All Forum Posts by: Matthew Dennehy

Hi Michelle,

Welcome!  Sounds like you got a lot of experience from your last investment. NH is definitely a great place to invest with plenty of opportunity to get a great deal, if you know what to look for. Make sure to get an agent that knows what to look for in a property, and you’re on the right track with thinking about a property manager!

I always tell new investors, if you're looking for a job, you can get a free one at McDonalds.  If you want an investment, plan to pay a property manager (which could be you if you self manage).

Based on the limited info you provided, I'm guessing Franklin.  I don't have a huge presence in that market right now, but just from looking at the property (that I guessed to be the one you viewed), I'd say 1295 is very generous.  Have your agent help you with a rental market analysis, but you might be way off.

Also, it was previously listed as entry-only and didn't sell.  Looks like it has been on for 90 days.  I'm guessing that given the time on the market, and given the season, that Kathryn, the owner, will be more willing to work something out.  Also, considering she bought the place for 50k in 2013 and no one has registered a mortgage since then, I'm guessing there's lots of equity to play with.

Anyway, hopefully I guessed the right property.  If so, talk to your agent about options that actually work with the numbers.  And don't forget to thoroughly check out the area.  I personally wouldn't classify Franklin as "up and coming", but there are still people that live there, so you might find a good investment.  If you do proceed, budget more than you think for management and renovations, because you might need it.  And watch for drugs with any new tenants.  Good luck!

Hi Jarrod, welcome!  You have certainly come to the right place for answers. 

Hopefully you have picked a great agent that works with investors and multi family properties on a regular basis. If so, they should be a great wealth of information. 

Basically when I go see a property, or take clients to see a property, I first and foremost do my preliminary due diligence to make sure the numbers will work at the price I anticipate paying (either close to list price or at a reasonably reduced rate depending on listing age and expected competition).  If the numbers work, I go through the images and property disclosures to get a sense of the condition of the property and whether any sort of capital will be needed for deferred maintenance, rehabs, and or etc.  This is all prior to going to see the property. 

If all that checks out, I schedule the appointment. At the showing, I’m mostly only concerned with verifying my expectations, and making sure the layout will work for my expected rent goals.  A lot of properties are sold with under market rent, so that’s a great value add if you know what to look for. Also, with a lot of older properties in NH, you want to verify there isn’t any functional obsolescence. 

If everything is good with the showing, make the offer. Make it contingent on whatever documents you need for verification. Typically though, your building inspection is a great asset and will provide what you need as far as property condition info.   I’m never overly concerned with getting info out of the current owner or tenants. They seem to never provide satisfactory answers, so I only go to them if their is a specific question that isn’t answered elsewhere. 

Hopefully that summary helps. Again, you should have an agent that is able to explain this to you in detail and walk you through the process. 

Good luck!

Hi Nicholas,

Welcome!  You've certainly come to the right place to start off your journey with real estate.  What is it that you're planning on buying to start house hacking?  A duplex?  There are still some great deals out there.  Are you looking in Manchester or some of the surrounding towns as well?

Kayla, don’t worry about Concord tenants being “worse” tenants. I have for the most part never really had any significant issues with my Concord tenants. They a great people and pay their rent on time!

1900/mo seems okay for rent, In the acceptable range, I just wouldn’t be able to give you a really accurate answer without doing a rent market analysis for your specific property. 

Hopefully this helps you with your decision, feel free to reach out if you have any other questions. 

Kayla, congrats on the new house!  Concord is a great area.

That being said, it’s extremely difficult to turn a profit on single family houses in NH. The people that typically rent out singles families typically either lived in the property, inherited the property, or otherwise acquired it without originally intending to rent it. Renting a single family is a way to hang onto the property for a while until they eventually sell. Typically the numbers work out to just about break even, and that’s if you self manage.

I don’t want to discourage you in any way from investing, but your agent is trying to sell you snake oil if he/she says it will make a good “investment”. 

The best way to make this work from an investment perspective is to move-in and “house hack” by renting out a room. You’ll substantially reduce your payment liability that way, and be able to enjoy the extra savings while building equity.  Then when you have some decent savings again, buy a 2-3 family. There are a lot of them in Concord. 

Finally, if you do decide to rent it out, make the tenants pay the water. Most landlords over that in Concord because of how the city meters are installed. However, with a single family, you can easily have them cover that expense, paid directly to the city. 

Hi Blaise, welcome!  New Hampshire is a great market to be in.  there is plenty of opportunity for great, cash flowing properties. Portsmith itself is a very hot area, and there are also plenty of other surrounding areas where you can find great deals. 

Dover, Rochester, and Somersworth Will get you the most property for the cost. Anywhere else just outside of Portsmouth will have opportunity, and is especially nice if you want to owner occupy, but you will have to search a little bit harder to find it truly great deal. 

@Account Closed it depends on the property and price.  You will probably want to steer clear of the pristine turnkey properties, as those will command a premium.  On the other hand, a full gut rehab will be a can of worms and you will want a very good plan and some strong cash reserves to fall back on.  Typically you will get some great deals somewhere in the middle.  Often simple deferred maintenance projects and under market rents will offer enough value add to get a great, cash flowing property.

Ultimately, it comes down to the price, including rehab costs and time, balanced by the rental income the property can command.  Start by following your market, some properties you find interesting, and you will be able to get a sense of what makes a good deal when you see one.  Also check out some of the BP calculators as they are very thorough and can give you a great idea of value.

Zillow will show you what is currently listed, which is fine.  You will definitely want to find a good agent who can assist you with property research as well as guide you through your first purchase.  There's so much more info that you can dig up about properties from public records including ownership, mortgage history and more.  This can help identify the best properties and a great agent will be able to provide all this info and help interpret it.

Other than that, you can look for off market deals. These can be a great value, but they typically require something extra. Most often this means fixing the property up or rehabbing it, but not always. This can limit your ability to use an FHA loan as the requirements for this program are fairly strict. There are other options, they are just a little more complex.

Depending on how much research you have done and how comfortable you are with real estate investing already, it's often easiest to buy a duplex the traditional route first, with a great realtor and a listed property.  This will get you started as quickly as possible so you can get the real hands on experience.  Then once you've got some first hand knowledge about investing, it makes it much easier to get into your second property, and into more complex properties as well.  

Yes, owner occupying, or house hacking as it's called here, is a fantastic way to get started. You can buy a property that you will occupy with a low downpayment loan (FHA for 3.5%), but you also get huge savings and benefits, such as being able to write off portions of your maintenance bills. The biggest benefit you will get from house hacking is being able to save what you formerly spent on housing and apply that savings to your next property.

Once you start owning property, the additional income can be used to help qualify you for future properties, so it starts to snowball.  I always recommend new investors start by house hacking because it is truly the easiest way to get your foot in the door.