Boston - Has the ship sailed?

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Boston - Has the ship sailed?

David Lewis
Investor · Melrose, MA · Member since 2024 · 19 posts · 26 votes

Hi Everyone,

Dave L. here! First ever post on Bigger Pockets. For context - I'm 35, own and live in a condo, unmarried, no kids.

My question to this forum - Boston is the third most expensive real estate market in the country behind San Francisco and NY. By the way, when I reference "Boston" I also include surrounding towns like Everett, Malden, Somerville, Medford, Cambridge, Watertown, etc. 

I'm having a hard time finding multi family where I'd even come close to breaking even. As a result I've sort of giving up on the dream. 

Thoughts/advice? Should I be thinking about this differently? 

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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
1y

Time in the market, beats timing the market.

Buy now. Rents will go up. Rates will at some point allow you to refinance.  

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    1y

    Time in the market, beats timing the market.

    Buy now. Rents will go up. Rates will at some point allow you to refinance.  

    [email protected]301-893-4635Podcast Guest on Show #192
    District Invest Group545 Reviews
    WebsiteView Page
    5Reply
  • Jerell Edmonds
    Investor · Warwick, RI · Member since 2019 · 129 posts · 68 votes
    1y

    Just jump in like Russel said . I waited years because I was scared I passed up a lot of houses in 2018 because I was nervous now I look back and realized how foolish I was . Boston is great area yes . You pay for what you get remember LOCATION , LOCATION! 

    2Reply
  • David Lewis
    OP
    Investor · Melrose, MA · Member since 2024 · 19 posts · 26 votes
    1y

    Thanks @Russell Brazil

    See I’ve gotten the “time in the market” advice before.  But let’s go a later deeper - my down payment would come out of a well performing stock portfolio. So choice is staying stock market and making 15%-20% or buying property and MAYBE breaking even. 

    For me “time in” the real estate market means “time out” of the stock market.

    Any advice on how to reconcile or justify that? 

    1Reply
  • David Lewis
    OP
    Investor · Melrose, MA · Member since 2024 · 19 posts · 26 votes
    1y
    Quote from @Jerell Edmonds:

    Just jump in like Russel said . I waited years because I was scared I passed up a lot of houses in 2018 because I was nervous now I look back and realized how foolish I was . Boston is great area yes . You pay for what you get remember LOCATION , LOCATION!

     Thanks @Jerell Edmonds - it’s always encouraging to hear from others in a similar boat. See my reply to Russel though. What do you think? 

    1Reply
  • Jerell Edmonds
    Investor · Warwick, RI · Member since 2019 · 129 posts · 68 votes
    1y

    Also look outside the area . Maybe even an hour out from Boston. Check providence. But not married & no kids this is your time to go hard ! Good luck don’t give up on your dreams on investing it’s doable switch your thinking you got this! 

    0Reply
  • Jerell Edmonds
    Investor · Warwick, RI · Member since 2019 · 129 posts · 68 votes
    1y

    You can still do both . I’m speaking because I love stock investing I  add every week. But honestly depends what you’re willing  to give up . I won’t sugar coat it when I first got in I didn’t realize the over head cost to run a business . MF investing can be great if you decent down payment I got lucky and got a grant. Also another thing I will say is appreciation & value adding is a cheat code . I just bought my first investment march of last year I gain over 50k in equity  . I don’t know how deep you’re in stock investing but just weight it out more 

    1Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    1y
    Quote from @David Lewis:

    Thanks @Russell Brazil

    See I’ve gotten the “time in the market” advice before.  But let’s go a later deeper - my down payment would come out of a well performing stock portfolio. So choice is staying stock market and making 15%-20% or buying property and MAYBE breaking even. 

    For me “time in” the real estate market means “time out” of the stock market.

    Any advice on how to reconcile or justify that? 


    Your ROI will be significantly higher in Boston real estate than in the stock market. I'm in the Boston and DC markets and average 23% IRR in real estate. The S&P 500 averages 10%.

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    3Reply
  • Jerell Edmonds
    Investor · Warwick, RI · Member since 2019 · 129 posts · 68 votes
    1y

    Real estate is a long term game once you understand that it gets easier my friend . Definitely connect with more people on this that’s willing to share their experience. Knowledge is key 

    0Reply
  • Benjamin Goodman
    Investor · Boston, MA · Member since 2018 · 45 posts · 31 votes
    1y

    Hard to give good advice without more info, but since You are single no kids it's hard to beat buying a single family fixer upper and living in it for two years and then selling for tax free profits....I'm a big fan of Waltham these days $.02 

    3Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    1y

    @David Lewis

    hi. some questions for you:

    -do you own any real estate in addition to the condo?

