All Forum Posts by: Oliver Salmon

@Wayne Brooks I didn't even consider doing just that. Maybe that is the way to go.

I'm about to list for sale my very nice, fairly large single family house with a very nice ADU. I used to rent the ADU, although perspective buyers are likely buying a single family home and not thinking of renting. We have a flag pole out front. This will be the first thing that people walk by before they walk in the front door at the open house and may influence their mindset/expectations before they walk in.

What flag do you think I should put on my flagpole? I was initially thinking a standard American flag, which I have and I'm still happy to do. I was not sure if anyone else had strategies or insights into a flag they know, or think, would convey that this is a very nice luxurious home, that might put them in the mindset of thinking of quality, and certainly not in the mindset of thinking about getting this house at a bargain price.

I live in central NH, so there is a good mix of both liberal and conservative leaning persons around here, many of whom value the outdoors.

Any ideas?

@Daniel D. Foley , nice to have you here, welcome to BP. I love that your first investment has worked well for you. I suppose your analysis paralysis will have exposed you to the idea of many different options in real estate investing. What are you thinking about doing next?

If I am reading this right, you would be getting a home worth ~ $149,000 for $149,000 (65k loan + 84k loan), would be vulnerable to letting the bank use their option to demand the full value of the home now, and you do not think you could get any bank to give you a loan for the bank's full demand of $84,000 if this were to occur.  I am no expert, but this does not seem to be worth that risk, however small the risk may be.

Maybe if the house was worth substantially more than $149,000 or you were able to give the seller a lot less than $65,000 it would be worth getting that extra equity despite the risk.  Instead, if you willing to pay full price for a home, could you get this friend to fund a loan for the full price of this (or another) home and just buy it outright instead?

Hey @Rick M.

I grew up in Durham so I know the area well, though honestly my real estate experience is in its early stages.  In Durham, if you could make it work with zoning and price, a brand new 4-plex or other multi would likely rent easily to college students, even though downtown looks saturated with new big rental buildings now.  Portsmouth would be a similar story where downtown renters would be good with a multifamily.  It may be harder to attract people outside of downtown in Durham and Portsmouth in multis because most neighborhoods expect single family homes.  Dover would probably work for a multi in many neighborhoods.  Newmarket I could see going either way.  Rye is likely going to be very expensive to buy land, homes, or any other real estate so make sure the rent potential is enough to make cash flow before buying.  Really, the whole area has expensive real estate compared to the rent potential, but if you can make it cash flow it is probably going to be a nice property to own for appreciation potential and for its good renters market.

Thanks for clarifying @Brian Gibbons

I have looked at Berlin houses online before as well.  I was, of course, tempted by the asking prices for both singles or multis.  But, I also worried about why are the home prices so low? When I looked into it, like @Brett C. was saying, appreciation potential appears minimal; even more so than most places in the slow growing and aging state of New Hampshire.  The Berlin population looks like it peaked in 1930 and has more-or-less been dropping ever since (https://en.wikipedia.org/wiki/Berlin,_New_Hampshire).  Many of the biggest employers are various forms of the government and average income is relatively low for NH (https://www.nhes.nh.gov/elmi/products/cp/profiles-htm/berlin.htm) - telling me there are few good jobs for ambitious young people who could fill your rental.

But, if you are OK with risking flat-line/depreciation in housing values in exchange for decent cash-flow prospects it may be a good choice. 

Although, I imagine that an important detail to find out is how easily homes rent in the area.  Is there a lot of vacancy or is it hard to find renters that can afford to keep making payments on time in Berlin, NH?  Myself, I don't know.

Thank you for this info-filled post @Brian Gibbons!

I am trying to learn about creative financing so I greatly appreciate hearing from someone with experience on this.  Since I have a lot to learn I have a couple of questions:

1- Why do you suggest only buying and never selling Contract for Deeds?  I had assumed the opposite; because I am scared of "buying" something without a deed in my name to prove it to a court in the case there are ever legal questions and I would prefer the idea of "selling" something while continuing to hold a deed for the same reason.

2 - Why do you suggest being cautious with sub2 and always paying it off quickly?  I understand that, if there is a due on sales clause, a bank has the option to declare due the rest of the mortgage after a title changes hands.  But what do you see as wrong or overly risky about having a primary plan to buy and hold with a backup plan to quick flip vs refinance in the event that the bank takes their option?

Now that you own a condo, would you recommend vacation homes that are independent or a condo? I can see the benefit with keeping it relatively passive via a condo association as you imply, I just know that some people seem to have strong opinions on HOA fees and rules after condo ownership.

It is nice to hear that you still found cash flow despite property values dropping.  And I guess if the pessimists are right and a downturn is eminent then there may be another opportunity to buy some vacation rentals on sale again soon?

Thanks for all of the replies.  I will look for those missing values that I can fill.  I have always been a little scared of vacation rentals, fearing that in every economic downturn people to stop vacationing and my cash flow will end for the next year or two.  But, I imagine that there are always a few of the "right" vacation rentals that always get filled.

What qualities have you found, @John McRae, in North Conway vacation properties that still rent out in bad economic times like 2008?