All Forum Posts by: Michael Barnard

Are there any tools I can use to figure out what my payments would be based on different private lending scenarios? Essentially is I borrowed 80k from a private lender I want to know how to figure out what my payment would be based on a certain percentage rate but also if it was interest only can PI.

TIA

 So my decision is based on what I project will happen in the real estate market. I personally think we are going to hit a drawn out correction where the appreciation we’re seeing in NH will slow or go completely stagnant for the next 7-10 years. Based on that I’m trying to make a cash flow play.

That being said I’m definitely wanting to connect with folks in my local market and if I land something or can partner on something in NH that would be awesome.

Thanks Bill, I’m investing in Cleveland and Columbus but also open to deals close to my home base in New Hampshire.

I’m a rookie investor investing long distance. I’m wondering if I’m being too conservative. When I underwrite a potential deal I include 10% for maintenance, 5% vacancy, and 10% for cap x. Is this to high? It seems like when I run numbers on a property my offer needs to be embarrassingly low. What are folks using for these numbers?

TIA

 Thanks Joshua I’m going to connect with you.

Hey BiggerPockets! I’m hoping I can get some advice and different perspectives. I’m sure this question has been asked before but with changing market conditions I don’t want to look up old info.

My wife and I are rookie investors. We own our primary residence and that’s it so far. We just had twins in addition to our 3 year old and during the pregnancy we focused on getting our home ready and networking. As a result of the networking I have a couple of people interested in providing private equity.

My question is in what market should we invest in. We are located in Southern NH, the intention was to invest locally. Our issue is at the stage we are at cash flow is critical. Not only can we not afford to take a year or two at a loss our investors have made it clear there needs to be meat on the bone for them to move forward. Should we stick to this market and fire off low ball offers to see if we can make a deal or are their long distance cash flow markets we should consider?

The only concern I can think of for quality level of the furnace is local efficiency requirements. Most of my work is in Massachusetts where I cannot install anything under 90% efficient.

I would ultimately look for a combination furnace/ac unit as opposed to picking to separate pieces of equipment. Slightly less labor and material on the install and honestly from a techs perspective I find easier to maintain.

Bosch is a solid up and coming product I’m not completely familiar with their entire line but I know they have a basic heat pump that is made in China and doesn’t have the best reviews. Conversely they have a higher end heat pump that uses components purchased from Mitsubishi. It is a newer line but given that they are sourcing their equipment from Mitsubishi and their overall reputation as a manufacturer I’m expecting good things out of it.

Whether to do just a heat pump or a heat pump and a furnace comes down to the capability of the heat pump. Because they pull heat energy from the outside air most basic heat pumps are able to generate heat with an outside air temperature range anywhere from 25-45 degrees. Where as something like a Mitsubishi hyper heat (which I believe is what the new high end Bosch is based off of but not 100% certain) can generate heat to 30 below 0. For reference I live in NH and use that for my heat. As long as the heat pump you choose can handle the coldest night you will encounter you can go with just a heat pump, otherwise you need some supplemental source of heat whether a gas furnace or an electric heat pack. Your hvac contractor should be able to setup a controls package to allow the two systems to interact with one another.

Be advised many heat pump thermostats are more expensive then usual thermostats because they’re specially designed for that piece of equipment and you cannot use something like a nest or an ecobee.

Ok so this is a loaded question. All four of those manufacturers have different grades of equipment from high end, mid grade, to budget. On the heating gas fired furnace side I haven’t seen any specs on the residential side that would make it worth the extra money. The benefits all come from the refrigeration or cooling side. If you’re passing the utility costs to your tenants budget is probably the way to go. They’re no frills and usually don’t have any proprietary parts making repairs significantly easier and less expensive. The choice of manufacturer in the current market for me would come down to who can get me equipment and local part support for anything this is a proprietary part.

The other side of the equation is if your want to move away from gas and go with a heat pump. In this case from those manufacturers Trane is your only option. They’re in a partnership with Mitsubishi who makes the best heat pump systems anywhere. Pros to this is your long term energy costs go down, depending on the price of gas in your area this may or may not be significant, I did this at my house where we had oil and the system paid for itself in two years. A customer of mine replaced electric baseboard with a system like this and paid it off in 1.5 years.

Cons to this. Upfront costs is WAY higher. I’m talking a couple thousand dollars for a complete budget system vs 7-20k depending on size of the system for a high end heat pump.

I know I just threw a wall of text at you so if you want me to clarify anything let me know.

Hi Tim, while I'm a rookie investor I've been in the commercial HVAC industry for over 11 years. In my opinion doing the entire system now is the only option that makes sense. R22 is now illegal to manufacture so supply is extremely limited leading to its high (only going higher) cost. Also in my experience the valves your contractor is referring to are extremely unlikely to hold.

Bottom line the potential for extremely high costs by not replacing the entire system now is in my opinion way way to high to not to do the work now.