All Forum Posts by: Ryan Wittig

Investment Info:

Small multi-family (2-4 units) fix & flip investment in Somerville.

Purchase price: $1,125,000
Cash invested: $725,000
Sale price: $1,900,000

This was a complete gut down to the shell. We added dormers to the third floor and dug out the basement to give 8'+ ceilings in the garden level (basement) which added two bedrooms, two baths and an entertainment area. We ran into issues during construction which killed our budget and the market softened when we went to market. We took a little bit of a hit on this one, but we are extremely proud of the product and have a much better feel for what it takes to get things done in Somerville.

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

MLS. Made an all cash, 30 day close offer.

How did you finance this deal?

Local bank financing, 80% of the acquisition and 90% of the construction cost.

How did you add value to the deal?

Added livable sq. ft. in the basement and third floor attic.

What was the outcome?

Great product, happy buyers, not a financial success, many lessons learned...

Lessons learned? Challenges?

Somerville is very particular about landscaping requirements. Need to do much "fatter" deals when the renovation is extreme.

@Christopher Underwood - Justin McCarthy at Lowell 5.

 Go online and look at your town’s previous zoning board meetings to see who are some of the attorneys typically involved.  It’s usually a pretty tight circle.  If you know of any good real estate attorneys, they usually know a few people to ask who specialize in zoning as well.

 If your zoning dictates Two family housing then changing it to a three or four unit will require a zoning variance from your zoning board. There’s nothing to say they will not give it to you, but they are also in absolutely no way obligated to give it to you. It’s a very murky area to be in. Technically you need to be able to show some type of hardship which necessitates you making your changes.

When the board hears your case the biggest thing they will take into consideration is any opinions of your abutting neighbors. If you can get everyone on your side with letters or in person statements, or at a minimum not come out against you, you should be in good position. If any of your abutters are against  your proposal, you will have very little likelihood of passing. 

 If you are serious, you should discuss it with the zoning attorney who does work in Woburn. 

I have a heloc on a 4 family through Lowell 5 bank. It's not considered a HELOC though, but a business line of credit since it's a rental property. Lowell 5 is a great bank to work with.

@Dan K.is the authority on HVAC 😊

I'm doing a three unit (about 1,000 sq ft. each) project in JP. It came out to just about $10K per unit. Depending on where your unit is, they may be charging just for the hassle of doing one unit in the city. DM if you'd like some other people to try. 

Generally, yes. It would seem pretty half *** if you renovate the whole building and skip the HVAC. You also have to build to the market. Do most other newly renovated homes in the area have newer HVAC? If not, maybe you skip it, or maybe you do it to stand out from the others.

Depending on the market/pricing we will do high velocity for higher end homes (over $1.5 M), traditional HVAC systems for medium priced builds and split systems if it makes more sense economically for the build out.  Depending on how big the house/condo is, split systems can be a good route as it allows for you to skip the duct work.

$150-175/sq ft for middle of the road.  Getting out of the ground and connecting to utilities is always a wild card which can throw things off. 

My tenants had to make the request for the program as they are the ones whose names are on the bills. Got free digital thermostats, door sealing and light bulbs. Also added insulation to 3 out of 4 units (last one did not qualify because of "back plaster") for about $1000.