All Forum Posts by: Matt Lefebvre

@Nick Hamel I think Rochester has a lot of mixed opinions.  Our company manages about 150 units in Rochester and the owners we manage for are very bullish on Rochester and think its going to grow.  I see a lot of others think its "going to grow... but we might be dead before it does".  There's still dirt cheap properties and there's still overpriced properties, just like in any other market.  I think there's potential, but when the city starts rapidly appreciating is anybody's guess.  

Property taxes are a consideration for NH properties, but just factor it in as another operating expense when running numbers.  It does hurt spending that much on taxes every month, but the government always gets you on taxes somehow.  Either you're paying it through the gains on the rental property or you're paying it in the property taxes or you're paying it in your income.  

@Kevin Z. I don't know the specifics numbers, but based on what you're describing... your margins are razor thin on that SFR. I'm doing some back of the envelope math here without all the facts... but based on the picture you paint, this doesn't look great.

I very rarely see single family properties make positive cashflow in NH and if you have a 325K property... I can't imagine there being positive cash flow if you're only making $400/mo after paying your mortgage. A single month of vacancy wipes out an entire year of profit. A blown hot water heater eats away three months rent. If you can make $80K in profit on the investment run the quick numbers. Even if you assume your positive cash flow is truly $400/mo after expenses... $400/mo x 12 months = $4800/yr. To make up the difference in positive cash flow between what you're making right now annually and what your potential sale profit would be... you'd have to own this SFR for 16.66 years before you breakeven and compare to the profit from a sale. The numbers don't lie on that one... you'd make way more money selling that property and reinvesting into something with a stronger cash flow.

Regarding the three family... I hate to be the bearer of bad news, but I think you're over-rehabbing that property if you're planning on hanging onto it for a long term rental.  A cash flow of $650/mo (because yes... you have to count management as an expense because you're either working for free if you don't or you're hiring someone else to do it) on a $700,000 property is a really low rate of return.  I don't know what type of loan you used to purchase it... but assuming you paid ~$500K and have 25% down, you've probably invested about $125K + $75K in rehab.  $650/mo cash flow x 12 months = $7,800/yr.  If you only consider your $125K downpayment, your payback period is 16 years.  If you consider the rehab costs, that payback period is almost 25 years.  

Honestly, you might want to consider selling both and investing in something with better cash flow and run a better analysis when looking at acquiring a property.  Just my two cents...

@Dan Handford is right... if you don't know where to look for comps for mixed use properties then you should probably call up a broker that can help you. For example, its not as simple as looking up on Zillow for a property with an office + residential usage... you have to look at comp sales that may be on the local MLS, the local CIE, or one of the big sites like CoStar/Loopnet. Not all of that information is readily accessible and might take some digging. Take a look at some recent sales/leasing of small office buildings in the Lowell area and give a few brokers a call to see if any of them can give you a better idea of value on the property and then gauge the local rental market on Craigslist to ensure your numbers make sense.

Congrats @Nick Hamel on taking the leap and publicly committing to buying your first property!  I learned a lot from listening to BiggerPockets podcasts and reading the forums... there's a lot of great resources here... especially with analyzing/gut-checking if a deal makes sense or not.  

I can't speak as much to the Southern Maine market, however speaking to the market in the New Hampshire seacoast, it varies wildly depending on how far you travel away from the whole 18 miles that make up the NH coastline.  For example, property values in the Portsmouth/Hampton area are some of the highest in the state and it can be very challenging to break into that market.  Moving up Rt-16, the Dover/Durham/Somersworth area tends to be more affordable but still has climbing prices because of the economic growth in the region.  Further north in the Rochester/Farmington area, prices are fairly low, rentals are more frequent, but appreciation is minimal and the market has been "on the edge of growth" for decades.  Every market has its nuances there and I think a deeper dive into that by discussing with more local investors would be helpful.  

As @Harrison Smith mentioned, there's a meet-up in Southern Maine that can help you understand that market.  I've seen a few posts over the years for a NH seacoast based meeting (here's a recent one: https://www.biggerpockets.com/forums/521/topics/60...) that you may want to check out.  Further out in Manchester, the NHREIA meetings (www.nhreia.com) usually have a showing of 60+ people and may be worth the trip sometime.  We've had a few seacoast folks attends every now and again.  

Overall, the best advice I have is that, while its great to commit to buying a rental property this year, make sure that you focus on the numbers and don't oversold on the hype of owning a property.  Its all about the numbers!  

Best of luck and feel free to give me a shout if you have any questions :)

Welcome to BiggerPockets @Justin Wilson!  I've heard a lot of investors express the same complaints of looking out-of-state because of the prices in the Boston area.  I've had a few folks come north over the border to NH to look at investing here due to lower prices, strong rents, and more landlord friendly  laws.  Clearly you've been quite successful with maintaining rentals across long distance however, so kudos for that!  

Network with people local to those markets and ask lots of questions on the local forums!  That's one of the best ways to get deals and "on-the-ground" professionals in those markets.

Happy investing!

