All Forum Posts by: James Lapp

it was an owner occupy loan

I don’t know CT laws specifically, but in RI where I bought a property with below market rents, I raised rents immediately upon purchase (30 days notice required for month to month tenants). I did not raise them to full market  but about 80% of market (they were about half of market when I bought). Put yourself in position of the tenant - unless they can find another below market unit or go live with someone else, they are better off accepting rent increase  than seeking another apartment. I also offered two options - a annual lease and a monthly lease (monthly at higher rate). Of course you have to be mindful of non payment risk particularly considering eviction limitations. 

@Jaysen Medhurst good tip. To expand on that, I used a 10% down conventional loan for a quad, with no PMI or extra closing costs like FHA. Exempt from personal income requirements because the property was in a moderate income census area, which New London has a lot of. A couple of banks have similar programs. Worth looking into @Rason Lockhart

Welcome! We have bimonthly meet-ups now via Zoom. @Mat O'Grady is the host and can get you on the invite. 

Hi everyone - new to area and recently purchased a four unit multifamily in West Warwick.

I have two renters moving out, one in August and one in September, and am in need of a handyman to do minor renovations. The units are already in decent shape but need a bunch of smaller miscellaneous items done. I don't have the time or tools to do it. Jobs are not big enough to attract a general contractor (install vinyl flooring, new baseboard coverings, new backsplash, new stepsguards / carpet tile in common area, etc.).

Does anyone know a good handyman who could do this and what I should expect to pay hourly in RI? One unit is a 1 bedroom, 380 sq ft and the other is a 2 bed, 800 sq ft. 

@Jaysen Medhurst

1. I thought the $1,121 water/sewer number from the owner was really low for an 8-unit building and thought it reflected the fact the property wasn't fully rented. Based on the landlord tax filings the listing agent gave me, it averaged $2,172 between 2015 and 2018, presumably when the property had more tenants. 

2. PM= Property Management? I think I have PM at 8% of vacancy adjusted rent roll.

3. Good point. I should adjust my model. I built it for 3/4 families, not commercial. For those properties, I usually assume 0% appreciation depending on area. But you're right -> higher income should increase value. 

Did the "common area maintenance" (mine is average of this number from 2015-2018 owner records) seem high to you? I was being conservative so estimated capex reserve separately but I assume a lot of outlays in that category are double counted in what I would consider capex reserve. 

Here were the numbers I ran based on the asking price. Similar to Jaysen's above. 

@Jaysen Medhurst - thanks for sharing. I need to move a few updates to my model since I wasn't considering a few things..

Thank you, both!

@Mat O'Grady - thanks for the input and yes, would love to join the Zoom meetup. I shot you my email in a DM. Really appreciate it!

@Jaysen Medhurst - got it, very helpful info. Yea, the listing agent mentioned they had other offers when I looked at it on Saturday. It looked like a promising property but since I'm new here, I wanted to do some more due diligence on the area before diving into my first deal. I was a little taken back by the vacancy (based on Statute 12-63c filings, it was 20-30% vacant the previous four years), which was why I was asking about vacancy above. Could just be lack of management.

On the underwriting front, my rent estimates for multfamilies based on Zillow/FB/Craigslist/HUD excluding heat and depending on B or C class are:

1 bed - $725-$900

2 bed – $900-$1,050

3 bed - $1,100-$1,350

Does that align with what you see?

have always had a soft spot for NL (and SE CT in general). I used to live on Long Island but commuted to Boston for work, so I would take the Orient ferry every week. Often would drive around the city or area if I had free time before the boat; sure it's got bad parts but I see a lot of potential. I'm excited to be here now and look forward to getting to know you all!

I'm new to the southeast CT and am looking to purchase multifamily properties in New London area. 

I'm trying to get a sense of (1) vacancy rates and (2) what I can expect as a tenant base.  

For example, I looked at this 8 unit property last week: https://www.zillow.com/homes/79-garfield-new-london-ct_rb/2079955341_zpid/. While clean, the units are very basic, and I can't imagine anyone from the major employers (Electric Boat, Lawrence & Memorial, etc.) renting in a 5+ house in that area of NL. Seems like they have better options. Am I wrong here? Would a property such as this be targeting mostly Section 8? They were renting at ~700-750 including heat. 

What also surprised me was how vacant a lot of the 5+ properties on the market are. Anyone have data / perspective on vacancy rates in New London?

Ultimately I'm trying to find the "sweet" spot for outsize returns in the New London market is in terms of # beds, neighborhood, tenant base, etc.? All opinions welcome!