All Forum Posts by: Ben Nadeau

I'm looking at a property that has two 2/1 detached units. The property is zoned multi-family. I believe the value of the property would increase immediately if these two units were divided into separate single families. Does anyone have any experience with this? I'm wondering what I am missing that could potentially make this a bad idea. My plan would be to purchase, renovate, and rent both units. However, prior to selling in the future if the property could be subdivided, I believe that would increase the value. Thanks for any input!

@Colleen F. thanks for the input! I see you’re from Narragansett, I’m originally from Jamestown, RI and my neighbor out in Bend is actually from Barrington, small world! I don’t have kids myself so I shouldn’t speak for what young families would be looking for so I appreciate the feedback. I think I need to step out of it from a personal preference as we’ll only be in the house for another year or so. 

Hey Everyone,

Bathtubs use to seem like a requirement in one bathroom homes. Does anyone else feel this need has shifted? In the middle of renovating my primary residence which will eventually be rented and/or sold  down the line. A shower pan/glass doors/tile/rain shower head will be much more visually appealing (and I think appraise higher?) in the one ~80sqft bathroom than another tub/shower insert. The only NEED for bathtubs anymore seems to be for young children. My thought process is a young family wouldn’t be renting or buying a 2bd/1ba home to begin with so the need for a bathtub may be unnecessary. I live in Bend, OR if market plays a factor. Any thoughts? Thanks!

@Ian Walsh

Hey Ian, do you quantify this risk or is it primarily an emotional risk avoidance? You hear all the time to leave emotion out of investing and it can be a difficult quantify the risk vs reward for local and out of state. I am curious what areas of risk you feel is mitigated when investing locally. 

@Brian G. I have long term goals nailed down and in short that includes replacing my current income with cash flowing properties. I make a modest income so this isn't a lofty goal. This job allows me 4 days off/week, so I am able to commit a couple full work days a week to reaching those goals. With that said, if I were to reverse engineer that goal in the simplest context, out of state would get me there the quickest. Cash flowing rental properties are near impossible to find in my local market. Do you use property management for your long distance STR? I hadn't thought about searching for a good out of state STR market, what were you looking for in a market when you decided on this strategy? How do you search for deals in the STR market you're in? What do you mean by "drive to" vacation market, as in near by to a city where most renters are local to the area? Thanks for your input, you've sparked something for me to think about!

@Axel Meierhoefer

Thanks for the insight. I think reverse engineering long term goals as you're alluding to and as @Brian G. has mentioned is ultimately going to lead me to out of state. I am certainly open to small multi-families, and if I were a single man I would be house hacking a small multifamily but I have to consider the wants/needs of the others in my life. I would be interested in hearing more about what approach you are taking with your daughter in California. I'll reach out directly!

@Julian Sage

If local, yes. If out of state, no.

@Jeffrey Holst

Hey Jeff, What responsibilities does each of you hold in your partnership with your out of state partner? I'm interested to hear how I could structure a partnership with a boots on the ground connections in the Chatt market. Right now, I foresee the partner handling property management, overseeing rehabs, some small maintenance, checking out possible properties.  Thanks!

@Greg Koszkul

I think experience and developing a team that is reliable/trustworthy in an out of state market is much harder to develop. Meeting with lenders, contractors, realtors, etc. locally and in person makes the process much easier as well as managing that team. If one person doesn't work out, it is easier to start that search again locally when you can personally meet with a few different potential team members rather than vetting over a phone call from 2000 miles away. What I am trying to weigh is, is a potential "pretty good" deal in my backyard with going for over the headaches of an out of state potentially "great deal."

My logic behind the P-ville home is a full rehab would give years without major maintenance or capex allowing for a lower price to rent ratio to make some sense out of the gate IF I felt the need to stay local. And I agree that area should see appreciation as more and more get priced out of Bend. It has already seen 15% appreciation in the last year. 

Bend has definitely cracked down on STRs. As far as I know, all permits are spoken for under the fact that no property within 200ft of another property with a STR permit can qualify. The only way to acquire a STR permit is by purchasing a home with one already in place or if one is essentially given up likely due to holding costs or management hassle. Home with a STR permit see a premium tagged on their listing price when sold. We have not seen a slow down in tourism during Covid so I don't foresee owners of STRs looking to exit anytime soon.

Which markets are you looking into? Are those homes currently renting for that without any rehab? What are your thoughts on potential appreciation outweighing or leveling out a lower price to rent ratio?

You nailed it with the current state of the market in Bend. A 750sqft 2bd/1ba home down the street from me was listed at $360k a couple weeks ago, local friends offered $375k and didn't get it. Assuming it went for close to $400k. It's crazy. That home would rent for $1600 tops. 

Thanks for the response!