All Forum Posts by: Robert Carmody

Thanks. Your responses/experiences seem to mirror our recent experiences with Booking.com. 

There are many advantages and upsides to real estate investments in New Mexico. I have worked with many experienced investors from Southern California, Las Vegas, Phoenix, Tucson, Denver, and other large metro areas in the southwest and west coast, with seasoned investors that still live in all of those great cities but have shifted most of their real estate investments out of those higher cost or higher risk markets into ours. 

1) Compared to most cities in the SW and West, home prices in the Albuquerque metro are relatively affordable. Newly built homes start in the $270s in suburban communities, like Los Lunas and Belen, or low $300s in class A neighborhoods in Rio Rancho and NW Albuquerque. All are within 30 minutes of major employers.  

2) Like most metro areas in the surrounding states and regions, we've had an inventory shortage for more than 5 years. It is improving, meaning sellers and builders are facing a little more competition, but there is still a shortage of housing units in the region. 

3) Rental prices are strong and single family homes and townhouses rent very quickly. Rental prices for a 3bd/2ba/2cg home 1500-2000sqft can easily range from $1,800-2,600 per month. 

4) Major employers in Central NM include Sandia National Labs, Los Alamos National Labs, Kirtland Air Force Base, FBI, US Federal Government, State of New Mexico, ABQ Public Schools, University of New Mexico, Central NM Community College, Presbyterian Healthcare, Blue Cross Blue Shield, Lovelace Healthcare, UNM Hospitals/Cancer Center/Level I Trauma Center/Regional Medical Center, Netflix Studios & Film Industry, Solar Panel Manufacturing & Renewable Energy Industry, Meow Wolf, Amazon Fulfillment and Distribution Centers, etc. These employers frequently attract new residents and create a steady influx of good quality renters and prospective tenants. 

5) The Albuquerque metro area and Central New Mexico enjoy over 310 days of sunshine and a mild climate year-round. Homebuyers and renters can comfortably move all year. Homeowners do not have major risks from natural disasters. We do not have serious floods, tornados, heavy snow and rain, frequent major hailstorms, big earthquakes, or extreme weather conditions. As an investment property owner, this means less maintenance and fewer unexpected expenses from storm related damage, often resulting in more affordable insurance premiums, less wear & tear on mechanical equipment, roofing materials or exterior surfaces. Most properties are landscaped with water conservation in mind and therefore you don't have the expenses or hassle of maintaining large lawns, high water bills, large tree maintenance, etc. Most homes have stucco exteriors, which are also relatively low maintenance compared to areas where wood and siding are common. 

6) Stable and steady housing market. Historically, this market gradually trends upwards, with few dips, and less volatility in real estate purchase and rental prices. 

7) The greater ABQ metro area and Santa Fe have a population of approximately 1,000,000. Average household income in Albuquerque is $83,000, with a median home price of approximately $365,000. Cost of living is about 6% below the national average. 

8) Landlord/Tenant rights and laws are fairly balanced, and eviction rates are significantly lower than the national average (22% below national average). Over 52% of last  year's evictions came from the 10 largest apartment buildings, so evictions from single family rentals, condos and townhouses are not common. Evictions can be served between 3 and 30 days. 

If you'd like mor information or input, feel free to reach out. 

I've seen some recent articles indicating that Booking.com is trying to compete more against Airbnb. Currently our primary source of bookings is Airbnb, followed by VRBO. Earlier this year, we were also posted on Booking.com, and while the listing did produce several reservations, it came with a huge amount of frustration and more last-minute cancellations that we've experienced (significantly more as a %) than the other 2 booking platforms, Airbnb and VRBO. There were issues syncing the reservation calendar, and it is nearly impossible to reach a customer support representative with Booking.com as an individual STR owner. The guests that booked through Booking.com, who did not cancel ahead of their check-in date, were good guests, but we didn't receive near the response rate for guest feedback that we do from Airbnb and VRBO. Once the Booking.com commission was paid for each reservation, the net payout was usually slightly less than if the guest had booked through Airbnb or VRBO. We canceled our listing on Booking.com towards the end of the summer. Our occupancy rate has been higher this fall, using Airbnb and VRBO than it was during the summer and spring months, when we were listed on all 3 platforms. I'm not suggesting that the higher occupancy is the result of dropping Booking.com but am not sure that it ultimately contributed to more reservations or a greater success rate. Curious about the success others are having with these platforms or if anyone thinks Booking.com is becoming a necessary tool for securing STR reservations?

