Ready to buy my first home in Massachusetts! Need guidance please.
Member since 2024 · 11 posts · 8 votes
Hello all,
I am located in Massachusetts and am looking to purchase my first home. I want an investment property as my first home where I live in one unit and rent the other units out. Unfortunately, there are not many multi-family homes in the area my girlfriend and I want to live in. Almost every residential area is zoned for multi-family (I have already checked and verified this) it just so happens that most of the homes on the market are SFH. I want to buy a SFH and convert it to a duplex.
Does anyone have experience with this and how can I go about finding a realtor that specialized in these conversions?
For those who have done a conversion of SFH into duplex how much would you estimate this costs?
Hey Aaron, congrats on getting started man! The good news is that you're in the race. One of my first investment clients was in this same exact situation in the midwest. They needed to lock in an affordable deal and they planned on converting whatever they found into a duplex and then living in one unit. We ended up finding a good deal off-market on the outskirts of a smaller town. It was a large older farmhouse, which had plenty of space for separate entrances and an upper/lower units, with bathrooms on each floor. In other words the units were essentially already there, they just needed some work. I would try to look for something similar to get your foot in the door.
The key in your situation is you're going to have to buy smart. Any sort of project like this is going to take cash, time, and energy. The good news is that this is totally do-able, but you're going to have to play it smart by buying smart, ensuring as best as you can that this property can attract and hold good tenants.
In the meantime, I wrote up a guide that teaches first time investors how to rent out their units from start to finish, no property management company needed. If you're interested I would be glad to send it over for free. Let me know your thoughts. You've got this man.
Thank you for the response. I would appreciate the guide.
Almost none of the SFH's in our area have finished basements - I'm not sure why that is. The regulations for every town we are interested in living in is that each unit has two egresses, which can be challenging with basement units. They all have a hatch which is one egress, but in order to get the other egress we would need to build out of a cement foundation which would be expensive. We thought it would be easier to divide a home in two on the ground and second floor because adding doors in wooden walls to make an exit would be easier and cheaper then having to make an opening in the foundation.
Hi @Aaron Landau biggerpockets would be a great source to find a realtor for this type of thing. But you may also want to look at some real estate meet ups in the area. Many times agents will go there to network.
I have never done a conversion of this nature myself, but I have to imagine that using the basement of these homes would be the cheapest way to go about it and creating a unit in them.
I would also potentially consider just doing the BRRR method on single family homes. If you're going to be doing rehab anyways it might make sense to do it this way rather than trying to retrofit an existing building. Good luck!
Hi Aaron,
Welcome to the site! I'm an investor and Realtor in MA and would be more than happy to provide some guidance if that's what you are looking for.
In the meantime, others have provided some helpful tips. Without knowing your location, it's easier to look at areas nearby to colleges. Offering up space for off campus living could be equitable for you. And as your equity grows, you could leverage this property to move into something full time and rent the entire place.
Split entry homes, raised ranches, et al could be possibilities as well. Properties that have a nice separation of living spaces make it easier to get started. Around what area are you located? There are many of these types of homes throughout MA.
@Aaron Landau I don't see that anyone has mentioned MA has a first time buyer program that may help you if this will be a live in rental where you rent. I am pretty sure you can find info on mass.gov although they are making it harder every day. It may give downpayment assistance and loan rate assistance. If you are in cambridge it might be difficult to find something affordable. One option may be to get an inlaw, what you can do with that depends on your town but you can't rent those after you move out. You have to be zoned for a two family so read the town website building code posting to see what is allowed. You could also branch out to areas with more MF.
@Aaron Landau Sometimes in a denser more populated area, it may be a little bit of a challenge to find a duplex. I would recommend looking in the greater area. For your first property, you may have to sacrifice and live slightly outside of your preferred area. For primary investments, you just need to live in the unit for 1 year to qualify for that sweet lower mortgage rate. If you are a first time homebuyer, I would recommend national programs like NACA. This organization is geared towards first-time home buyers and they are great at building wealth. They do have income limits and also have incentives to move into an area that you'd be making 80% more which would qualify you for a lower rate. I am not in your area but I am happy to extend help, best of luck and I'm excited for you!
@Aaron Landau Sometimes in a denser more populated area, it may be a little bit of a challenge to find a duplex. I would recommend looking in the greater area. For your first property, you may have to sacrifice and live slightly outside of your preferred area. For primary investments, you just need to live in the unit for 1 year to qualify for that sweet lower mortgage rate. If you are a first time homebuyer, I would recommend national programs like NACA. This organization is geared towards first-time home buyers and they are great at building wealth. They do have income limits and also have incentives to move into an area that you'd be making 80% more which would qualify you for a lower rate. I am not in your area but I am happy to extend help, best of luck and I'm excited for you!
Help or more information would be very helpful. I see that NACA offers a 5.75% interest rate which would be amazing.
@Aaron Landau I don't see that anyone has mentioned MA has a first time buyer program that may help you if this will be a live in rental where you rent. I am pretty sure you can find info on mass.gov although they are making it harder every day. It may give downpayment assistance and loan rate assistance. If you are in cambridge it might be difficult to find something affordable. One option may be to get an inlaw, what you can do with that depends on your town but you can't rent those after you move out. You have to be zoned for a two family so read the town website building code posting to see what is allowed. You could also branch out to areas with more MF.
Thank you for the suggestion. I just found the information on the mass.gov site. I will definitely look into this. Also, I am not in Cambridge - I did not have the option to put the actual town where I am looking.
Can you legally rent out an in-law suite?
@Aaron Landau depends on the area but most areas it is not an issue when you are living in the house, it would be like a roommate situation. However areas differ and definitely after you move out you can not rent it. It is better if you go for a two family but even a one family with roommate situation is an option
@Aaron Landau I don't see that anyone has mentioned MA has a first time buyer program that may help you if this will be a live in rental where you rent. I am pretty sure you can find info on mass.gov although they are making it harder every day. It may give downpayment assistance and loan rate assistance. If you are in cambridge it might be difficult to find something affordable. One option may be to get an inlaw, what you can do with that depends on your town but you can't rent those after you move out. You have to be zoned for a two family so read the town website building code posting to see what is allowed. You could also branch out to areas with more MF.
Thank you for the suggestion. I just found the information on the mass.gov site. I will definitely look into this. Also, I am not in Cambridge - I did not have the option to put the actual town where I am looking.
Can you legally rent out an in-law suite?
Yes. We legally rent out an in-law suite attached to our Cambridge home.
@Aaron Landau Sometimes in a denser more populated area, it may be a little bit of a challenge to find a duplex. I would recommend looking in the greater area. For your first property, you may have to sacrifice and live slightly outside of your preferred area. For primary investments, you just need to live in the unit for 1 year to qualify for that sweet lower mortgage rate. If you are a first time homebuyer, I would recommend national programs like NACA. This organization is geared towards first-time home buyers and they are great at building wealth. They do have income limits and also have incentives to move into an area that you'd be making 80% more which would qualify you for a lower rate. I am not in your area but I am happy to extend help, best of luck and I'm excited for you!
Help or more information would be very helpful. I see that NACA offers a 5.75% interest rate which would be amazing.
The process to qualify is very lengthy, if you’re looking to buy in the next month or two, this program is probably not for you. Otherwise if you have the patience to go through their process; they’re phenomenal. Feel free to DM any questions, I’m happy to help out