All Forum Posts by: Hunter Vigneault

In my opinion, that is not going to be worth the trouble for you. It's a big price point per apartment and a big price point per foot for the dirt.

Good area and good schools, but too high a cost. Don't think it would make sense for a single investor, let alone splitting profits with a promote, etc.

It will vary by location and asset type, though it is increasingly common to have the tenants pay for water separately. It is usually difficult and expensive to physically separate meters/plumbing on existing older properties, but is the best way to do it. Some landlords will take the bill and divide it based on bedrooms (as a proxy for people in a unit) or by square footage, but you need to be familiar with the law in your specific area because this may not be allowed at all or may only have limited ways to charge back legally.

As an agent, it really depends what you are doing. Of course, the agent will prefer that you work with them exclusively, but for commercial or larger scale multifamily investments I would say it is not the norm to be locked into a buyers rep agreement with one agent. It will depend on the broker, but you may sign deal specific exclusives (they brought you a deal and they are your agent on that deal).

If you are primarily looking at deals on the MLS, then you should probably just pick one and go with it - even if you don't sign a rep agreement. If you are clear with the agents what you are looking for (and they are any good), they'll both just keep sending you the same deals when they hit the market.

Depends what your longer term goal is - it sounds like your plan is to hold this for a long time, so I would normally skew to the 30 year route. You can make additional payments if you want, but you have the added flexibility to make just the scheduled payments and know what those payments will be for the life of the investment. Rates are likely only going to go up over a longer time horizon like that, so it's not a bad idea to lock in. I have no idea what they will do over 5 years or so, but 10+ years is a long enough horizon that rates higher than now are likely (of course, 10 years ago I'd have said the same thing and here we are...).

From your post, it sounds like you prefer to own this free and clear and want to actively make payments on it. Saving interest is good - there are tax "benefits" of interest, but only because it is actually money you are paying out. It is not a paper loss benefit like depreciation. If your plan is to actively pay it down as quickly as possible and your income is generally secure at the current (or certainly your projected) levels then I'd say go with the less expensive ARM.

I'm surprised the condo board/office isn't more proactive on this issue. Bats can create a much bigger issue. I know someone who purchased a large multifamily complex and one of the buildings had a long standing bat infestation. Apparently the guano can eat through wiring, which caused that building to lose its grandfathering - had to be brought up to current code.

Thankfully I've not had that specific issue myself - I'd push the board to come up with a solution because it's probably not just your unit (or it won't be). If they won't act, then I'd have a couple of pest companies look at it. Their experience will probably be better than my trial and error with whatever solution(s) I can implement myself.

I would highly recommend looking into purchasing a 1-4 family property using first time home buyer programs that your state may offer (or an FHA type loan if your state does not offer or you do not qualify for one of their programs). You can get a great rate with a low down payment and properties that currently or potentially provide you with cash flow and appreciation.

My wife and I were both able to take advantage of programs in a relatively expensive area of Connecticut. I did it personally with an FHA 203k loan on a duplex (it needed a lot of work) where I only had to put down 3.5% of the acquisition and repairs. A few years later, and before we got married and she potentially lost her ability to qualify for first time buyer programs, my wife used a CHFA loan to purchase a single family home in the same area with a 5% down payment. We honestly thought we were going to be there for 10+ years, but we still ran the numbers as a rental before we bought it. Life has a way of throwing things at you and we had to relocate for a job opportunity just over a year later. Because we had considered a backup plan, we were able to keep the house as a rental. Yes, we needed to pay PMI on both - but they both burned off within two years after reappraisals and the cash flow got stronger.

The cash flow and equity from those two houses allowed us to actually make the forward progress on our investment goals that we likely never would have accomplished without them.

Also, it sounds like you may have left your job already - but if not and you want to buy your own 1-4 family, do it now. You can do well as an agent, but it can take a while - and banks don't like to give solid credit for 1099 work without a long history of repeatable income.

TLDR - as long as you buy it right and have done some planning, there is no reason your house needs to be the location anchor so many people think it is.

It's outside my areas of experience, so I'll let someone from Massachusetts take it. If it is a new build, you can look into adding individual meters and hot water heaters to the units. Will be an added expense (how much of one will depend on your local utility), but could pay off in the long run. You'd need to weigh it against the average expected cost - which you are already looking into - along with the area norms.

The Airbnb option better have a significantly higher return to make up for the added wear and tear and management intensity.

I get the spirit of the questioning, but a $300k house and two $150k houses will likely be very different to operate even though they fall in the same general strategy. I think long term rentals and STRs are too different to say "all else being equal."

@Robert Coulstring You'll have to provide location, age of the building, and number of bedrooms to get a decent answer, but even then there can be significant fluctuation. Are you trying to model something generally or gut check a specific investment's given numbers?

There are a number of online tools that will let you create generic documents and then print and send them to states for filing, but LLC formation is something that I think is best left to a professional. You'll likely get a number of DIY proponents, and that's fine.

I assume you are intending to use it for asset protection/liability purposes and a poorly organized/written document may not help you with either. It will generally (you can call around) cost you a few hundred dollars more to have a professional draft a basic agreement than to use an online automated service.

Additionally, some states have multiple types of LLCs - I don't know about VA or GA - and a professional should be able to talk you through which is right for you.