All Forum Posts by: Matt Herbert

Hey Michael,

I'm also from New Hampshire, and I'm glad to hear that you're getting started in real estate investing. It's a great way to build wealth, but it's important to be conservative when you're first starting out.

Murphy's Law is definitely in effect when it comes to real estate. Things will go wrong, so it's important to have a cash reserve to cover unexpected expenses. I personally take 20% off the top of gross rents for all of the above (capex, maintenance, and vacancy). I think 25% is okay too, or something between the two numbers.

As you get more properties, you can adjust downward. If you continue to grow, you will reach a point where you can save less than 20%, because your cash flow will likely be high enough to cover unexpected things.

+1 to what @Patrick McCann said - New Hampshire has a bunch of solid markets for real estate investing. Consider checking out the Lumberjack Landlord on YouTube - he's a very successful real estate investor from the seacoast area in NH, with lots of great tips.

Here are a few other tips for new investors:

• - Do your research. Before you buy any property, make sure you understand the market and the specific property you're interested in.
• - Be patient. It takes time to build a successful real estate portfolio. Don't expect to get rich quick.
• - If/when you invest locally, consider doing some of the work yourself. If you're handy and have the time, you can save a lot of money by doing some of the repairs and maintenance yourself. This is especially true for small things like painting, fixing leaky faucets, and mowing the lawn. (Just make sure you learn to hire things out as you grow - your time will become more valuable!)

I wish you the best of luck in your real estate investing!

-Matt

Hi Joia - I'd say welcome, but it looks like you've been here as long as me.  Great to see another investor in my neighborhood (I'm in Gilford/Laconia area).

Good idea getting your Real Estate license (though it's a tough business right now) - there is so much synergy that can happen when you are the agent buying (or selling) an investment property. Using your commission as a bargaining chip is just one great example. Also, that should qualify you as a Real Estate Professional which comes along with some special tax benefits for investors.

My wife is also a Real Estate agent, and it helped us secure 4 deals in 2021 (2 off market). We are always open to creative ideas, creative financing, and partnering. We should connect IRL some time - it's always fun to chat about this stuff with like-minded people.

As for figuring out FI numbers, that is actually harder than it should be. When we bought our first property in 2013, we naively thought we would need about 10 doors to be able to retire. Well, we've got more than that now, but we aren't FI yet. Sometimes it feels like the goal-posts keep moving on us (inflation!).

Best of luck on your journey!

@Paul Eddy, I'm not a lender, but I don't think that would necessarily help - and could even hurt. You would just be trading one debt for another.

It depends largely on the monthly payment. If the cash-out refi payment is significantly lower, then it may help. However, when they calculate the payment on Credit Card debt, they use the minimum payment (typically CC companies charge between 1% and 3% of your balance as a minimum payment). So, often, CC minimum payments are very low (intentionally to keep you in debt longer, and make the company more money). Thus your cash-out refi may actually have a higher monthly payment, which could hurt you.

Also, are the lenders counting any of your Rental Income? Different lenders have different rules on that, so you may want to shop around and see if you can get a more investor friendly lender.

Hello @Reese Chappuis, and welcome to bigger pockets!

Real Estate investing is a hyper-local skill. Things will vary pretty widely from one end of NH to the other. However, NH is a decent locale for REI, as it has relatively friendly landlord laws.

I invest in the Lakes Region of NH, and would be happy to help if you have any specific questions. I'd also recommend the "Lumberjack Landlord" on YoutTube, who is a Real Estate Investor on the Seacoast of NH. His videos have some great information (much of it relevant to NH). Every Sunday he has a live stream where he answers any and all questions.

Good luck on your journey!

-Matt

Hey Eugene,

In NH, the way Tax Liens are handled will vary from town to town. I purchased a vacant lot in a NH town at a tax auction in 2019.

In that town the clock starts when they send out the first tax bill for the current year (in this case May). If the owner has not paid taxes by the following years tax cycle (again May in this case), then they give the owner 2 years and a day to pay the back taxes (all the while assessing penalties and fees). If after this period is up, there has been no attempt to pay, and no communication, then the town will simply take the property.

