All Forum Posts by: Eric Donaldson

Thank you Dillon and Tracy, for taking the time. Turns out, after a little back and forth with the town, the town fees for our circumstance are negligible and the re-plumbing is straightforward, and the ROI and peace-of-mind (with a caveat**) will be excellent. My initial understanding of the cost was so high, and to justify it, some forced appreciation (even though we plan to hold this one) seemed necessary in my mind. Now, it's a no-brainer. I also learned that, since they bill the sewer based on the water meter, and we aren't adding bathrooms or kitchens, we won't even have to split the sewer -- figured I'd mention that, may be useful for someone out there.

**I learned that the town will only bill the owner, not the tenant, so no matter how we do it, there will at least be a little management of that utility to make sure the tenant is staying current on that bill. If the tenant doesn't pay, the town can put a lien on the property.

Thanks again,
Eric

We have a slow water leak near the foundation and have decided to run a new line to the duplex from the town valve ~30 feet away. Above and beyond the expected repair cost, we are exploring using this as an opportunity to split the water ($) and sewer ($$$) to the units. We think it will be $5k in connection fees from the town and a few thousand in additional labor. 

We are in the process of normalizing the building and we aren't counting on the cash flow right now, but for reference, the additional costs to separate the sewer and water would likely wipe out 75% of this year's cash flow. We wouldn't plan on current tenants pay the additional utilities until their leases are up in 3 and 6 months respectively.

If this were a larger building where people cared more about cap rates, I can see this as a prudent investment in forcing some appreciation in the building to a potential buyer (maybe less so to an appraiser if we refi at some point). We are planning on holding this one for the foreseeable future. 

Now my question: Am I being short-sited if I don't split the water due to the upfront cost, or should we skip it and focus on marketing the units by clearly communicating those utilities are included?

P.S. Looked for similar topics in the forums and couldn't find anything useful. If I missed the splitting utilities mega-thread, I'd super appreciate being pointed in the right direction!

Thanks all!

Hi Brooke,

To the best of my knowledge, there is no one wholesaling in the Upper Valley market. I would be very intrigued to see how that may go. Please keep in touch if you pursue wholesaling.

The demand is so high, and rent to values are creeping up in many of the areas with great school districts, and thus cash-flow is hard to come by, especially if one wants/needs property management. 

Did anyone catch the BP insights article that listed Essex, VT as one of the best markets to buy real estate in 2020? Thoughts?