You need to network more @Patrick Philip.  As a real estate agent, when I have a listing coming up that is a larger value-add apartment building, I go call up people in the following order:

1. My top client list with buyers I know can perform
2. Broker colleagues I know that have buyers that perform
3. My buyer list with people I haven't done business with or don't know as well
4. Public marketing (MLS, Loopnet, CREXi, etc.)

I'm sure many other brokers probably follow a similar model.  If I know a buyer can buy something and they have cash in the bank and don't complain about every little issue in a property, I'm going to call them first.  If I know a broker that has a client that buys and doesn't back out, I'm calling them next.  In deals where the seller is in a distressed situation and wants out, I'm going to call the "closers" first even if it has a lower sale price because ultimately, dealing with unfamiliar buyers is not always worth the headache for the seller.  

Get to know brokers in your market that sell apartment complexes and show them that you can perform and you don't back down.  Show them you have money in the bank, you have a lender lined up, and that you know what you're looking to buy.  

Hi @Felicia Mancuso, this varies a little depending on the market, but seeing as you're over in Worcester and I'm up here in NH, we have pretty similar market conditions (though prices certainly differ).  

The biggest difference between a 2 unit and a 3 unit when it comes to owner-occupants is cash flow.  Its very rare in my market to find a two-family building that supports itself and actually makes a decent profit after an owner-occupant moves out of the property.  I find more frequently with three-family properties or four-family properties that one can usually break-even when you're living in one unit and renting out the others, and once you move out, you end up positive in terms of cash flow.

The next big difference is ability to "repeat" the owner-occupied process through the same type of financing. Typically an FHA loan is used to owner-occupy a multifamily for a low downpayment (3.5% minimum). However, you can't infinitely rinse and repeat buying multifamilies with this strategy... you have to "improve your quality of life" by purchasing a new property. For example, moving from a four-family building to a side-by-side duplex is an "improvement" in your quality of life because you have less neighbors and you're in an arguably nicer home. Unfortunately the government doesn't view increasing your cash flow as an increase in QOL. So you can move down the chain from 4 to 3 to 2 to 1... but can't move up the chain from 2 to 3 to 4 using the same low downpayment loan product.

Lastly, I would say that the property values for 3s vs 2s can be important to know. For example, most properties in my market don't increase in value at exactly the same rate for every extra unit... So a duplex isn't double the price of a SFH and a triplex isn't double the cost of a duplex... normally as unit count goes up, price per unit goes down... meaning you can afford to buy more at a better price.

618 Prescott St | 3 Unit | For Sale | $289,999

ADDRESS:  618 Prescott Street, Manchester, NH 03103

PRICE:  $289,999

UNITS:  3 (3BRs)

2018 PROJECTED INCOME:  $35,100

2018 PROJECTED EXPENSES: $9,783

PROJECTED SALE CAP RATE: 8.7%

CAN BE OWNER OCCUPIED:  YES

DESCRIPTION:  This well-maintained, three-family property is located in a quiet area and set back from the road. While this building is currently fully occupied with multi-year tenants, this provides a great opportunity for an owner occupant as all tenants are on month-to-month leases. The owner has invested a lot of money into the building including separating all utilities in the building, renovating all of the apartments, installing gas parlor heaters less than five years ago, installing hot water heaters less than five years ago, separating electric circuit break panels for each unit, and putting on a new rubber roof on less than ten years ago. Each apartment also features "backup" electric baseboard heaters just in case anyone isn't feeling warm enough! As an investment, this building has a solid rent roll with some potential to grow, pulling in approximately $35,000 a year in income, and with separate utilities, expenses run under $10,000 a year! If you're looking for a great opportunity to live rent-free, consider this investment your next home.

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Matthew Lefebvre

Elm Grove Realty

M. 603-554-2309 | O. 603-505-4900

[email protected]

NH License #070207

KEYWORDS: nh, new hampshire, ma, massachusetts, manchester

232 Bridge Street | FOR SALE | 8 Unit Investment Property

ADDRESS:  232 Bridge Street, Manchester, NH 03104

PRICE:  $595,000 - $74,375/unit

UNITS:  8 (6 & 2)

2018 PROJECTED INCOME:  $79,896

2018 PROJECTED EXPENSES:  $19,882

PROJECTED SALE CAP RATE: 10.1%

DESCRIPTION:  This well-maintained, professionally managed, 8 unit property is a stable investment with some room to grow! Comprised of a six unit building and a two unit building on the same parcel, all of the apartments in this property are two bedrooms that pay their own heat, hot water, and electric bills! In addition to a paved driveway with off-street parking, attached to the two-family building is a three car garage providing additional parking or potential for extra income! The annual income for this property is almost $80,000 annually and the low operating expenses of under $20,000 provide a great opportunity for a profitable investment. 

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Matthew Lefebvre

Elm Grove Realty

M.  603-554-2309  |  O.  603-505-4900

[email protected]

NH License #070207

KEYWORDS:  nh, new hampshire, ma, massachusetts, manchester

Try Jeff Boufford from Boyd & Boufford Insurance.  I know he's written policies for several of my colleagues over in the seacoast, even though his office is based in Amherst, NH.