Wednesday, August 13, 2014

Are your in-laws or parents thinking about relocating to be near the grandkids?

Do your kids wish their grandparents lived nearby?

Are your in-laws or parents thinking about relocating to be near the grandkids?  

Over the past 10 years, my wife and I have noticed a tendency of parents of our peers to move to NH to be closer to their adult children and grandchildren.

Does this sound like you?    You’re married, with a couple of young kids, living in the Boston area, you and your spouse have successful careers.  Birthdays and holidays often involve a plane ride or a long drive to see extended family.

And does this sound like your in-laws or parents?   Successful in their own right, retired or semi-retired, but definitely not ‘old’, shifting priorities, a desire to be near the grandkids to share their love and wisdom. Maybe on a recent visit the idea came up, ‘How would you guys feel if we moved closer to your family so we could see the grandkids more often?’  You and your spouse thought about it and decided that, actually, it would be great to have family around.  

So what now?

As I looked back over the blogs I’ve been writing this year, there is a storyline that speaks to your situation.   Here are some themes that might help you and your parents (or in laws) figure out the next steps.

1)      Savinghalf a million dollars by moving to New Hampshire.   This blog looks at real estate prices and cost of ownership as a function of distance from downtown Boston.   The bottom line is that Southern NH is a great solution to get the most house for the dollar while still being a convenient distance to Boston.   And, it may provide just enough separation so that you and the grandparents are close but not too close.

2)      Top20 Reasons to live in New Hampshire.   This is pretty self-explanatory but one thing that jumps is the tax structure, particularly for retirees with some consulting income and significant capital gains.  New Hampshire is a no-brainer versus Massachusetts.

3)      Rightsizingyour home.   This blog talks to the advantages and economics of buying a house that fits your current lifestyle.   It can be extremely freeing to finally let go of that huge house and get into something new and more manageable.    And it can also free up equity and cash flow to finally splurge on those trips and experiences your parents have been talking about for so long.

4)      Top 5 reasons an over 55 community may not be right for you.   Your parents may be over 55 but they aren’t ‘old’.   And the last thing they want is to be surrounded by a monoculture in an adult community.   Our subdivision, Skyview Estates in Pelham, NH provides many of the advantages your parents would be looking for – luxurious single story living, smaller lots, gorgeous views, and other community benefits while still being an unrestricted, diverse neighborhood. 

Wednesday, July 2, 2014

Top 5 reasons an over 55 community may not be right for you

Over 55 communities are a great solution for many retirees but they are not for everyone.  In this blog post, we take a look at the top 5 reasons an over 55 development may not be right for you.

  1. Variety (of ages) is still the spice of life.  According to Deborah Diane, Baby Boomer Retirement blogger, “some people like living in a community where there are mixed ages.  They enjoy seeing children in their neighborhood, as well as young couples who are just starting out.”    There is a vitality that comes with a diverse neighborhood.  For some, living among “Seniors only” just doesn’t feel right.
  2. Kids and grandkids not welcome.   Many adult communities have strict covenants particularly on grandchildren.   For some families, it may be a necessity to have grown children and/or grandchildren live with them for an extended time.  Who can predict life’s turns – sickness, divorce, unemployment?  And what greater joy is there than for a grandparent to spend time with their grandkids and help nurture them into successful adults?   In our case, my wife and I made a conscious decision to settle close to our parents, so that our children could enjoy the influence of their grandparent’s love and wisdom.
  3. High fees.  Many over 55 communities have great amenities – golf, swimming, tennis, clubhouses – but these all cost money.   It is not uncommon to pay hundreds of dollars per month in fees.  Do you really want to be paying for a community pool that you seldom, if ever, use?  It’s important to evaluate how much those amenities mean to you and whether you want the long term liability of maintenance and capital improvements.
  4. Cookie-cutter homes on postage stamp lots.   You’ve worked long and hard to reach this point in life and achieve success.   Sure it makes sense to rightsize, (see my blog post on rightsizing your home for a happylife), but do you really want to be living in a row of identical homes where you can reach out the window and touch your neighbor?    There are many well designed adult developments, but there is something to be said for the elbow room and custom home feel of an elegant single family home community.
  5. Tougher resale.   Even if this is the last home you intend to buy, future resale value should still play a role in your decision making.  In an adult community, the rules and regulations imposed by the Condo Association inherently limit your market of potential buyers.  Age restrictions, pet restrictions, fencing/landscaping rules, parking, long term guest bans, etc. are all potential negatives.  Consumer's want choice and flexibility.  

