All Forum Posts by: Brendan L.

@Cosmo Iannopollo Naw I'd rather blow the deal apart before I get wrapped up in it. 

The only reason I'm looking at places here is because I currently live here, to be honest. Its simply where my job is right now and where I'm able to house hack. Not strategic. 

The "official" vacancy rates I've seen are 8%-12%. I'm worried about vacancy, too.

Appreciation is 1% if you're lucky. If you're REALLY lucky, you'll sell at the inflation rate. Of course, that's after the property has been on the market for 180+ days. This county is significantly higher time on market than everywhere else in MA, the graphs are stark.

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@Steve Bracero Why is that so common? I've seen it in a couple places now. My guess is that the owners don't know how to run it like a business and haven't raised rates since they bought the place 10-15 years ago, and are making less and less now and so want to sell.

I should call and see what they say about the water/sewer. It depends whether its metered or flat rate. Flat rate tends to be more expensive. I also got some inside knowledge that they'll be doubling rates soon do to an EPA mandated project.

I was looking into refinancing FHA's last night. Are there typically additional closing costs when I refinance?

Market: "Urban" area in Berkshires, MA. Area is projected to be in population decline, however, I see rentals as a better option for people moving to the area because they, like me, aren't sure they want to stay and houses stay on the market at a much higher rate than elsewhere in MA. Great location for families, next to the largest park in town, safe, nice area with easy main road access. Eventually will rent both sides out. 3bed/1 bath each. Current rents are 875 and 900. Average rents in area go for 1000-1100.

List price: 125,000

FHA 4% down

As-is income: 1775/mo; projected income: 2000-2200/mo

Annual expenses:

Taxes: 2800

Insurance: 1200

Water/Sewer: 1600

Cap ex: 2000

PMI: 1250

Repairs/Maintenance: 1000

Utilities(?): 500

Snow removal/lawn: 500

Property Management: 12%

Questions:

-What am I missing? 

-Why are current rents lower than the average?

-An alternative could be to get a rehab loan @ ~150-160k, updating some things and creating a 4th attic bedroom in each. 4 bedrooms are rare but average I could find is about 1300/mo. However, there is limited data about the rentability for 4 bedrooms, though a local property manager told me 3's and 4's have lower vacancy rates than 2brs.

-There is a slim chance I could avoid PMI via bank of mom by getting a locally offered 10.5% down with no MI. I couldn't roll renovations in if that was the case. Which is better?

-I don't imagine living in the area forever. Who do I need on my team, other than a property manager, to handle any situation that could come up?

-If I'm cutting it this close with trying to dance around PMI, should I maybe just suck it up and rent for another year until I can afford a proper down payment?

@James Masotti ,  Thanks for that. 

-With appraised value, is there a decent way for me to see what that roughly is without hiring an appraiser myself? How close is the town assessor's office?

-How do people successfully get offers accepted under original listing price? 

Duplex, 3br/1ba each unit. This would be my first. My analysis shows that after everything, with current rents (I believe to be 100-200 under market), renting both sides, and budgeting for property management, I would break even on cashflow at best. 

Now, there are definitely ways to make money (e.g. not hiring PM, raising rent out the gate, converting attic into a room), but naturally I want to get it as low as the seller will go. Should I show the seller my analysis and ask them where our numbers differ? How would I go about that with their agent? Just ask my agent to submit a worksheet with my offer? Or can I submit the worksheet and ask them to come back with a number they're looking for and or rationale why their original asking price is right?

@Adam Petterson Point well taken, I've been reading some threads about issues with cosmetic-driven flipping. Definitely a concern, for example, if they didn't do much to replace century old wiring or plumbing. I need to learn what pointed questions to ask that will reveal any issues or shoddy work. 

There are duplexes around my area that need a lot of work, but there are a couple that have already been renovated by flippers. They're priced to cashflow modestly with both sides rented out, with annual COC return at least 15% after accounting for property management, capex, and the like. The one I have in mind in particular looks to be one of the nicest, most updated properties in my market right now.

As a newb who isn't particularly handy, I wonder whether I would be better served getting a pre-renovated place to start, rather than a fixer upper that is potentially way way out of code, and trying to manage a contractor to make something nice. The buildings around me are 100+ years old and absolutely no new construction.

Has anyone went with a pre-renovated place and not regretted it as a first way to subsidize your own housing costs with minimal hassle? 

I'm looking to buy multifamily and my local market is the Berkshires. Population decline, low house sales, some of the lowest house prices in MA. However, rents scale decently. Take a look at these graphs:

https://www.trulia.com/real_estate/Pittsfield-Mass...

What does it mean that the number of house sales have tanked? Just that I should plan to own my property for a long time and it will be on the market for a while when I'm ready to sell? Or are there other red flags that might affect me that low house sales might indicate? What other indicators should I look at to help me decide if I want to consider really digging into investment here?

@Kenneth Garrett @Meghan McCallum There were in fact 2 means of egress, indoor stairs and emergency ladder from a window. Free shag rug and wood paneling to boot. 

@Kenneth Garrett Hmm. I'm going to see the studio entry tomorrow. My thought was, if needed, to add a spiral staircase off the back porch with a fireman's pole. If there is separate entry already, a door right out to a fireman's pole, how sweet would that be? If I can see a door and back stairway work, that will help. 

If only option was to rent the top as a 3br, numbers are still favorable for the product in my market.