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Old 11-13-2008, 01:04 PM   #1
wMw
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Default Converting a Single Family house to a 2 Family...any thoughts?

Considering the current economy (mine and the country's) I have been thinking of different ways to cut my expenses and/or increase my income. The people who bought my business in the White Mountains have fallen on hard times and asked me to let them defer payment for a year or two. I could demand payment, but they just don't have the money right now. This has put me in a real bind. My income is now less than my expenses and the company I work for will unlikely be offering raises this year.

I reluctantly put my house on the market, but a buyer has yet to come along. One thought that I had was dividing my house into two units and renting out one. I checked with the city of Laconia and 2-families are permitted in my neighborhood (Weirs Beach). Does anyone have a recommendation for a builder who might be able to do this?
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Old 11-13-2008, 02:07 PM   #2
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Default

As an alternative, how do the prices look for winter apartment rentals look in your area? You might be able to rent your house weekly to the winter sports crowd and make a bit of profit. Many Realtors in your area do this sort of thing.

I know two couples who did this, one for summers only and the other had a year-round (capable) house they decided to rent for a few weeks this summer and liked the result they kept it on the market until Columbus Day. Their rental-agent tried to talk them into doing winter rentals too but they decided to winterise the place for now.

Good luck!
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Old 11-13-2008, 02:36 PM   #3
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Default Hmmmm....

Renting it out is an alternative. I would have to find a place for me to live at least for the winter. I do have a place to stay in Jefferson but the commute through Franconia Notch to my job in Lakeport could be a nightmare at times. I am meeting with a rental agent next week to discuss options...The division of the house would leave me with a place to live and have another to rent but it would cost to get it set up...walls, a 2nd kitchen, etc. Moving out and finding a small winter rental might be a good option for me if I could find the right tenant.
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Old 11-13-2008, 02:51 PM   #4
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Default Stop spending...

Where's the money come from to pay the contractor? And what kind of "margin" is there on the rental, assuming a tenant can be found and is also able to pay their rent? I would personally be looking at ways to preserve capital rather than assume additional debt in hopes that the plan comes together to allow you to pay it off.

And rather than your buyer deferring payments, how about getting them to continue payments, but in a smaller amount. Keeps their skin in the game, reduces your exposure, and has the potential to bridge at least some of the gap, if not all.

Last edited by kjbathe; 11-14-2008 at 11:01 AM.
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Old 11-13-2008, 04:19 PM   #5
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Default ...become a real estate sales agent!

How to increase your income and live in the lakes region? Enroll yourself at www.charlinemason.com real estate pre-license course, held at Exit Realty, Laconia, across from Walter's Market, and start your way to the 'Big Money' by selling waterfront homes.

Piece of cake.....nobody is trying this...and there is no competition!
..........

Enroll yourself at Plymouth State University, become a state certified teacher, and start teaching your preferred subject at the local public school.

New Hampshire has the most expensive tuition for state universities in all fifty states.


....short hours, vacations, summers off, health insurance and a pension.
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Old 11-13-2008, 06:21 PM   #6
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For converting to a 2 family there are options. With the whole building & real estate market in the ...... there are quite a few builders and many trades people dying for some work. My son just hired an out of work union carpenter do some work for him on a house he and his wife just bought. Cheap labor because they need the money. So converting may cost some $$ but it may be much less than you might expect. The materials is another question as I do not think that has dropped in price yet.
Of course my son also got me into the deal to do some of the tile work and experience advice on the rehab of this "Jack The Home Owner Did It" property which saved him a lot.
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Old 11-13-2008, 06:37 PM   #7
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Quote:
Originally Posted by Just Sold View Post
For converting to a 2 family there are options. With the whole building & real estate market in the ...... there are quite a few builders and many trades people dying for some work. My son just hired an out of work union carpenter do some work for him on a house he and his wife just bought. Cheap labor because they need the money. So converting may cost some $$ but it may be much less than you might expect. The materials is another question as I do not think that has dropped in price yet.
Of course my son also got me into the deal to do some of the tile work and experience advice on the rehab of this "Jack The Home Owner Did It" property which saved him a lot.
Make sure that the person he has hired has a license even if it isn't required. Materials have gone way down, but the jobs have also so the lumber yards are not selling and are in big pooh as they have contractors that are not paying what they owe and are about to close their doors.
Make sure all the I's are dotted and the T's crossed with all the town agencies as one may say it is OK and another can say well you need this and this and oh ya you need this. The biggest thing is, if you are on a septic system that can be the killer as those cost haven't dropped and you will need it as you're going to a single family to a 2 family which will increase the septic leach field and the size of tanks.
Good luck with your endeavors.
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Old 11-13-2008, 07:05 PM   #8
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wMw...

Just because 2 families are permitted, it doesn't mean it will be approved especially here in the Weirs! You will need to go before the planning board and the zoning board. Unfortunately, you just cant divide a house and run with it. There are all sorts of considerations.. is your lot zoned for two family, existing sq footage of the current house, proposed sq footage of the finished apts, lot size, parking, fire prevention (sprinklers req'd?) fire exits, septic situation etc... I dont know if you have a mortgage, but the bank might not be too keen on converting the property as its a change of use, this may void your mortgage.

You will need some concrete plans drawn up to present to these boards...

