All Forum Posts by: Evan Cochran

Thanks @Sam Shueh and @Steven Hamilton II,

Do you have any idea what he might've been talking about?  I might've misunderstood him I guess but it seems like very specific piece of info to be completely wrong about.  

Hello!

Quick question regarding depreciation recapture.  I was thinking about selling a two family house I own in Somerville, MA while my 2/5 year owner occupant tax exclusion still applied for half of the house.  I decided not to because I've been depreciating the rental portion of the house since 2011, and my CPA told me that the capital gains I would save would be offset by needing to pay a hefty depreciation recapture tax.  After 8.5 years of owning it, however, he said that I would no longer need to pay a depreciation recapture tax.  

Is that accurate?  I haven't been able to find any info online to verify that, and I recently repeated the 8.5 year rule to an investor client of mine who looked at me like I had two heads.  Any help anyone may have would be greatly appreciated!

Just wondering if anyone has had any experience converting a 2-family in Somerville into condos? I'm meeting with an accountant and and a lawyer over the next couple weeks to make sure I understand all the moving parts, but thought I might as well get as much background info as I could first.

My main questions is how to handle the 1 year notice to tenants-- I've read through the guidelines for condo conversions from the city website, and it seems like you're supposed to give tenants 12 months notice of your intention to convert their apartments into condos. I'm on good terms with both tenants and they're both leaving of their own volition at the end of their leases, so not sure why they would have any say on what I do with the property?  Would the notice requirement still apply if the apartments have been vacant for a couple months while I renovate before applying for the Removal Permit?

Theoretically, couldn't tenants move out at the end of their leases, and then their landlord decide to convert the house into condos?  Would that landlord still need to track down his or her former tenants and give them notice even though they've already moved? 

Any input would be much appreciated, thank you!

Hi @Account Closed...Malden is becoming more in demand every year and has a decent smattering of restaurants and good T access to Boston.  

One thing to expect-- you will probably need to sign a lease to 8/31/17.  Because this is a bad time of the year, most landlords will want to get back onto a more favorable cycle and then renew you for a year after that.  It is more than likely that your rent will go up a bit, but most "mom and pop" landlords won't go up more than $100/mo or so.  Larger companies/landlords are more prone to larger rent hikes as they operate in a more business-like fashion.  They view the situation more like you're getting a discount for 7-8 months due to the time of year, and would expect to go back to market rents as soon as they can.  

So yeah-- definitely doable for $2,300/mo.  Good luck, happy hunting!

Thank you @Enis Shehu!  

I took a look at your website and it looks like you're where I hope to be someday. I especially liked your blog post titled, "Are you tired of getting "I'll buy your house" letters?" It does a good job of summing up my own thoughts about direct mail/wholesaling-- I feel like 95% of my calls I end up recommending the seller to put their house on the market with an agent and get fair market value. It's hard not to advise that when the seller starts the conversation by saying, "I don't need to sell" or "Was thinking about selling and thought I'd see what you could offer." I still have a big cringe-factor throwing out ballpark offers based on 70% ARV minus repairs on those calls, but that's probably for the best I suppose. Beats overpaying I'm sure. Ah well, I guess the key is to keep trying until someone super motivated picks up the phone.

Good luck with your goals and would wager that you'll reach them sooner than 2020!

Hi @Robert P., 

Correct no plowing just the walkways, three steps, and sidewalk.  Thanks for confirming my suspicion.  I found another company that does snow removal for $45/hour with salting included...I feel like that is more reasonable assuming there will be multiple 2-3 inch snowfalls that will take all of 10 mins or so to clear up and wouldn't want to be spending $100 each time.

Hi, I'm looking for a snow removal company to help me out with a house in Somerville as I've recently moved to NH and don't trust the tenants to do a good job.  It's a pretty close-knit street with elderly folks who walk around the neighborhood a lot so don't want to be "that house".  

I've gotten one quote for far for $100 for anything 1"-6" and every inch after that costing an extra $20/inch.  Salt would be extra.  

Does that sound reasonable?  Anyone know anybody less expensive?  It's just 3 steps, 8 ft or so of walkway, and about 40 ft of sidewalk for reference.   

Thanks @Josue Velney... I didn't know how the mention thing worked when I first posted and wanted to make sure I sent everyone mentions that took their time to give advice.  

Hope everyone is finding good fortune with their investments!

Thanks @Dave Visaya!

Hello!

My name is Evan and I've been following BP and listening to podcasts for the last couple months and thought it was time to post an introduction.  I currently manage an apartment rental office in Somerville, MA where I've worked for the last 11 years, and my wife and I own 3 houses.    

2-F in Somerville:  Bought in 2011 as an owner occupant for $345,000 with 10% down.  Recently did a cash-out refinance and pulled $135,000 out of it after having it reappraised at $610,000.  My big mistake was waiting until moved out to refinance.  I ended up at 4.5% fixed 30 year term and know I could've gotten a better rate had I pulled the trigger when I was still using it as my primary residence. Live and learn-- we currently have it rented for $3,400 and cash flow it at $8,400/year.  

2-F in Medford:  Bought in 2013 as an owner occupant for $441,000 with 10% down.  The previous owner had just evicted tenants before listing it for sale, and there was a good amount of deferred maintenance.  We converted it to a rental property the next year after replacing the roof, converting the oil heat system to gas, and updating the electric system to the tune of $38,500 altogether.  We knew it had some problems after doing an inspection, but felt like it was a no-brainer given it's 1.1 mile proximity to Davis Sq and the possibility of the Green Line Extension.  We now collect $4,650 in rents and cash flow it for $18,066/year.

Single-family in Portsmouth: Bought in 2016 as a long-term primary residence for $450,000 with 10% down. I still break into hives when I look at our finances and see that this property is all negative cashflow, but I think we bought right and local comps support a $500,000+ valuation. I know it's not a great investment to move into an expensive primary residence, but my wife and I really love the place. We were lucky enough to have a baby girl in September and would like to stay for the foreseeable future so it takes care of that "where are we going to live" issue. I've been paying down the principal with an extra $200/mo so maybe one day I can use the property for a HELOC at a decent rate. The cash flow from the other two houses basically breaks even with this house minus about $750/mo....not great but not terrible I suppose.

I've backed out of two deals in the last couple years.  One was a 2-F in East Boston near Maverick Sq that needed more work than we could afford, and the other was a single-family in Medford that had some significant structural issues.  After backing out of the single in Medford, the owners dropped it $50,000 the next day.  Thank god for inspections.  

I'm currently trying to find flips or BRRR's closer to where I live now in towns like Dover, Somersworth, Rollingsford, and Rochester. I don't have a ton of capital but feel like I have enough to fund a cash offer, renovation, and carrying costs until I can hopefully sell for a profit. I sent out a direct mail campaign last week and am already getting some calls. No deals yet but I'm excited to keep trying and see what I can dig up. I'm being very conservative with my offers since I'm hoping to avoid hard money lenders on the first try.

I'm interested in wholesaling but would like to get a deal or two of my own done first to make sure I know what I'm doing.  I'm also thinking about selling the house in Somerville to try to get a better return on that equity up here, but would need to wait until the leases expire in June before doing anything.  

That's about it!  I can definitely help with any questions people have about leasing apartments in Somerville, Cambridge, Medford, and Arlington (MA), I've personally rented 1,000+ apartments in those areas as an agent and have a much better handle on that part of real estate than I do on the flipping houses in New Hampshire part.  Don't hesitate to send me a message and I'd be happy to give whatever input I can.  

Hope everyone is doing well and look forward to meeting other BP members!