All Forum Posts by: Danielle McKahn

Hello! I have a small real estate development/construction/investment company with four partners. We've been honing in on a pretty good development/investment formula that is working for us where we buy an existing single or multi-family house that can be improved or easily split into smaller units, and then we also add small new construction units to the property (townhomes or duplexes or cottages) and, generally, we rent them all out (though we have sold a couple of single family rehabs and we may sell the units in our next big project... TBD).

We have a few projects under our belt that we also own/manage at this point...we completed an 8 unit project (all rented) and we completed a 5 unit project (all rented) and we are in-process on a 9-unit project and have a larger one in the hopper (maybe 18 small units that will be sold, currently has two units rented). 

So far, our local bank that has financed all these projects has required personal guarantees of all four of the partners. But, my partners have asked me to figure out when and how we could be able to access nonrecourse loans against just the company collateral instead... It's been a bit of a dead end asking this question of our current banking partner... I'm starting a conversation with another local bank but I have a feeling it won't go anywhere. What do we need to do to get to the point that we don't need to personally guarantee each property/project loan? Is this is a size thing (company just needs to get bigger/have more equity), or perhaps a business structure issue, or should I be looking at different financing sources other than local banks? If we DO find nonrecourse loans, I assume the interest rates are higher (how much higher should we expect)? Thank you in advance for your help! Dani

Hi Benjamin. Try Roger Roberge, he is a real estate investor and developer, and a broker with realtor company, and has a property management company too. All Springfield based/focused. https://www.realtor.com/reales...

http://www.rrandcompany.com/

Yes, sounds to high. May have to do with distance from fire department....I pay $2,300 for my 3-family in Northampton. Here's the the agent I use (in Holyoke), I've always found him helpful:  Michael Regan Clayton Insurance in Holyoke. I seem to be prevented from posting contact details here but you can find him I'm sure...

p.s. check your zoning to make sure another unit can be added legally. If zoning allows it, it can be done, at a cost. These conversions are happening where zoning allows, even where sprinklers are ultimately required people are running the numbers and deciding it is worthwhile...go for it. you can figure it out.

Hi, I did this. I owned a 2-family and added a 3rd apartment into the attic. I had a consulting architect - it cost me about $1,200 - who helped me with code issues related to fire and egress. I drew up all the plans myself. I was required to add exit signs in the shared hallways / stairs, and to add interconnected heat detectors in all units, and to upgrade all smokes in all units to be hardwired, and to create 1-hour fire separations between the three units, which we accomplished by painting the ceilings and walls shared with stairwells/common halls with intumescent paint. We had to provide the building inspector with the (Contego) intumescent paint specifications along with our plan for meeting the spec to achieve the 1-hour fire rating (3 layers as I recall). We had a similar situation to you - good arecttic egress, 2 exits - Not fully compliant as far as width but pretty good. We asked the building inspector to allow/accept the existing non-compliant but pretty good back stairway as an existing condition. He did, though we ended up having to move the door to the new unit to satisfy his safety concerns. My consulting architect found a pathway through the code that allowed us to do all this without installing sprinklers in the building... I don't remember the exact code pathway through which he accomplished this, but I do remember that it was relevant that the stairwells had windows in them... Unless you are already a building code whiz, like you are an architect, I'd definitely recommend getting some help. But, it doesn't hurt to start with a meeting with your building inspector - He may have already encountered something similar in town and has worked through the issues and made some decisions on how they will enforce/interpret the code as it relates to existing conditions....

Yes, @Ryan Jopson, I'd be interested in a tour of Chicopee...I'll contact you in a message. Thanks!

Thanks Sean! I appreciate it!

Hello, I'd love a tour of Holyoke from someone who knows the downtown and its neighborhoods well ... Payment: I'll take you out to lunch and we can talk about real estate (fun!) . Or, a barter? perhaps a second set of eyes on a potential project assessment / assumptions? 

Depends. If the units are nice enough and the location is good, it may not matter. I've had prospective tenants deterred by that, but many don't care that much and are willing to manage. If you don't have enough spots for the number of cars, it's good to give them a spot in the yard or stacked into driveway that they can use during snow emergencies. And/or other instructions on what do when snow emergencies happen.

I'd also add, I think there are some spots in and around Springfield that will be a good bet...