All Forum Posts by: Jason Turgeon

I'm with @Joe Splitrock. I vastly prefer to stay in hotels, but when I'm traveling with my family I need to be able to put the kid to bed in his own room and hang out in another room without disturbing him after bedtime. Kids also mean stuff, which means that parking close to the front door and not paying to park are important on family trips. 

For now, we stay in AirBnbs when we travel, but I hate the whole AirBnb experience of browsing hundreds of listings, having maintenance issues, having to guess if the location is good, and knowing that I am likely displacing a local family (airbnbs are ruining the neighborhood I live in, so I am sensitive to this). I also hate that I have to pay for AirBnbs with money but I can almost always pay for my Marriott or Hyatt rooms using points. This is a very smart move by Marriott.

Will it impact people in our profession who are taking what used to be housing and turning those units into hotels? Possibly. The biggest impact will likely be that cities and towns that were cautious about regulating airbnbs will have more ammunition to do so if Marriott or other big chains get into the game. 

There are different ways to be green. My neighborhood in Boston was designated as a test neighborhood for passive-house/zero-energy designs a few years ago. There were a few vacant city-owned lots that the city elected to sell only to developers who built to this standard. Seems like it worked, because now we have about 30-40 units of passive housing (generates as much energy as it uses, super-insulated, etc., etc.) in the neighborhood, about half built by a local firm that builds nothing but passive houses. Note that most of these homes have anything to do with LEED, but if they did they would all likely be LEED Platinum.

I've been watching the progress and all of these houses sell (except for one developer who went nuts on both design and pricing, but that's a different story). Generally they are priced a little high and they tend not to move as fast as other properties but they aren't getting hit too hard with price reductions, they just have longer carrying times. Almost none of them have come back on the market so there's no real info on resale values. Granted, we haven't gone through a down cycle since they started this, but I expect that if there is another downturn these houses may have a small advantage in a crowded market.

I've been inside some of these units and besides the green features, they are very comfortable - lots of insulation means the temp doesn't swing up and down. They are also almost silent inside (again, lots of insulation), with no noise from outside or from other units and no noise from HVAC. And because they have dispensed with HVAC (some will have a single ductless mini-split), there is more usable floor and wall space - no vents, no radiators, no baseboards. Also, these are all-electric homes with no gas lines. Given the recent explosions north of town and the huge number of leaks our old neighborhoods deal with (gas company is always out ripping up the street), many people are beginning to question the safety and efficiency of gas. These are all selling points if you choose to market them correctly. 

Check out some of the homes:

https://www.placetailor.com/

http://www.epositiveboston.org/

http://www.sebastianmariscal.com/notabuildingapark

http://www.epositiveboston.org/marcella-street/

I'm looking at a property in Berlin, NH. It's mixed-use, 36k sf total. There are several rentable garage bays (about 50% rented), a storefront (vacant), and one finished 2-bedroom apartment (currently rented). Upstairs are two floors ready to convert to apartments.

The current owner claims to have $600k in work into it in the last 10 years. It has a new roof, new windows, new sprinkler system, newer garage doors on the bays, and newer electrical service and panels. He's already gutted out the top 2 floors, which look like this:

Current owner had planned to put 7 units in the top 2 floors.  Assuming he was on the right track (questionable), I need to figure out what it would cost to do that.

With a shell like this, what are some rough ballpark numbers to build it out to a apartments? I have seen estimates for new construction of $125-$200/sf, but that includes the actual structure, which I already have. Could I do a build-out of the gutted space for $60/sf? $100? Thinking of keeping it loft-style, big open spaces except for bedrooms and baths, trendy but low-cost finishes, hopefully 2 beds/1 bath per unit. Minimalist kitchens along one wall with an island to separate the kitchen from the living area. 

I believe there is probably something like 7000 sf to build out. I just need to have some rough idea of how much it will cost to convert that to rentable space so that when I go to interview architects and GCs I am not caught completely off guard. 

@Jeff Morelock, that's the thing that I am trying to figure out if I can avoid. I don't want to be in the health care business, but I am OK with partnering with someone who is. 

How were you able to get it so far under market?

