All Forum Posts by: Eric Army

Hi @Claudio Golia!

I love the white mountains! I invest in small multi s in ri, and I spent some time researching doing vacation rentals in nh. I'd love to hear what you're thinking for strategy- I spent some decent time doing due diligence, so I can share anything that might be pertinent.

hi-

Short answer: around $30 per unit/mo for sewer, $15-20 per unit for water (for 2 & 3 fams)

Longer answer:

The charge for water is based on how many ccf (hundred cubic feet) of water you use (100 ccf = 700ish gallons of water. )

Sewer is based on an annual meter charge, prorated monthly, plus how much water you used.

I (accidentally) found myself looking at some multis in northern nh ($100k for a 4-unit!), and initially they looked pretty promising. The big kicker was heating- unlike my market, most of these multis were on oil, with a single heating system for the building (ie landlord pays). One particular property grossed 32k per year, but 16k went to oil (never mind any other expenses)! I'm used to my tenants paying for thier own heat!

@Justin Repp brings up a great point- a few of these deals looked killer, and allegedly had good rental history. But you're essentially betting on the local job market when you buy there-- for me that's a big unknown in these more rural areas. My local market has a few colleges who help drive demand, which is a stabilizing factor.

Hi Brandon- nice work. I think I had looked at this property at one point (right off 95 in pawtucket, yes?) maybe 2012. Later we drove by and saw the fire damage, and we're glad that didn't happen to us. I'm glad someone did something nice with the place. 

When I had looked up the lot next door, it was owned by a small gc who has bid on a garage I designed for a buddy in oak hill. 

Gotta say- I love the small town vibe this state has!

The most stringent rule wins, whether it's federal, state or local!

Diversification is the way to lower risk.  You'll notice that full-time "Investors" often end up creating a service business that they originally provide for themselves, but end up taking on clients as they grow their holdings into a business with systems and staff. (I've seen this with property management and construction management for example.) 

I would highly encourage you to get your license ASAP. You do sound pretty motivated, but I've seen too many people that are close to licensure and suddenly have a job or life change, and that process gets back-burnered. You are totally right- it won't make a huge difference to your life now, but in 5 or 10 years it could open you up to business opportunities you'd kick yourself if you miss. There's nothing worse than having someone offer you a dream project and not being able to capitalize on it! 
Best of luck!

Hi! Best of luck! I'm an architect / rs investor on the opposite coast, and it's been a cool ride.

I have my own practice, and I've leveraged my design profits into downpayments. I've found many of my best contractors through my architecture clients. And I've found clients take my advice on thier designs more seriously when I can talk finance & roi from experience.

One opportunity you'll find is that in meeting other investors/developers/contractors people always need plans drawn, which could help generate cash-flow at a different rate (or schedule) than your flips. Are you licensed?

I've also had investors who "don't need an architect" until I walk through thier space, and give them a little 5 minute sketch of how they could reconfigure thier idea to be so much simpler & higher quality.

Hi- I just received my first commercial term sheet. 
I'm looking at a commercial property (small mill building for my architecture office) with an asking price of $135k, needing about $100k in rehab. 
I am used to residential mortgages (i.e., for multi-family property) and there are a number of "terms" to the term-sheet that seem onerous. Any suggestions on which are common & which could use some push-back?
[This would be an SBA 504 loan (50% from the bank, 40% from an SBA-CDC, 10% down), and the bank is evaluating my business's ability to generate cash flow to pay for it (not the property's ability to generate cash-flow).]

-Prepayment penalty for first 5 years (5% of principal balance in year one down to 1% in year 5)
-Checking account with bank offering note, avg daily balance of $10k
-Annual review of my Global Debt Service Coverage (GDSC) & Standalone debt-service
-Rates are around 5.5% (FHLB +3.5), readjusting every 4yrs

The GDSC seems to state that if my income drops, they could call the note, which doesn't seem very sporting of them. (I've got a question into the lender on this, of course.)
(And yes, I am soliciting proposals from multiple local lenders.)

Thanks!

Hi!

If you have / are working with someone that has CAD drafting capabilities & knows the ins & outs of AutoCAD (the industry standard) but don't want/need to take on the $350/yr license for AutoCAD LT, you could use "Draftsight", which is a free auto-cad clone. It's somewhat buggy, but it gets the job done if you're not a 40hr/wk user. 
http://www.3ds.com/products-services/draftsight-ca...

If you are somewhat computer-savvy and want something that can help you visualize an addition / removing a wall / etc. Sketchup is a great way to mock up things in 3d. Power users can do renderings or even construction documents in Sketchup. (But it's not super-user-friendly for those aspects-- if you've never done CDs, there's better places to start.) This also has a high-functioning free version. 
http://www.sketchup.com/download

If you want something that will "kinda draw it for you" (i.e., you select a door or window and drop it into your plan)... I don't know! Sound like @Matthew Denney found a reasonable option. 

I've taught Revit (a Building Information Modeling / drafting / 3d drawing program), and to do anything intelligent in this (without a drafting background) is going to have a decent learning curve (and it's expensive).

Hi- your home inspection list doesn't look that bad, honestly. Most of these usually show up on my inspections, and don't raise my heart rate anymore. Many can be addressed on your time-table-- some are typical conditions that aren't great, (and you wouldn't do this if building new) but may not need to be addressed while you own. I'd put these in 3 categories: now, within a year & if/when it's a problem. 1. Items I'd try to resolve up front: -the sewer leak & moldy floor 2. Sounds bad, but may not be a big deal: (1yr) -masonry cracks- through the brick, or just the mortar joints? Repointing is usually the solution. Often times this is more important for water-proofing than structural. -flashing- I'd put this and repointing on your 1yr time-line -termite- does it seem to be active? 3. Very common deficiencies. May have some potential exposure for liability, but any similar property someone lives in may have this scenario: -lead main water pipe- in my area, this is very common for older urban buildings. Ie . Has the street main been converted from lead? -asbestos. Also very common (here). Is it friable (ie loose & deteriorating)? I've often seen this encased, rather than removed. Everything from duct-tape to boat-wrap. I have to remember that the inspector works for me- if he can give me negotiating chips, great. If he can educate me about maintainance issues, great. If he finds problems that don't need fixing, duly noted. (Some issues you cite may be bigger deals! Just speaking from my experience.)