Great job on the transformation and for receiving so many awesome reviews!

Looking for an answer or insight to a question regarding my 1099 statement for commissions earned. I recently had a closing on 12/28/23. The title company issued a check to my brokerage on 12/29/23, however, due to the holiday weekend and the broker being out of town, my broker didn't actually receive the check until 1/4/24, at which point it was deposited into the brokerage account, and then once my file was cleared, a check was issued to me on 1/8/24 (dated 1/8/24). 

Would this income be included on my 1099 for 2023, since that is when the closing occurred? Or, should it be included on my 1099 for 2024, since that is when the payment was issued to me?

They might be asking for your proof of funds and waiver because another offer or offers included those documents with their offer, and they want to make sure that the other buyers with offers that they are considering are able to do the same thing, or that they don't waste their time if they accept an offer from a buyer who won't produce those documents, after they've turned the others away. Your offer is likely in the running, or they wouldn't ask. I just wouldn't count on it being "the one" because of that request. You can always ask the listing agent if they are authorized to disclose terms, and sometimes they are per their listing agreement, but nobody bothers to ask. You can also ask how many offers are being reviewed or received. If you are concerned another buyer might inch you out, and you really want it, you can probably add an escalation clause that bumps the price above the next highest offer, up to a certain price limit. Sometimes those help, but the listing agent needs to have a clear understanding of how they work. 

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $312,000

Duplex located in a popular older neighborhood near University, Med School, Hospitals, Shopping & Dining District. Each unit is approx 875 sqft with 2 bedrooms, 1 full bath, 1 car garage. Priv Patio/Yard. Property was well maintained &reasonably updated with refinished wood floors, updated bathroom, newer appliances, dual pane windows, and modernized heating/cooling systems.
Combined monthly income is $2,975 and both tenants have traditional 12 month leases. Units are individually metered.

What made you interested in investing in this type of deal?

I represented my client purchasing the property.

How did you find this deal and how did you negotiate it?

This deal was on the market and we moved quickly with an offer due to popularity of the location, solid numbers, and good long term potential.

How did you finance this deal?

Client obtained conventional financing as an investment property.

How did you add value to the deal?

Both units are leased and property was in good condition overall. The property has good potential as a Med Term Rental in the future, and minor cosmetic updates can be completed as tenants turn over to keep rents improving in a positive direction.

Lessons learned? Challenges?

Despite higher borrowing costs and a shift in the market, there is limited supply of good quality income properties. The layout and location of this property make it desirable, with opportunity for maximizing monthly rental income as a MTR if owner chooses to do so. For these reasons, we presented the seller with our offer quickly and it was accepted.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Robert Carmody w/ Re/Max Select in Albuquerque, NM

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $312,000

Duplex located in a popular older neighborhood near University, Med School, Hospitals, Shopping & Dining District. Each unit is approx 875 sqft with 2 bedrooms, 1 full bathrooom, and a 1 car garage. Each unit also has its own patio and small fenced yard. Property was well maintained and reasonably updated with refinished wood floors, updated bathroom fixtures, newer appliances, dual pane windows, and modernized heating/cooling systems.
Combined monthly income is $2,975 and both tenants have traditional 12 month leases. Tenants pay their own utilities. Units are individually metered.

What made you interested in investing in this type of deal?

I represented my client purchasing the property.

How did you find this deal and how did you negotiate it?

This deal was on the market and we moved quickly with an offer due to popularity of the location, solid numbers, and good long term potential.

How did you finance this deal?