You might be better off getting a reduced payment (as mentioned above), or perhaps renting your place in Jefferson. I think you might be in a position of dimished returns should you commence this project. Oh and lets not forget if you happen to get a jerk tenant the eviction laws favor the tenant and it can take up to a year to evict a tenant.

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Old 11-13-2008, 08:24 PM   #9
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Default Solvency while in extremis...

Quote:
Originally Posted by wMw View Post
"...Moving out and finding a small winter rental might be a good option for me if I could find the right tenant..."
"The right tenant" IS the problem. Your renters might eventually face the same situation you've got! (Though I think renting your place out is the best solution). Even with a wall, there can be excruciating times due to noise, drunkeness, "roommates"—well, just call it "incompatibility issues".

Assuming you're single?

A savvy sailor-friend who got divorced lived aboard a moored boat while his ex had the house.

He got to enjoy life at the mooring, even rowing out to the sailboat in the wind and rain for two years. Cooking was by alcohol stove, just like being at sea. Except for getting struck by jumping fish, the best part was being in the middle of Mother Nature's wonders. The worst problem was condensation that formed inside the hull when it got cold: moving to the marina's dock (and a small space heater) solved that for two Connecticut winters.

In the South, old cruisers are sometimes stored in rural back yards and wired and plumbed as rentals.

In that line of thought—and because US financial conditions could become extreme in the coming year—you might consider an inexpensive on-site camper for yourself and rent out the entire house to a family. Any on-site issues with the town might be overlooked due to difficulties faced by other residents experiencing even worse hardships.

A motor camper would allow you to stay overnights at/near your place of employment on occasions best for you, rather than the long commute north to Jefferson.

For the past ten years—after a few deadbeat renters—I started advertising rentals while demanding a full-year of rent in advance. (Reducing the rent as an incentive).

I got a couple of surprise tenants, including a 2-year lease with someone's "kept woman"!
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Old 11-16-2008, 09:43 PM   #10
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Default Lots to think about

Between having to get a new transmission in my car (Ughhh!) and being too busy at work, I haven't been online for a few days. Thanks for the many responses. Yes, lots to think about.

kjbathe...You are right! I shouldn't get involved in a plan that requires more spending...and your idea for me to ask my buyers for a smaller amount if they can't make the full monthly payment is a very good idea that I had not considered. I will present them with this option the next time we get together.

fatlazyless...I've never been a very good salesman...I always hated the door-to-door stuff they made us do in school. HeHeHe...of course the kids today don't have to do that. The mom's and dad's just take the stuff to work and try to get their co-workers to buy all those cookies and magazines. I did actually consider taking Charlene's course a few year's ago but decided I wouldn't be happy trying to sell, sell, sell. But I guess the commission on one of those mega-waterfront homes would be more than I make in a whole year at my current job.

Just Sold, RLW and Woodsy...My house would be an easy divide (assuming that I planned to include utilities in the rental portion to avoid splitting out the electric and the heat), just two walls about 5 ft wide. The main expense would be adding a 2nd kitchen. I did talk to someone in city hall a while back about this and was told that I could do this but I would need to get a variance. The house is on city water and sewer so there is no septic issue. I'm a bit intimidated by the rules and regulations because it is not clear to me what all the legal steps would be. I do realize that sometimes the different departments you have to deal with at city hall don't always seem to be working together.

Acres per Second...I am leaning towards the "Moving out and finding a small winter rental " option and renting out the whole house, even before talking to the rental agent. I have tried having housemates. It is hard to find someone that is a good fit. I did have good luck with some of the foreign students that came into the Weirs a few years ago. I didn't take any in last summer because I thought my house would sell and then they would have had to find another place to live.

I imagine you are assuming I'm single because if I weren't there should be another source of income coming into the house. Yup! A 2nd income would solve the problem, but I can't see getting married just to get the bills paid. That might bring some bigger headaches!! and I don't have a boat, but I love your camper idea.

Thank you all for your input.
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Last edited by wMw; 11-16-2008 at 09:46 PM. Reason: Just trying to make it a bit easier to read
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Old 11-16-2008, 11:41 PM   #11
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Enroll yourself at Plymouth State University, become a state certified teacher, and start teaching your preferred subject at the local public school.

New Hampshire has the most expensive tuition for state universities in all fifty states.


....short hours, vacations, summers off, health insurance and a pension.
Have you ever lived with a teacher? Just because school gets out at 2:30 doesn't mean it's short hours. For one thing, I have to be there by 7:00 - which is still a 7.5 hour day, just including contracted hours. Then there are meetings with administration, students, parents, and clubs - some contracted, some stipended, but most volunteered. I am lucky to think about leaving by 3:15 - and then it's time to begin grading and preparing the next day's lessons for my 120 students in 3 different courses. I average another 35-40 hours of work a week outside of school. During "vacation" weeks, I often catch up on grading. Those weeks my work might be limited to 15 or 20 hours.

Then there are the required courses that I must take to keep my certification current. Outside the master's degree that is now required within 5 years of beginning my career, I have to take 2-3 courses a year for the next 10-15 years before I can breathe and "coast" to retirement. Those courses, outside of the time it takes to complete the work, have to be paid for by me. Check the graduate tuition rates at your state university system for an idea of how much comes out of my pocket each year.

And as for the summers...well, I work a summer job to help pay for those courses. Lucky for me, it involves me being on the lake. I could make more elsewhere, but I made a tradeoff.

Believe me, nobody is a public school teacher because they can get rich, or because of those "summers off". At least not long.
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