All Forum Posts by: Zach Cowan

@Account Closed thanks for your detailed response. Really helpful insight! Normally, I wouldn't consider this at all, but given the tenant's 2 years at the property and their stated desire to purchase in addition to nearly identical existing comps in the past 6 months I'd feel confident in accurately coming up with fair market pricing.

@David M. I have a real estate attorney I would work with, just considering saving on commission for a listing agent, only for this one buyer.

@Marcus Auerbach Thank you also for your feedback and insight!

Hey Bigger Pockets Community!

I'm considering selling my rental condo to my current tenant and am seeking advice for what to consider. I'd like to sell direct using just a real estate attorney to reduce the cost of sale/increase profits. I'm hoping folks here can share resources on everything to consider for conducting this transaction on my own, steps, disclosures required in VT or links to good resources. More info on the property and sale below.

My tenant has been in place for 2.5 years, has very steady income in the medical field (over $300k annually) and is interested in purchasing.

I wouldn't consider FSBO for the open market, but I would consider selling at recent comp values to my existing tenant without agents involved to keep our costs down. The association is currently in the process of acquiring bids for residing both buildings entirely and rebuilding 3 story decks that have rot. I anticipate this to cost ~$30,000-$40,000 per owner and it could be a good chance

I bought in November 2018 for $278k with $56k down and put another $5k in for renovations. I've got roughly $200k in equity with similar units going for $400k in recent sales.

My plan would be to use the profits to purchase a multifamily in the same neighborhood.

Thanks in advance for any insight!

Zach

Hi Jon - I'm curious about this market as my family lives in this area. Do you have any more details you'd be willing to share around the returns you're seeing?

Hello Bigger Pockets Community,

I've been looking around for Real Estate Investor meetups in New England and have had trouble finding anything. I'd love to connect with more folks in person in this kind of format. Does anyone have anything in the next 3-6 months around New England that they would recommend?

Thanks,

Zach

Hey Ryan. Thanks for chiming in! The condo was purchased in Q4 2018. It's an uphill battle right now as the association had not raised HOAs and had very little reserves when I first bought the place. Due to that we've got some long term cap ex special assessments (2 roofs and siding for 2 buildings) planned over the next 3 years.

For those three years the rents I collect will primarily cover those expenditures leaving little to no cash flow. I project 6-7% annual cash on cash return in year 4 and beyond.

The challenge as a buyer right now is pricing in the market. That condo has appreciated 25-30% in the 3 and a half years since I bought it. Great for me as an owner, but looking to purchase another property in the area it's hard to find opportunity. On top of that Burlington taxes went up significantly last year during the reassessment.

All in all, I'm curious to start looking at other markets outside of Chittenden county where better cash flow opportunity may be a little easier to find. In general I think finding relatively turnkey cash flowing properties in VT is pretty difficult in this market.

Curious to hear if others have suggestions.

Best,

Zach

Hello Bigger Pockets Community,

I'm a beginning investor. I co-own a single family home in the South end of Burlington VT with my fiancé and I own a rental condo (2bd, 2.5ba) in the same neighborhood.

I have ~$100,000 in capital that I'd like to use to purchase a multi family rental property. Burlington is a great market for appreciation but can be challenging to find opportunities for cash flow. Do any experienced Vermont investors have recommendations for the markets in or outside of Chittenden County for best cash flow multi family opportunities within an hour drive of Burlington?

Thanks!

Zach

@Emily And Eric Erickson

@Emily And Eric Erickson

I'll expand a little bit on my cash flow. Mortgage, Tax, Insurance, HOA and management fees (I pay 8% gross rents to a property mgmt. company) are $2337.50 per month this year. The rent I collect is $2,600 (up from $2,500 the first year.)

Taxes increased significantly in 2021 due to city wide property reassessments and I have an escrow imbalance payment of $169/mo. through January of 2023.

The special assessment for this year will cost me $5,146 leaving me with a negative cash flow for the FY2022.

In 2023 I'm considering ending the contract with my property management company and self managing. This would add $208/mo. revenue and another $169/mo. Raising rents another $100/mo. would bring me to a total monthly cash flow of $730.90 beginning in March 2023. Pretty close to that goal.

The only variable will then be the cost of special assessments for the siding. We are still in the process of gathering final plans from the architect and structural engineers. I anticipate the total cost being somewhere between $15,000 to $25,000 total here. This would mean it would take ~3 years to pay off in total.

So, considering these projects, this property could begin to provide significant cash flow towards that goal in 2025.

It's time to start seriously analyzing more singly families and multi families in VT to look for a property that could provide better cash flow in the more immediate future. However, deals in VT right now that provide that cash flow can be difficult to find. What are your thoughts?

Thanks!

Zach

@Martha Nowlan thanks for the thoughts. I'd love to connect for a little bit this week to learn more about what's working in the counties east of Chittenden that you mentioned.

Please DM me if you'd be willing to set up a virtual meeting sometime during the next week.

Thanks!

Zach

Hello Bigger Pockets Community!

New Member. First Post here. I'm 33 years old and I would like to reach a point of generating $10k monthly passive income from rentals by 2030.

I currently co own a single family home in Burlington, VT that I bough with my fiance in Jan 2021 and a condo in Burlington VT that I purchased in November 2018. Both are in a highly coveted neighborhood in the south end of Burlington.

I just wrapped up my first FY as a landlord. My net profit was $1100 for ~2% cash on cash return. I bought the condo for $278,000. I put down $56,000 for 20% and closing costs and another 4k to build a pass through bar from kitchen to dining/living area and moved laundry to the master closet.

Similar units sold last year for $350-400k. I own $218,000 on the condo still. In the next 5 years I anticipate $15-25k in special assessments to replace a second roof (two building association and the first roof was replaced last year) and reside both buildings.

After those long term maintenance projects are complete I project ~10-15% annual cash on cash returns. In the meantime I anticipate rental income to be able to cover all or most of the long term maintenance costs.

I have $150,000 in cash and stocks. I'd like to add a multi family into my portfolio next and stay in the same county. I'm curious if more experienced investors would consider selling the condo for more capital and avoidance of paying assessments and parlay that into cash for a multi family... With the way the market has moved and the neighborhood that the condo is in, it seems to make sense to hold and use cash for leverage into a multi family, but deals are hard to find in the area.

What advice would you have for someone in my position looking to achieve my goal of $10k monthly passive net profit in the next 7 years. What next moves would you consider?

Thanks in advance for the discussion!

Zach