Client obtained conventional financing as an investment property.

How did you add value to the deal?

Both units are leased and property was in good condition overall. The property has good potential as a Med Term Rental in the future, and minor cosmetic updates can be completed as tenants turn over to keep rents improving in a positive direction.

Lessons learned? Challenges?

Despite higher borrowing costs and a shift in the market, there is limited supply of good quality income properties. The layout and location of this property make it desirable, with opportunity for maximizing monthly rental income as a MTR if owner chooses to do so. For these reasons, we presented the seller with our offer quickly and it was accepted.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Robert Carmody w/ Re/Max Select in Albuquerque, NM

Multifamily properties with 2, 3 or 4 units may be purchased as owner-occupied homes, as opposed to investment property, if the buyer will occupy one of the units as their primary residence (typically within 60 days of closing). As an owner-occupied buyer, you may qualify for more favorable mortgage rates, and low-downpayment programs, including FHA financing and conventional mortgages. If a buyer is purchasing a 1–4-unit property that they are not going to occupy themselves, as their primary residence, they may still qualify for a 30-year residential mortgage, but typically at a higher interest rate and with a larger down payment. Properties with 5+ units are typically financed through commercial real estate lending, business loans, or alternative funding sources.

You will want to find an experienced agent, with multifamily experience, in the area that you want to purchase. You'll also want to work with a good lender, who also has experience financing similar types of properties to owner-occupied or first-time buyers. The agent should be able to connect you with a reputable lender. 

There are a number of details that are different from a single-family home purchase, none that complicated, but important not to overlook. In order to occupy one of the units after closing, you'll need to make sure that one of the units will be vacant, or that you can legally give notice to one of the tenants to vacate. The zoning is another important factor. Sometimes single-family homes are converted into a duplex or something like a detached garage is converted into a guest house, and in doing so, the property no longer conforms to its zoning. Those are just a couple examples, but an experienced agent will be able to help you through the process. Buying a duplex, where you can occupy one unit and rent the other, can be a great way to acquire your first investment property, which you can hold onto and rent both units when you are ready to purchase your own home or another multifamily property in the future. 

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $708,000

Built 2022. Two x 3bedroom/3 bathroom/2 car garage/1400sqft. Two x 2 bedroom/2.5bathroom/1 car garage/1090sqft. All 4 units have laundry rooms or utility closets in the unit, spacious primary bedrooms, ample closet space, open kitchen & living room layout, stained concrete floors on main level, forced air heating, refrigerated a/c, individually metered for gas & electric services, and appliances included. Each unit also has a small backyard and private patio on the back side of the property.

What made you interested in investing in this type of deal?

My client purchased the property due to the age, condition, low maintenance/durable design, and income relative to the acquisition cost and overall price. Also, property is located in a popular area with long term appeal and rental prices that have steadily increased over a long period of time.

How did you find this deal and how did you negotiate it?

I was aware of the property through a colleague that I've worked with before, and we were able to negotiate the agreement before it went onto the market, which they were preparing to do.

How did you finance this deal?

Cash/Conventional investment property loan

How did you add value to the deal?

As the buyer's broker, I located the deal before it hit the market and avoided being in a multiple offer situation or bidding war, as the property is in a generally popular area, where investment properties tend to be in higher demand. I directed my client toward marketing services and resources for advertising the property, and provided them with professional photos and virtual tours that I arranged right after we closed, which they use in the future when they advertise any of the units.

What was the outcome?

The larger units are each leased at $1750/mo + utilities
The smaller units are each leased at $1525/mo + utilities

Total monthly income = $6,600.00
Total annual income with current leases = $79,200.00
Purchase price = $708,000.00
Property Taxes = $8,750.00/yr (estimated, currently much less, as they have not yet been reassessed following the construction of the property, or re-construction)

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I was the agent on the transaction. (Robert Carmody with Re/Max Select) I've been representing buyers, sellers and investors for approximately 17 years in the greater Albuquerque & Rio Rancho areas, as well as some sales in the Santa Fe area also.