All Forum Posts by: Brendan Stratton

I also would be interested in a meeting on Saturday.

@Jeremy Bloom How sure are you that you can even sell the building with the lead abatement on there? You'll have to disclose that.  Guessing that most investors will want that cost discounted from the asking price.

I don't feel that selling is card you can play without taking a loss. Granted holding will be painful. For a time. But if you do the math, reflect and can ride out the worst of it then I'd say hold because you'll be better off in the long game.

sticky situation for sure

It is common for single family residents to pay their own utilities. Outside of water due to the possibility of getting a lien. Not so much the case with multi family building/apartments. Typically a tenant renting a single family residents are of a different income bracket or is in need of the larger space a SFR can provide. Or in other cases has the backing of government programs to guarantee a huge amount of the top dollar rental rates that can be gained by having properties that qualify for said programs.

In my opinion It is risky to rely solely on electric heat outside of domestic hot water. Heating systems such as heat pumps become significantly inefficient once the temperature drops below a particular range. Somewhere around 25-30 degrees. Even if this expense is put on the tenant and they don’t let the units pipes freeze after one winter of having their electric bill jump by a significant amount they will just move. Heat pumps are a supplement to a heating source not a replacement.

My hope when I was thinking of adding heat pumps to my apartment building was to find a way to have my baseboard system automatically stay off till the outside temperature was about 40 degrees. Giving the tenant a perk of an efficient AC in the summer while having them pay for the heat until the temperature dropped below the point that it would start to massively affect their electric bill. All while being able to keep rents close to that of what a building owner who pays for all heat. Justifying it by saying “yes you pay for some heat but in trade off you get access to a very efficient AC unit in the summer that you don’t have to install/uninstall/store every year.”

I’m curious about utility optimization. Particularly to heating. My apartment building is in Maine and is a Buy and Hold/House Hack. It is common practice for landlords in the area to include heating and hot water as part of the rental in multi family units. This has pros and cons for both parties. They don’t have to worry about the oil running out and we don’t have to worry about oil running out and causing potential damage. However this takes a good chunk of the Cash Flow during the winter months.

The building came with double pane vinyl windows. Since the purchase I have done upgrades to reduce my oil cost. Spray Foam in basement and attic. Replaced all doors going in and out of the units/building. Am having hybrid electric water heaters installed for each unit so the hot water cost will now the tenants responsibility. Have yet to insulate the walls with blown cellulose. I was told this should be a low priority because the return on investment is much longer than some of the other things I have done.

Any suggestions on other improvements? I had considered looking into heat pumps. But since the tenants don’t pay directly for their heat then they would just use them as ACs.

Thanks for any input

Investing in a single family house vs duplex/triplex/fourplex all depends on your goals. And what I have found in most of Maine (Portland is a whole different animal) is that many houses cost as much as the multiple units. There are exceptions naturally. But say you were buying a 4 unit with each having 2 bedrooms for $130k and a house for $100k. Then it is costing you $32.5K for each unit vs the flat 100k for the house. Now say (before expanse) each apartment is getting you $675 and the house is getting you $1k. That's $2700 from the 4 unit and just $1k from the house. Then if there is a vacancy in the 4 unit you still are generating cash when an empty house costs you money.

However if your looking to flip then single houses are often (again not always) easier to sell. Most of your profit is in the sale. Renting it out while you are waiting to sell it keeps it from costing you money while it sits on the market.

Again it depends on your goals. Your first deal as a new investor regardless of your goals/strategy is going to be time consuming and a learning experience. 

The 15-day grace period in Maine is accurate. I don't like it.  Found this link along with Landlordology to be very helpful.

http://ptla.org/rights-tenants-maine#

Hello My name is Brendan. My parents bought and held two triples and a house that they rented in the Waterville area when I was going up. My Father passed away and so my Mother gradually liquidated the properties.

As of two years ago I bought my own 4 unit building and live in one of the units. With the intention of holding for Cash Flow. Due to my upbringing and my Mother as a resource I have some experience walking in the door but would by no means call myself an "expert". Am looking to expand.