All Forum Posts by: Tyler L.

What a nightmare-hope the $30k in equity is worth it for the new buyer. 

Speaking from personal experience, rookies need handholding. A year and a half in as an investor and 2 rehabs in now, and I still need TONS of handholding. A really good, trustworthy GC and really good, trustworthy agent is crucial. 

Once you find one good general contractor you can find most of your other people from him. 

I found a great GC through an agent/investor I know who came in to rehab one of my units-and he liked it so much he decided to move in! Whenever I need someone else for a quick job he's there to pull out his rolodex, and it's been incredibly helpful. 

I have a vacancy coming up next month, so will be looking to bring the unit up from it's current C condition into a B in line with the neighborhood. My current SOW is more or less as follows: 

New floors (hardwoods are heavily scratched, will be replaced with LVP's) 

Paint

New appliances (replacing current with stainless steel)

Cabinets (I have the opportunity to purchase new ones at a discount, so I'm running the numbers on replacing vs painting and swapping hardware)

New tile and vanity in bathroom

I have some flipping experience, but this is my first rehab for a rental property. As such, I'm open to any trade secrets or wisdom that would be useful as I dive into it, whether that's in the materials to use, where to source them, how to manage, etc. 

This is a 3 bed, 1 bath unit of about 1,200SF. I have 2 more in the building that have an identical layout that will each be getting the same treatment upon their own vacancies. The building is 140 years old so there's a lot of straight maintenance work that needs to be done as well. 

I've been going back and forth on whether to put solar on my triplex or not.

If I did, I'd be buying the panels, financing them at $200/mo for 25 years. The company I'm working with could still submeter everything so I could bill the tenants for electric, probably somewhere around $50/unit. Additionally, included in this is about $15k worth of electrical (mostly knob and tube removal) that I will be doing anyway.

I'm getting a site survey out soon but the building seems to be a pretty good candidate for solar and would likely result in me being able to sell electricity back in addition to charging the tenants.

What's TBD for me is whether or not it will add any additional value to the building-if it doesn't, it kind of seems more or less like I'd just be breaking even, but if it does it could be worth it.

Does anyone have any additional insight? What other questions should I be asking? I'm in Massachusetts if that makes a difference.

@Victor Delgado Velez I’m dealing with this right now.

Truthfully it depends on the extent of it. My rehab was moderate-not enough to justify asking them to move out but enough to justify putting them in a hotel for a few days.

Some lessons learned:

1. Create a Gantt chart, or at least have one in your head. This will help you figure out not just the order of the rehab, but which parts can be done at the same time. The faster to get them in and out, the better.

2. Don’t expect the contractors to do anything not in their job description. I figured it was a given the guys hanging drywall would clean up after themselves. Imagine my tenants fury when she came home with an extremely asthmatic daughter to find dust covering all the surfaces! And the movers moved the furniture, but didn’t put it back together. Make sure there’s someone there to put everything back in place and someone else to clean everything.

I remember asking about how climate change would affect RE investing here 3 or 4 years ago and getting mocked for it-people aren't laughing so much now seeing their insurance premiums skyrocketing

@Sal Orlando I used Bank of England (Arkansas, not the country). They have a branch here in Boston where I’m close to the Manager, VP, and several lenders, and they’re very investor friendly.

PM me for an intro with my loan officer.

@Andrew Freed thanks so much! I'll shoot over a message-it'd be fantastic to meet up.

@Brian J Allen Absolutely.

First, I should say I do have my real estate license, and originally thought about representing myself. But I've done all my work in Boston. Worcester, about an hour west, is a completely different market. Different areas, different tenant base, different local minutiae, and different contractors, handymen, electricians, and more. Also important: I had never done a multifamily deal before.

I looked at everything that I had going against me on a deal like this, and figured if I did make a mistake, it'd cost me more than I'd save from collecting my own commission.

I originally contacted Brian, who I had seen here. We toured several places together, but at the end of the day, the place I liked the best also happened to be his listing. Brian is a standup guy who is honest and extremely trustworthy, but in this deal he had to put the best interests of his client first, so we brought in Jeff Torres to represent me.

There were some challenges. The seller drove a real tough bargain during the entire negotiation phase. A couple days before closing, we received word that the drop ceiling had fallen out on one of the units. Had I been representing myself, I would have had to track down the first contractor I could get in touch with, hustled him in, get a quote, and then hope it's not a rip off since I didn't have time to shop around before closing, and couldn't delay it any longer. But, by having a buyer's agent who lives and breathes Worcester multifamily homes, I could get a trusted contractor out immediately to give me a quote, and then hear from both Jeff and Brian whether that quote was reasonable. Same for the electrician, the window installer, and anyone else I needed to get in touch with. And there's also just some knowledge that you can't find online. Things like which colleges would actually have students who would consider renting there-my place is likely too far for most undergrads but it's possible graduate students would be interested. In Boston, if you don't get an apartment rented by September 1st, you have to accept that most likely it won't be rented until the following June. It was great to talk to someone local to explain what the Worcester rental cycle is and how it's more forgiving. Even down to things like which highways don't get backed up, or which local programs to use and how far ahead to call.

The real takeaway for me is this: there are people out there, in every market, who are bona fide experts. They understand the granular details of every neighborhood and every property, and how to navigate the local market. If you're not one, it's worth it to bring one in. I've studied the Worcester market and studied real estate investing, but unless I started doing it full time (which I can't because of my job), and continued to do it full time for years, I wouldn't be able to get the same level of expertise as people like Jeff and Brian.