All Forum Posts by: Account Closed

Hi All,

My partners and I have been building new construction condos around Boston since 2015.

We've recently exited a couple of projects and are looking at acquiring both long term rentals and short term rentals.

My father-in-law owns a condo in North Conway, NH in the White Mountains and so I have an affinity for this area and see a lot of potential here despite all the rumblings with regulations.

One of the best ski mountains, Bretton Woods, has very little inventory within a 15-20 minute drive in terms of places to stay other than hotels and lodges. 

There are a few nearby lodges which were built in the 70's - very dated paint / decor inside and outside the building, no modern HVAC, etc. It seems these are now marketed towards the budget friendly crowd. 

One in particular I'm looking at is one contiguous building with a shared lobby and probably around 20 or so "rooms" they rent for about 130-150$ / night depending on the season.

My question is: Does it make any sense to use our construction expertise to go in and do a complete remodel of this building - perhaps knocking down walls to make more "suites" for Air-BNB, putting in kitchens, modern amenities, nice TV / internet, hot tubs, etc? 

I'm thinking of reaching out to some local contractors to get rehab pricing - would modeling the potential post-renovation cash flow be difficult for a unique project like this?

Hi Sergio - My partners and I develop new construction condos in the Boston area mainly but we recently started exploring historic tax credit conversion opportunities. We spent around 6 months doing due diligence on a ~50,000 square foot office building in downtown Lowell. Hired a zoning attorney, historic tax credit consultant, and had 3 different reputable GC companies price the construction budget to do a full-gut reno to turn the top 3 floors into apartment units (not luxury, only home depot quality finishes). The cost to build was so high that even with over a million dollars in tax credit dollars the underwriting was still over a million in the red after stabilization at market rents. Very disappointing to realize this, but at least we didn't go forward with something that would have been a money pit. I fell in love with the idea of revitalizing a very unique building in an up and coming location but at the end of the day the numbers don't lie. Lowell's market rate rent numbers simply don't support a project like this right now unless you get the building for basically nothing upon acquisition.