In that particular town, they usually wait till they have at least a couple of properties and then do a public auction (once a year, always in September).

My understanding is that the former owner has 3 years from the date the Town records the quit-claim deed to come back to the town and reclaim the property (by paying all back taxes, fees, penalties etc). After that 3 year period the former owner looses all rights to the property. I'm not sure what happens if the property was sold at auction before that 3 year period ends, and the owner comes back to take the property?

It's also worth noting that there is a 10 year "quite" period from the date the quit-claim deed is recorded, in which you cannot re-sell the property with a warranty deed (but you can resell with another quit-claim deed).

This particular town also does not sell tax liens to the public. They try their best to work with the owner, but if that fails, then they only ever take ownership of the property to sell at public auction.

In your case, I would reach out to the Town Administrator and ask them how tax liens are handled in that town.

HI @Ashley Kirby, it's going to depend on the town. Most towns will require permits for that type of work - which will most likely include at least plumbing and insulation. You can often find an email for your local building inspector on your towns website ... shoot them an email and you can have a definitive answer.

@Suzette Rovelsky you should absolutely get an insurance agent involved before closing. If you are financing, the bank will require an insurance binder before you can close the loan. If you are cash, you will still want to know your expenses.

I've heard through the grapevine that insurance companies may soon start charging extra for houses that do not have grounded outlets. That can be a rather expensive upgrade! Something to keep in mind when looking at older investment properties.

@Suzette Rovelsky, we found out about the broken curb stop because the house had no water (the water meter was completely removed). As part of our due-diligence, we called the water company and asked what we need to do to turn get it turned on. That's when they informed us about the broken curb-stop. The seller knew about it, but did not disclose it (shame on them). This gave us the upper hand, and they agreed to pay for half of the repairs.

Hi @Suzette Rovelsky, I have a mixed selection of single and multi's in my portfolio, all based in central NH. The insurance cost varies greatly ... from $250 for a small condo, to $2,500 for a 3-family. 

Get a good insurance broker. I can't stress that enough ... if you are dealing with a crappy broker, you are likely to get a crappy product. I literally saved thousands when I switched brokers two years ago. I stupidly believed that my loyalty to my broker was gaining me favor. After shopping around, I found out that another broker who was hungry for the business was able to get me better coverage for less money ... and is 10x more responsive to my needs.

@Greg Powers that is a great tip on the service line coverage. I just emailed my broker to add it to my policies, sadly he said they don't offer the service line coverage to landlords yet, only owner-occupied homes. He said it only cost $30 a year.

This was very timely for me, as my latest multi family needed a new curb-stop. The city told me they would replace it for about $2,000. But if they found iron pipe feeding the house, we would have to replace that. The quote for the water line replacement came in about $10k ... but it also came with a surprise that if the sewer line was in the same trench, we would be required to bring it up to code and move it at least 10 feet away from the water line ... which would cost an additional $20k .. uggh!! Fortunately, the water line ended up being copper, so I'm safe for now.

If you get a lead inspection and there is lead found - then you must disclose that in the future when you sell. It can be off-putting to many buyers to see that there is lead in the home, potentially making the condo harder to sell. Many Real Estate Agents seem to prefer the "ignorance is bliss" mantra when it comes to lead paint. If you've never had it tested you can honestly say you have no knowledge of lead paint later.

However, ignorance is not a shield in this case. If you decide to rent the property to a family with children, and one of those children tests positive for lead, they will test your condo, and if it's positive for lead then you become liable (even if they ingested the lead at their former residence!).

All that being said, I own a few units that are old enough for lead paint. They had all been fully renovated (by previous owners) in the last 2-3 decades. So I went ahead and got a lead paint test, and they all came back clean. A clean lead cert helps me sleep at night (the units are rented to families with small children) and it also gets us a slight reduction in insurance rates.