At our Skyview project in Pelham, we attempt to strike the balance between the simplicity and benefits of an over 55 community while keeping fees to a minimum and offering a diverse, vibrant single-family home community in a phenomenal location.   

We offer gazebo areas with sunset views over the mountains, community gardens, open space and hiking trails.  Our lots are smaller than a conventional subdivision, averaging 0.7 acres, but large enough for privacy.    And our ranch model, The Currier, has all the convenience of luxury single story living with an open concept floor plan and the craftsmanship of a true custom home.   Here in New Hampshire we say – “Live free and thrive!”

Wednesday, June 25, 2014

Are you afraid to buy a house?

Recently, for the nth time, I was listening to a housing economist discuss the Millennial generation – again predicting that they will be a generation of renters.   I heard the well-worn litany of arguments: this generation witnessed their parents get burned on their homes during the recession,  Millenials don’t believe that homes are an investment, they have difficulty getting mortgages, they are forming relationships later in life, etc., etc.    I agree that in the immediate aftermath of the housing crisis, these factors were true and valid.   But these issues are temporal and rapidly fading – and certainly not a permanent condition of the Millennials.

My experience is this: young people have recovered confidence, want to own a home, can now get a mortgage and, most importantly, are smart enough to know that buying a house is a no-brainer.   I also believe they have acquired wisdom from observing their parents: they want smaller, greener, lower maintenance homes - a home that works for their lifestyles and priorities.  (see my post on rightsizing your home for a happier life

With the proliferation of rent-versus-buy calculators, I was curious to check the numbers for myself.   I took a look at buying a house in our project, Skyview, as compared to renting a similar home in the area.   In my analysis, I took the ‘no investment’ perspective of the young buyer and assumed zero appreciation over 15 years.   At first glance it appears that home ownership is more costly than renting -- by about $4k per year.  (check out the numbers below)   But when you compute the interest tax deduction and the equity from your mortgage principal, you save $22k per year versus renting!    Over 15 years, that’s $332,000.

Now, let's be a little bit optimistic on home appreciation.   Even taking the recent housing crisis into account, long term home price appreciation roughly matches the rate of inflation.   Three percent per year seems to be a generally accepted long term housing appreciation rate.   If you add this appreciation into the analysis, your home value increases from $429,000 to $668,000 in fifteen years.   The overall difference between buying versus renting with 3% appreciation exceeds $572,000!   So Millenials out there, consider this: if you  earn $90,000 a year, that equates to 6.4 years of working. If you value your time and life balance, 6+ years is a lot of time to sacrifice.  Even more striking, according to a recent Gallup Poll, the average retirement age is 62 and the life expectancy of someone born in 1985 is just under 75 years which equates to 13 years of retirement.   By this analysis, if you own a house for 15 years, you could potentially increase your retirement years by almost 50% from 13 to 19+ years.

So don’t be afraid to buy a house – be more afraid not to!      

In this analysis, I only looked at a 15 year period and did not take into account the incremental investment income that can be derived from the savings.  As you take these additional variables into account, the argument for home ownership only gets stronger.

I don’t pretend to have a crystal ball for the future.   We could have another housing crisis and homeowners may be under water again.   Or, we may high inflation due to all the government spending since 2008 and owning a house may become all the more important as a hedge.   Nobody knows and each person has to make their own decision and risk calculation.   But I know that Millennials are more intelligent than the current conventional wisdom reflects.