Thanks all,

@Shane H., I'm with you on people needing a community.  My mom is definitely doing much better now that she's in a place with other people around, and it helps that she doesn't have to shovel snow or worry about home maintenance anymore. But her senior apartment complex doesn't offer any assistance if she gets to the point where she needs it.

@Ikaika, can you post more about Residential Assisted Living for others to learn from? I would like to know more.

My wife and I have aging parents, so this is something that's been on our minds anyway. Now this article in today's Boston Globe discusses the huge need for affordable housing with resources for some sort of assisted living and it has me thinking. 

The wealthiest of seniors are well taken care of by the private sector in nursing homes and lesser forms of assisted living situations that start at $5000 per month and can rapidly escalate. I have a friend whose uncle is paying nearly $11k a month to a private nursing home. And the poorest seniors qualify for subsidized nursing homes.

But what about the middle income seniors? The "retired teachers, trade union members, first responders, [and] government workers" listed in the article?

Per the article, "the study projects that by 2029 about 14.4 million middle-income seniors — nearly double today’s number — will lack the financial resources for housing and personal care assistance.... [there needs to be] a national push to accelerate construction of assisted living units for middle-income residents...and spark new payment models for middle-income assisted living."

Obviously this will be a partnership enterprise. We here on these forums are interested in real estate, not providing nursing care services. But with the right strategies and partners, there could be a way to do some real good and capitalize on a huge market of underserved people.

What are some strategies you all have seen that work for middle-income senior housing? What new things could/should we (as real estate investors) try? What about these "new payment models?" How could partnerships with care providers be structured to benefit everyone?

Are you talking about selling the 3F and doing one or the other? Or keeping the 3F as a rental?

If you are keeping the 3F and can afford to build your dream house and still have the 3 units as rental income, there is no shame in doing that. It is not the fastest path to complete financial freedom, but it gives you immediate gratification and as you said it gives you the opportunity to tap into equity down the line. 

From a pure financial standpoint, you are definitely better off not building a single family dream home right now, but there is more to life than just money. It really is a question of how many more years you want to scrimp and save before enjoying some of the fruits of your labor, and only you can answer that.

Browsing Craigslist real estate ads, I found something interesting in a small town in NH about 3 hours north of me here in Boston. I have family nearby and know the area pretty well. It's an economically depressed town that has seen some really hard times. It has had a little bit of stabilization the last few years (I wouldn't call it a comeback, but the downward slide seems to have stopped). About a dozen rental units on the market on Craigslist and a couple of local property management companies to use. 1 beds are $550/month with heat included, 2 beds range from $625-850 (some listed at $1000 furnished), 3 beds about $800, one larger management company that lists about 75 units on its website only has 1 vacancy currently. 

I'm looking at selling a 2-unit rental I've had for about 10 years and doing a 1031. I will have about $200-$300k in cash and will need a property worth at least $325k. What I've found is a 36,000 sf mixed-use property, all-brick, built 1914. 7 huge garage bays in 2 separate wings of the building, a storefront that needs serious work, one finished 2-bedroom apartment, and 2 upper floors that are completely gutted and ready to build out. 6 electric meters in the photo, likely shared oil heat for the whole place, all new windows, new roof, new sprinklers, masonry looks OK from pics and street view. 

Asking price is $259k and it comes with a fair amount of garage equipment and tools that are of interest to me, plus the furniture in the 2-bed unit. And the owner is willing to finance 10 years at 6% with $100k down. It's in a mostly residential neighborhood with a few businesses and non-profits nearby and about a 5-minute walk to the small downtown area.

It's a cool old building. I am guessing I could make some big open-concept artist loft spaces on the upper 2 floors with exposed brick, etc., and get $800-$1000 per unit x 4-5 units. Nice thing about lofts is they don't cost a ton to build out. There's also a serious lack of airbnb in this area and I would want to keep one unit for myself for visits to family and try the airbnb market out with that unit when we aren't using it. Garages are a total guess but they're huge spaces and somebody must want them for a reasonable rent.

I've asked for more info. Am I completely insane? This would be a huge step up for me (going from 3 self-managed units in walking distance to this beast 3+ hours away). What are the big red flags I should be looking for?  How do I even begin to go about estimating costs to build out something like this? 

https://www.maxrealestateexposure.com/legal-requirement-for-bedroom/