All Forum Posts by: Bill Couture

Congrats! Awesome to see a success story from another investor in the small state of CT

Hi James. I'm a business loan officer at a local, mutual savings bank in Eastern CT named Jewett City Savings Bank. If you want to take title in the name of an LLC, you'll need to obtain a commercial mortgage. It's unlikely that you'll find a lender that will give you a fixed rate residential mortgage in any other title than your own name. Unfortunately as you're experiencing, commercial mortgages come with a premium (higher interest rates, points, closing costs, etc.)

If the building is four units or less, you might be better off just obtaining a conventional residential mortgage in your own name. Granted, you lose the protection of an LLC, but your insurance agent and attorney should be able to help mitigate the additional risks.

Hi @Robert Lindsley. I'm very familiar with financing multi-families in Norwich. My office phone is 8603767560. Thanks!

Thanks for the mention Scott and Ryan, feel free to call me at 8603767560. Hopefully I can help.

@Dan Leyden Hi Dan. I wish we could do financing in Bridgeport and Stamford but unfortunately, it's just too far out of our market area. Being a community is great because of the personal attention and willingness to make sense out of deals. The downside is not having the reach and systems to service large geographic areas like the large regional and national banks. I'd recommend knocking on a lot of doors of the community banks in your area and ask to speak with a business loan officer/commercial lender. Do some research on the Bank's website so you can go in with a name.

@Victor N. Hi Victor. Since we hold all of our mortgages in portfolio (we don't sell them to fannie/freddie) we technically don't have a limit on the number of mortgages an individual can have in their own name. We have an internal comfort level of 10 but that's subjective depending on the Borrower. Definitely no limit on the number of properties you own. As long as you have great credit and the numbers make sense (make sure your tax returns reflect accurate rental income and expenses) then we can usually do the deal.

@Victor N.@Scott Hollister @Dan Leyden

@Victor N. @Scott Hollister @Dan Leyden Thanks for including me on the thread. Just confirmed with Jewett City Savings Bank's residential lending department and yes, we're willing to do a non-owner occupied HELOC on the duplex. We usually try to lend solely east of the Connecticut River but Meriden isn't too far off! We'll actually do HELOC's on any 1-4 unit building if the title is held in your own name (no LLC). You can always quit-claim the property back to yourself if it's now held in a LLC. Biggerpockets won't let me post the Bank's website, but feel free to google JCSBank.

Victor, feel free to apply for the HELOC online. You would have to come to one of our branches for the closing which I'm sure wouldn't be that big of a deal for you. Make sure you mention my name in the application comments so I can monitor the process with the decision makers. You can also do a cash-out refinance for up to a 30 year term. The downside of a cash-out refinance are closing costs. HELOC's don't have closing costs and only have a modest $45 annual fee.

Looking forward to another great meeting!

Hi Greg. Congratulations on the rooming house purchase. I just purchased my second rooming house as the lure of the extra income is too good to pass up. I honestly spend roughly two hours per week on my 14 unit (13 SRO's, 1-2 bedroom apartment and that time is spent on texting tenants for collections and communicated with the tenant that does the weekly cleaning. Even if you turned your 2 bedroom apartment into 2 individual rooms giving you 8 total, I wouldn't plan on having a property manager on-site. I'd maybe pick out the tenant you have the best relationship with to have them keep an eye on the place out of the goodness of their heart (no compensation!) Maybe someone in the property is willing to do the cleaning/Supply purchasing in exchange for discounted rent. I give my live-in resident/cleaning guy $75 off his $125 rent per week. If that's not an option, hiring a cleaning person to do the work one day per week for 2 or 3 hours. Probably will cost you $50. Install some fake security cameras, or real if you don't mind the expense, to keep eyes on the place.

Most of the tenants are connected to others in the community looking for the same type of housing. Might be a coworker at their blue collar job, their buddy at the American Legion Hall or somebody in their AA group. Best form of advertising is word-of-mouth so let everyone in the house know when a vacancy is approaching. I'll post an ad on Craigslist as well but utilizing the existing tenant pool has been my best resource. I always do credit checks for apartments but not for rooms. I do a free criminal background check through the state's judicial website and will not allow prior violence, larceny, child issues. I always ask how long they plan on living there and shoot for six month's minimal. 80% of my tenants work but you'll get 1 or 2 that are on social security disability and/or retired.

I put nice 32" flat screen TV's in each room that I'll buy used for around $100 from Craigslist or from the local pawn shop. Never had an issue with theft but I have thought about etching "property of Bill Couture" or something similar into the top of the TV base so they can see it. 

I buy a 10 cubic foot fridge for every room and provide WiFi along with HD cable and all utilities. Twin sized bed for most rooms with a full size for the larger rooms.

Let me know what other questions I can help with. I love this stuff!

Bill C.

Hi Melissa. There aren't any tax incentives as it's simply a privately owned, low income building. You get the obvious tax deductuons from operating expenses, mortgage interest, depreciation, etc. just like you would any apartment building. If it was owned by a non-profit, say as a veteran's home or a sober loving facility, I'm sure the tax situation would differ. What I look for in converting a building into a rooming house is as followed: property has to be in a commercial zone, property should be in a low income area of town, property should contain at least 10 units (economies of scale), if apartments are presents, can living rooms and common areas be converted to rooms. I'm certainly not the rooming house expert and every town treats them differently when it comes to zoning rules and building codes.