demand is there for them. 

@Jay Hinrichs. That made me LOL.

@John Thedford, @Sam R., Yeah, I pretty much expected the lock out on the main apartment would be a huge no-no. Any thoughts on locking them out of amenities (e.g., the fitness center, parking area, etc.)? I'm guessing that also wouldn't be legal.

I would think a remotely changeable pin pad might work for the vacation rental side. Hard to do with a key fob if you are not on-site.

My business partner and I have been pulling listings, visiting properties, and working our way through the Deal Calculators to try to gain understanding of how to properly evaluate MFH deals. One particular property stood out last weekend. I would like some input from the BP community on it.

GENERAL INFO

Location - Keene, NH (university town)

Built - 1900

Comparables - $275k+

List Price - $214,900

Taxes - $10, 500/year

ISSUES

1. legally, it's a 3-family. Illegally (since the 1960s), it is rented as a 7-family. Three 2BR/1BA apartments plus 4 studio apartments. (I would guess the studios are the illegal units given the layout of the property.) 
2. The property is owned by an elderly woman who was recently widowed. Her husband had been the property manager prior to his death. The son is attempting to just get it sold and is not interested in owning/managing it. The widow is in poor health, and the son is focused on taking care of his mother. 
3. no current income/expense data. The son either has no information, is too busy, or is otherwise disinclined to provide the information. The information from 2015 shows average of $800/mo for the 2-BR units, and average of $450/mo for studios. Obviously, even just based on the 2015 data, the price + taxes (not including renovations needed, etc.) make this property impossible to cash flow if the town ever clamped down on the extra 4 illegal units.
4. Two tenants are hoarders and their studio apts are in desperate need of renovation (i.e., tear out to studs) to be livable by lower middle class standards. They are long-term tenants, though (one has been there over 27 years).

HIDDEN OPPORTUNITY?

Obviously no conventional lender would touch this property, which I suspect is the reason it has been on the market for over two years. My partner and I have debated this. We each have veto power, so we will not be purchasing this property. However, we did brainstorm the following offer scenario:

Owner-financed at $140k @ 5% APR with 3% down, plus $10k rehab (so ~$15k out of pocket) based on the assumption (and negotiating angle) that it would have to be switched back to a 3-family (and therefore we only counted 3-family rents). Assuming roughly $2700/mo gross income, expenses roughly $750/mo mortgage, $850/mo taxes (WOW!), plus insurance, water, sewer, trash, plowing, and lawn maintenance. (let's say $800 just for round numbers). Net is probably $300/mo. Then if there are no hammers coming down from the town code enforcement officer, the studio apartments would potentially net $300/each/month after expenses (those include Heat, Electric, HW).

So the potential positive net cash flow is anywhere from $300/mo - $1500/mo. 

THREE OTHER CURVEBALLS

• The city of Keene is allowing a large 200+ unit apartment building to be built just off Main Street (which is closer to campus than this property). 
• The University now requires both Freshmen and Sophomores to live in campus housing (was just Freshmen until last year).
• Enrollment is down 20% at the university.
• Town is taxing based on 4+ family "commercial" designation, but Code Enforcement insists the house is only legally a 3-family. (we have a copy of a zoning board decision from the early 1980s confirming that).

So... what would you do? Any other creative ideas for getting the property and ensuring positive cash flow? Or just chalk it up to a Zombie Apocalypse and run away as fast as possible? :)

@Russell Holmes, yup, best skills you can teach them -- critical thinking, long-term goals with short-term milestones, and self-reliance. ;-) good luck. Keep me posted as to how things go.

Ok, full disclosure here -- I am a part time Realtor, part time novice investor, and full time Tech nerd. For my day job, I develop test equipment and solve people's network and wifi problems. So, just wanted to put that out there. :)

This past week, I attended the International Security Conference and Expo (as an exhibitor). It happened that I was next to the Assa Abloy booth. For those of you who don't know, Assa Abloy is a high-end door lock manufacturer.

They were showcasing their new Smart Locks. The system allows you to enable and disable door access remotely. The tenant (or hotel guest) uses a key fob. Let's say the tenant doesn't pay their rent on time, you can restrict access to, for example, the Fitness room, main door, or their apartment. 

I am curious as to what tenant's rights' issues this might pose, and if it might be mitigated/circumvented if it is detailed in the lease. I realize this is likely state/county/town specific, but I was wondering if

• anyone has used a similar system
• you are aware of specific laws in your area that would be relevant

@Michael Eastland. What mountain is it near?