All Forum Posts by: Robert Leonard

@Eric Dami Please do remember that everything I say is from my experience and likely varies from market to market.

That being said, if it's a rental property, I personally would NOT do granite countertops, unless you were trying to rent to a higher class tenant. At today's point in the market cycle, I wouldn't be trying to rent to high-end clients. I would make the property nice, but as cheaply as possible. You can get great looking countertops that look like granite but are actually laminate and 1/10 the cost of granite. That's what I would go with. Often times higher class tenants would be fine with that, as long as it all looks nice. If the market turns and you have to cut rents a bit, and/or rent to lower class tenants, at least the laminate materials will last.

As for HVAC, this will vary widely by the contractor, but a fellow investor I know just put a central air system in a house that didn't previously have central air, it cost $15.5k. If it had central air, I believe it's closer to $8-9k. As for a new furnace/boiler, I was quoted $8k for a new boiler in one of my properties.

Hope this is helpful.

Robert Leonard

@Juan Jose Lopez I agree with @Matt Hurley above. The ARV makes it a bit tough to get a good sense of this project. If the ARV is high enough and you can refinance the property to get all of your cash out (a BRRRR), that would make a big difference when analyzing the property.

The vacancy of 5% is as bit low for my liking, but that's truly up to the individual. I just prefer to estimate conservative on vacancy - about one month per year, or 8%.

I also noticed you have in 10% for management fees, but you're analyzing it with a 3.5% down payment. This down payment percentage tells me this will likely be a house hack and/or owner-occupied property. That being said, if you're living there, do you really need a property management company at $700 per month? That would add $700 back into your monthly cash flow and turn it from a negative cash flowing property (-$257 per month, per your analysis), to about $450 per month in POSITIVE cash flow.

Also, water & sewer and insurance estimates seem a bit low, but that could just be the area of this property as compared to my area. 

Best of luck.

Robert Leonard

@Eric Dami Without knowing too much about the property, just from what you've said, my initial thoughts are this:

Is this a fix and flip or a BRRRR? If it's a BRRRR I'd recommend reconsidering granite countertops. Depending on the area for a fix and flip, I'd also consider cheaper alternative options to granite. Of course granite is nice, but if you're not going to be selling to upper-scale customers, or if the surrounding houses sell fine with no granite countertops, this might be an area where you could cut some costs and increase your margins.

As far as the AC unit and new heating go, your estimate of $9-10k seems a bit low to me. However, this is highly dependent on what is actually included in "new AC unit" and "new heating". If you're sticking an AC unit in a window and calling that a "new AC unit", that's one thing, but if you're completely redoing a central air system, you might be a bit low on your estimates. The same goes for heating. If you're replacing some piping, you may be okay, but if you're installing a new boiler (for example), you'll likely be too low on your costs.

Robert Leonard

Congrats, @Steve Y. ! Unfortunately I do not have any contractor recommendations, but I did want to reach out, connect/network, and say that I am a fellow NH investor in the Hillsborough County. Happy to talk real estate any time!

I'm getting the sense tha VT Mutual is pretty good, haha. Thanks, @Raymond McGill !

Thanks, @John Mocker ! I've reached out to Vermont Mutual, but I'll continue reaching out to others as well.

@Matthew Stanizzi I don't think we would be either - I'll talk more specifics with a lender.

We don't have a plan to refi or BRRRR this property, but wanted to see if anyone else had been forced to refi into a commercial product from adding additional units to their properties.

Robert Leonard

@Elijah VanDenBerg  Thanks! Do you happen to have a direct contact? If not, I'll reach out to them via a general number/email on their site.

@Matthew Stanizzi Completely agree - we'd really prefer to not deal with the commercial product if we don't have to. We just don't want to run into issues with a lender if we go residential and then add that fifth unit.

Love this idea!!