As always, comments and counterpoints welcome.  If you want a copy of this spreadsheet, just send me an email.   Check out Skyview

Thursday, May 22, 2014

What's the right size home for you? The Rightsizing Equation

There is a significant trend toward smaller homes amongst both empty nesters and young families.    The generally used term is called downsizing--but I prefer “rightsizing.”   I’ve always been a big proponent of efficiency – sometimes to the chagrin of my wife (why cook in early December when you can make at least 7 different meals using leftover turkey?).    Our family recently moved from a 3500’ McMansion (which would be considered on the small side considering the trend of the last 20 years) to a smaller cape which we renovated  -- and  the space feels larger and better utilized. (For some great examples of this, read about architect Sarah Susanka’s concept of the “not so big house” on her website

There are a number of hard facts that make rightsizing a compelling argument.  Empty nesters moving to a smaller home can realize the economic benefits of lower mortgage, utility, tax and maintenance expenses while at the same time not feeling enslaved to the care of feeding of a large home.    Just as importantly it improves quality of life.   Not to mention the fact that equity from the sale of the larger home can be deployed to provide incremental investment income.

For younger families, there has been a general shift in sensibilities.   Bigger is not necessarily better.    A well-appointed, efficient home that is green and consumes fewer resources are the priorities.  Just as with the older set, the young families want a home that is a component of their lives but doesn’t rule their lives.  Along with this is the renewed interest in community, common spaces and neighborhoods where people of all ages have opportunities to interact.

In this post, I wanted to explore the hard numbers around the generally accepted notion that rightsizing for empty nesters saves money.   After some consideration I decided that there are really two independent scenarios to look at:  1) the cost reduction model and 2) the investment income model.

In the cost reduction model, I looked at a comparison between the estimated costs of ownership of the 2054 sq foot “Currier” model home at our Skyview project versus a larger, 5500 sq foot home in the same area.  We see this scenario playing out each day as buyers look to move from homes within Skyview’s town of Pelham, from the Boston area, or from other affluent communities in New Hampshire.    I assumed that all other variables were consistent between the two homes and did a rough estimate of utility cost based on square footage.  The net savings by rightsizing is $33,000 per year.  

In the second scenario, I assumed that equity in the larger home  could be invested to produce investment income.    In this example, I assumed $400,000 of equity in the home based on the current market value less the current mortgage balance.   For capital gains tax, I assumed a 25% long term capital gains tax rate X the difference between the sales price and original purchase price.  After subtracting  sales commission and down payment for the new Currier home, more than $290,000 is left for investment.   At a 7% annual return, that equates to over $20,000 in annual investment income.   

Every situation is different.   If you’d like a copy of this spreadsheet, just send  me a quick email or connect through our Skyview website.   Regardless of your particular circumstances, rightsizing your home can make a lot sense both economically and in your quality of life.

Thursday, May 8, 2014

Can you still save half a million dollars by moving to New Hampshire?

This is an update to a post I published last May.   In the last 9 months, home prices in Boston have continued to rise.   So, I re-ran my original analysis to see if you could still save half a million dollars buying in NH versus MA.  Read on...

The Boston area residential real estate market is hot -- driven in large part by the enormous resurgence in tech and life sciences companies.   This infographic illustrates the variable of commuting distance from

 downtown in determining home price. If you work in Boston or Cambridge, New Hampshire may seem a world away but it's only 34 miles to Kendall Square.  You would be surprised at how many executives who work in Boston, Cambridge, Burlington and Waltham live in southern New Hampshire.

I recently became involved in residential development in southern New Hampshire with our Skyview project. Real estate agents kept telling me about the perception that Massachusetts buyers had about high property taxes in New Hampshire.   That got me looking at property taxes and other factors that contribute to cost of living differences between NH and Mass.   I came up with the following calculator that takes into account housing costs, tax rates, salaries, commute cost and a number of other factors.   The results were pretty compelling - not only were absolute property tax dollars LOWER in NH but the 15 year savings were over half a million dollars.

