Homeowner · Woburn, MA · Member since 2014 · 7 posts · 3 votes
Hi everyone:
I'm brand new to the forums and to real estate investing.
I'm interested in buying and holding multi-families but they are very expensive where I live (just north of Boston, MA in Woburn). It looks like when they come on the market they're in the $500k+ range. For my first purchase, I'd like it to be in the $150k - $200k range, but they are located very far from my house. How important is it to purchase properties close to where you live? I'm afraid I wouldn't know the area very well if I strayed too far from where I live.
I'd love any advice especially if you know the Boston market. Thanks!
I'd stake out an area in Massachusetts and become an expert there.
Previous recession I had a member of our Investors Association with property in Chelsea, Framingham and Fall River. First mistake he made, as margins got thin, was to take over his Property Management....
I guess the first question is what do you consider far from your house? You can by multis in Lowell in that general price range. There is about a dozen active MLS ones for under $250K, some under $200K that are fully rented. If you are willing to take on a project the ones down under $150K need lots of work but could be good deals if you get the price down a little more.
You can invest in like NH where the cash flow is often better then in MA and the landlord laws are less skewed towards the tenants.
If you really want to get max cash flow you will need to get on a plane to see places that will do that. The local area is a nice long term play as we appreciate pretty well over time compared to most areas (Hence the stupid high prices in relation to the rents in nicer towns like Woburn).
I think you can learn an area that isn't in your immediate area but the issue will be management. If your managing them yourself I think you will find that your just a better, more responsive landlord if you are close. I have two places, one is 2 miles and one is 20 minutes away and I'm not sure I'm in a rush to get into a place much farther than that. When that phone call comes you don't want to be an hour away.
I am targeting some fairly distant markets. I actually have a property in South Boston, not too far away but it takes a while to get in because of traffic and parking. I have another that is on the Cape, 85 miles away. I'm looking in Worcester, North Conway, and parts of Maine.
But they are all places I am familiar with and places I know I can set up systems fairly easily. Cuts in on the cash flow but I look at this as a stepping stone to my long term goals.
@Shaun Reilly and @Brett C. both make great points. I'm sure you'll find more as explore and participate on the forums.
I'd stake out an area in Massachusetts and become an expert there.
Previous recession I had a member of our Investors Association with property in Chelsea, Framingham and Fall River. First mistake he made, as margins got thin, was to take over his Property Management....
Check out the free BiggerPockets Podcast - A weekly podcast with interviews and a ton of great advice. And you get the benefit of having 50 past ones to catch up on.
Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info.
Consider checking out HUD homes for small multi's owner occupied gets first crack.
You might consider Niche or Specialized Housing like student housing. Rents can be 2-4 times more. Remember you don't have to own a property to control it.
Good luck
Paul
Go to IREM.org search for ARM certified property managers. Call 5 ask them what sides of the city they like/dislike and why. Ask what they see them selling for and what expenses are by category. Ask if they know anything coming up for sale.
This is a discussion I had with my wife when we were looking for an investment property. There were some really good deals about 40 minutes from us but I was not interested. I told her if a pipe breaks (generic example) and a tenant calls, I don't want to be that far away. Our investment property now is only about 15 minutes away from our home. I would consider properties further from our home in the future with the help of a management company.
@Kristopher K. Are some of those areas that you are investing such as North Conway, Maine and the Cape for vacation rentals? What areas of Worcester (zip codes, neighborhoods) do you invest in? Do you have management companies in all of these locations? I am also looking to invest away from home, but would really appreciate some insight into your "systems" for managing from a distance.
@Brian Ortins , I actually am looking for combination properties in those areas. For instance the one I have at the cape is one seasonal and one yearly.
As far as Worcester, mainly I am looking around Elm Park, Indian Lake, and over between Worc State and Salisbury St. but am considering other areas too, including some towns around Worcester.
Unfortunately I am the management for now but I only have the Southie and Cape properties. The seasonal unit at the cape will come online this year. If/ when I get something up North I will look into mgmt companies up there. In Worcester I'll hire based on needs. Cape I am not decided yet...let you know soon on that!
My real point in the post was that they are areas I know. I grew up around Worcester, spent a lot of summers on Cape...Dennis specifically, and have spent a lot of time in NH and parts of ME. I have family in each area also so I know setting up the systems will be easier. Aside from North, the commute or distance isn't a big deal to me yet. I have to develop the systems as I go because this is not full time for me.
I am far from what I would consider "experienced" so certainly take this all with a grain of salt. It's just my perspective. On the other hand I'd never look at something like a turn key in CA because for me that's too far but there are plenty here on BP that do things like that successfully. My "local" market is beyond my reach right now so I'm simply expanding my farm areas. More work, sure. Less cash flow, sure...but it's a start. I'm not afraid of putting in a little extra effort.
Hope that all helps in some way, if not shoot me a PM.