All Forum Posts by: Matt Nolan

I have a tough enough time deciding if I’ll rent to someone with a 650 credit score and a cat.  Sex offenders can find somewhere else to live. 

I’ve made plenty of mistakes on my way to where I’m at, statutory rape isn’t one of them. 

Update:

A friend of mine is consulting on a nearly identical project currently. The property is a duplex, located on the adjacent street from my property, and he’s looking to add an in-law/third unit to the basement. He’s an architect/flipper with a lot of experience in the area. If he gets his unit OK’d, he said he’d act as a consultant on my unit. He’d draw up the plans, go through the appropriate avenues for approval, and then I’ll pass it along to my builder.  I’ll update the thread once he hears back regarding his current project. 

Thanks for the thorough reply Dan!

Let me switch gears a bit then and present a different scenario: If adding an additional unit is out of the question/or becomes a prohibitively long and expensive process, how would you move forward and try and build equity/cashflow?

One alternative I’ve considered was converting the basement into 1 or 2 additional bed rooms and turning the half bath into a nice full bath.  This would give me a big equity bump, allow for larger cash flow opportunity (renting a 4 bed/2 bath in place of a 2 bed/1 bath), and I could avoid most of the headache involved with a rezone. 

The basement is accessible from the bottom unit as it is, I would just need to frame and sheetrock the garage access from the basement so it doesn’t abut a bedroom in order to cover my bases (I believe). 

Thanks for the reply Wayne!

I did look into the zoning requirements a bit, which is why I'm somewhat optimistic that I could have the home potentially rezoned.  I meet the ceiling height requirement, the two egress requirement, the lot size requirement, and the parking requirement.  As a result, I thought there would be potential to add an additional legal unit.  The fact that a third meter is present is a plus as well.

While I understand the zoning department is where this opportunity will ultimately thrive/die, I was hoping to connect with a contractor that has experience dealing with zoning changes and permits required in the area.  Often times it's good to "know somebody" in the department.  I'm hoping my odds of a rezone greatly increase if I partner with a contractor that has dealt with powers that be.

I talked to a contractor earlier in the day that advised me to reach out to the zoning commission, but to do my best to avoid stating my specific address as I'd then be "On their radar."  I don't want to kill any potential deal before exploring more options.  I'm really hoping a networking opportunity will open doors that would otherwise be closed to those outside of the inner-circle.

Outside of simply contacting the zoning board, does anyone else have some advice?  I would think there would be a number of GC that have gone through something similar in the past with some success, no?

Hello BP!

I own a number of duplex in and around the Boston area, and I have project in mind for one property that I could use some help with.

The house is a duplex located in the Oak Square part of Brighton.  It's 2 bed/1 bath each, and it's on a 10,000+ square foot lot with parking for 4 cars (two garage, two additional off-street).  In addition to the current apartments, the basement has some great expansion potential.  It has high ceilings, a half bath, and maybe 1,200 square feet of usable space.  The basement has two private egress as well.  It also has a spot for a third meter, though there is not one currently present.  The home is currently zoned for a 2 family.

I'm looking to refinish the basement and create a third (legal) studio apartment.  I have plenty of money to throw at the deal, but am without the know-how.  I understand that it would be a serious undertaking with rezoning, permitting, etc, so I'm in need of some assistance from an investor/contractor familiar with the process in Boston.

I would love to hook up with a contractor that's willing to take on the job and work through the process with me.  I got a great deal on the home as it is, and with an additional unit the cash-flow would be great and the equity would skyrocket.  I would then cash-out refi, and look for the next deal.  I also understand that it might be a case of the city simply saying "no," and 'Id have to consider a plan B.

If anyone has a contractor to recommend, or is a contractor themselves, I'm all ears.  Any and all suggestions are welcome. 

Thanks!

-  Matt Nolan

I've used HELOC's to fund multiple purchases in the past. I use the income generated from the new property to pay it down, and then completely eradicate what's left using a cashout refi on the new property (once I've owned it long enough to do so). Basically the BRRRR method, but using the HELOC to fund the deal.

All good points. In addition to the 650 credit requirement, I require 2x monthly rent as well. I prefer to get a tenant closer to 3x, but 2x is my automatic disqualifier. 

This all builds upon your point of landlord preferences regarding tenant qualifiers. I would think all landlords have a laundry list of applicant benchmarks. For instance, I don’t allow pets in my rentals. 

This thread isn’t about screening procedures, etiquette, or suggestions though. It’s about minimum credit scores. Given the thread-starters location, 650+ is common place and easily achievable. 

You do bring up a fantastic point regarding the honoring of minimums. When I say 650+, I mean 650+. I’m not interested in dealing with a potential legal headache, and I came up with that threshold for a reason.  

I'm well aware that there are many factors that determine an individuals credit score.  I think you took two separate thoughts of mine and combined them to make your point.  Outside of the last sentence of my post, is there anything else you take exception with?  I even went as far as to say I don't care why the credit score is below 650 in the above post.  Credit history, recent credit checks, defaults, debt to income ration, leans, etc.  It doesn't matter which road they took when it leads to the same place....

While I didn't feel it necessary to describe in my initial post, I do take a number of other factors into consideration when screening a tenant.  The 650+ credit score is the very tip of the iceberg in the process.   

I own three duplexes in a similar area to you (two in Watertown and one in Brighton), and my “automatically disqualified” score is 650.  I’ll read all the reports in their entirety, but I generally don’t even entertain things in the 650 range at this point. This area is desirable enough that I can afford to be picky. 

Ultimately, I don’t care what the reason is for poor credit honestly. Choosing to default on loans is a quality that I’m not looking for in a tenant. 

I only invest in state and close by.  I just closed on my third property on Friday, giving me a total of six doors.  I own a duplex on the west side of Watertown, a duplex on the east side of Watertown, and now a duplex in Oak Square in Brighton.  My goal is to add a duplex (or larger) every two years until I'm able to achieve financial freedom.