Now, my assumptions may be a bit off and not all situations are the same.  I'd love to hear feedback.  (If you want a copy of the actual spreadsheet to play with - send me an email.).

Granted there are big differences between living in Cambridge, MA and Pelham, NH.   But the difference between living in Westford and Pelham are far less dramatic.  In fact, many Massachusetts and even New Hampshire residents aren't fully tuned in to the advantages of the New Hampshire living.   See my post on top 20 reasons to live in NH.   Sure, the commute is a bit longer if you are heading south but the traffic between the NH border and 495 is relatively easy as compared to downtown Boston.

So, take a look and let me know your thoughts.   And if you are interested, check out our awesome homes at Skyview - where by the way you can see the Prudential center from the top of the hill!

This post originally appeared on The John Gargasz blog @

Friday, May 2, 2014

Top 20 Reasons to Live in New Hampshire

I am an avid supporter of the burgeoning startup ecosystem in New Hampshire through 10X Venture Partners, the Granite Fund and Techout NH.  I am also active in the local real estate market and we just launched a new residential subdivision  -  Skyview.  It strikes me that the message of everything NH has to offer doesn't get out enough.   This post talks to the well known and lesser known benefits of New Hampshire living.     

New Hampshire reaches national prominence once every 4 years with the first in the nation presidential primary.   While we may fade from the national consciousness between elections, New Hampshire is a phenomenal place to live with close proximity to Boston, the mountains and the ocean.   The Live Free or Die state has the lowest tax burden in the nation as a percentage of gross income but that's only part of the story.  Here are a number of other great reasons to consider the New Hampshire lifestyle - many of which will likely surprise you:

1   Sales Tax
New Hampshire has no general sales tax.
Source: NH Department of Revenue Administration
2   Income Tax
New Hampshire has no general personal income tax. Dividends and interest are taxed at only 5%.
Source: Bankrate
3   Capital Gains Tax
New Hampshire has no capital gains tax.
Source: Area Development Online

4   Small Business
New Hampshire is friendly to small businesses and entrepreneurs. New Hampshire is frequently among the top 5 in nationwide rankings of business-friendly states.
5   Median Household Income
New Hampshire's median household income of $62,647 is among the highest in the country.
Source: US Census Bureau
6   Low Unemployment
As of March 2013, NH unemployment is 5.7%; US average is 7.6%.
Source: US Bureau of Labor Statistics
7   High-Tech Jobs
New Hampshire is ranked 9th in the nation for percentage of high-tech jobs.
Source: TechAmerica
8   Retail Benefits
Retail businesses benefit from proximity to Maine, Vermont, Massachusetts, Connecticut and Canada as residents shop in New Hampshire to benefit from the lack of sales tax.

9   Quality of Life and Livability
New Hampshire has been ranked #1 in the nation for quality of life and livability 5 years in a row.
10   Safety
New Hampshire is the safest state in the country.
Source: CQ Press
11   Health
New Hampshire is the 3rd healthiest state in the nation.
Source: America's Health Rankings
12   Health Care Quality
New Hampshire is ranked 1st for health care quality.
Source: Federal Agency for Healthcare Research and Quality
13   Highway Safety
New Hampshire has the 3rd fewest fatalities per 100 million miles driven.
Source: Reason Foundation
14   Child Well-Being
New Hampshire is ranked 1st nationally in the index for child well-being.
Source: The Annie E. Casey Foundation
15   Vehicle Ownership
New Hampshire is the least expensive state in which to own a vehicle.
Source: Forbes
16   Schooling Options
New Hampshire offers many private/non-government schooling options, including home schools, Montessori schools, Waldorf schools, religious schools, boarding schools, and traditional private high schools.
Source: GreatSchools
17   Standard of Living
New Hampshire has the highest standard of living in the country (based on poverty rate, 2011)
Source: PSNH
18   Quality Education
New Hampshire 4th graders ranked 1st place in a national science assessment test.
Source: WCAX
19   Outdoor Activities
New Hampshire offers outdoor activities throughout the year, including biking, bird watching, boating, camping, climbing, fishing, golfing, going to the beach, hiking, horseback riding, hunting, skate boarding, skiing, and snowmobiling.
Source: NH Outdoors

20   Hiker's Dream
NH is a great place for hikers, boasting 48 mountains with peaks higher than 4,000 feet, access to the Appalachian Trail, and numerous trails of various distances and difficulties throughout the state.
Source: NH Outdoors

Check out Skyview homes by clicking here

Friday, March 21, 2014

Top 7 Reasons the US Government should be your VC

This blog post, Top 7 reasons the US Government should be your VC, is the first in a series on Doing Business with the US Government – Building wealth and doing good.

I had been an entrepreneur and business development executive in defense-tech for about 20 years before the light bulb really went on.   Why did it take so long?  Maybe because I had spent most of my career in a boot-strapped company and had only recently shifted to investing in other founder's companies where conversations of valuation, dilution and control came to the fore of my consciousness.  I was in Washington, D.C. listening to a pitch from a lobbyist who wanted our business.   He basically said, 'Forget venture capital!  The Government is your VC and my job is to help you raise capital.'   We didn't end up working together but he was right on the mark.   With a lot of work, the right approach and a little bit of luck, the Government can fund a significant portion of your company's growth.  Here are my Top 7 reasons to consider the US Government as a viable source of start-up funding.

1) It’s a massive market with capital to deploy. Most start-up companies talk about targeting multi-billion dollar markets. The 2013 US Government budget was $3.5 Trillion! Even when you take out debt service and mandatory spending, you are still have a number of enormous multi-billion dollar markets:

 Link to Wikipedia source

2)  Federal investment is non-dilutive.   When you take capital from a VC or angel investor, you are trading that capital for equity in your company.   But when you win a contract from the U.S. Government you maintain full equity.  You do give up certain intellectual property rights to the Government but there are ways to mitigate this impact (watch for a future post on IP and Government contracts).

3)  Time is NOT of the essence.   If you are solely focused on building a commercial product in a large competitive space where time to market is critical, then Government funding is probably not for you.   Plan to commit two years for that first significant contract win.   It can happen faster, but don’t count on it.  If you can be patient and work Government funding into your total business model, it can be a huge win.  I am an investor in Nanocomp Technologies, a carbon nanotube materials company.   They just won an $18.5m contract to build out their manufacturing infrastructure – but it took years to close even with a strong history of government business and compelling need for the product.

4)  More resources will be available for R&D.   With Government funding, you can invest in product development beyond your core product roadmap.  We all have more use cases and requirements than we can fund.   A Government contract can enable you to develop and test a new product derivative and market.

5)  Reliable cash flows.   The US Government is a great, creditworthy payer that will process your payment in days not months (at least at the time of this post).   By thinking ahead when you write your proposal to the Government, you can create achievable milestone payments that keep you cash flow positive throughout the contract.    Conversely, VC follow on funding can dry up in a hurry if you stumble.     

6)  Follow on Sales.  It’s not always the case but let’s presume that the Government has given you a contract to fulfill a critical need.   That first contract is typically going to be for development or a test buy.   If you really deliver the goods, you can grow that initial contract into a significant revenue stream that continues to offset the need for outside investment and generates real profit.    

7)  If you don’t do it, somebody else will.   This is a bit of a philosophical point but let me rant for a moment.  Despite the best efforts of many, the US Government is a huge, inefficient bureaucracy.    There are so many forces at play (special interests, politicians, lobbyists, major corporations, etc) that the budget is going to get created and spent no matter what.   If you have an idea that will save Government  money, make our nation more competitive, or reduce bureaucratic waste, then you should get in the game and deploy those government dollars effectively.