    -when you say "multi family," what size? 2-4 units? 5-20? 100+?

    -when you say "finding," what are you doing to look? Zillow / Internet, agents, off market, driving for dollars?

    -are you going to meetups and connecting with other investors to see what they're doing?

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    • David Lewis
      OP
      Investor · Melrose, MA · Member since 2024 · 19 posts · 26 votes
      1y

      @Nicholas L.  Thanks for the curiousity

      I own just the condo

      multi family I mean a duplex maybe a 3 family if any are available in my area which is unusual

      Right now I'm doing mostly Zillow and internet searches though I do have a good agent who helped me get this condo that may have insider knowledge on places here and there 

      -I haven't done any meetups though that's on my to-do list to start here in Q1 

      0Reply
  • Casey HoweBusiness Member
    Property Manager · South Shore South Coast Cape Cod, Metro South · Member since 2019 · 31 posts · 16 votes
    1y

    I would also be open to looping at gateway cities / towns.  Brockton, Taunton, New Bedford, Stoughton, etc.  There are really good value add plays in some of these areas and reasonable entry points.  Keep in mind, everyone needs a place to live in landlords provide a service of providing those places and keeping them in good shape, updating it, etc.  so just because you would not want to live in a specific town for various reasons does not mean they aren't attractive to others and good investment opportunities.

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  • Jonathan SmallPro Member
    Investor · Suwanee, GA · Member since 2020 · 182 posts · 151 votes
    1y

    @David Lewis 

    I get what you're saying—Boston can be tough for new investors, especially with how high the prices have been. It's definitely a competitive market, but there are still opportunities if you look in the right places. Areas on the outskirts or neighborhoods that are transitioning could be worth exploring, where you might find a better deal compared to the city center.

    Another option could be looking at multi-family properties, which can offer better cash flow than single-family homes. If you’re patient and do your research, there are ways to still make it work in Boston.

    @Russell Brazil is correct about time in the market.  The profitability of your investment should go up over time.  Rents , cash flow and appreciation increase over time.  @Jerell Edmonds is right that many of us, including myself, waited because of fear and feelings.  I am sure there are good and bad locations in Boston.  Focus on good appreciating areas that have renters that you would want to service.  @David Lewis I prefer real estate over stocks due to taxes.  Both asset classes have their place. I know too many stock rich investors that can't access their cash without huge tax implications.  That is not the case for real estate.  @Benjamin Goodman gives a good example referencing live in flips.  take @Nicholas L. advice and start to go to meetups.  You will start to see people that are a few steps ahead of you in life and investing and can see 1st hand the results.  @Casey Howe said it best, everyone needs a place to live.  I prefer real estate.

    Have you considered looking in surrounding areas, like Quincy or Worcester? Or are you focused solely on the city itself? What are your main investment goals—cash flow, appreciation, or something else?

    3Reply
  • Casey HoweBusiness Member
    Property Manager · South Shore South Coast Cape Cod, Metro South · Member since 2019 · 31 posts · 16 votes
    1y

    I like Quincy and Worcester 

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    0Reply
  • Casey HoweBusiness Member
    Property Manager · South Shore South Coast Cape Cod, Metro South · Member since 2019 · 31 posts · 16 votes
    1y

    @David Lewis if you wanna chat rental rates and market specifics in some of the micro markets mentioned above I'm happy to. I can just give you some data to guide your thought process.

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  • David Lewis
    OP
    Investor · Melrose, MA · Member since 2024 · 19 posts · 26 votes
    1y

    @Casey Howe I’ll take you up on that! Good to e-mail on the address on your profile? 

    0Reply
  • Calvin Thomas
    Developer · New York City, NY · Member since 2015 · 812 posts · 718 votes
    1y
    Quote from @Russell Brazil:

    Time in the market, beats timing the market.

    Buy now. Rents will go up. Rates will at some point allow you to refinance.  


    Why would someone buy now and make little money for the chance that the rates will adjust later? What happens if he has a major expense?  Sh!t happens, and it usually happens when one least expects it.  This is a good way to get underwater real fast.

    This is an unwise suggestion. 

    1Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    1y
    Quote from @Calvin Thomas:
    Quote from @Russell Brazil:

    Time in the market, beats timing the market.

    Buy now. Rents will go up. Rates will at some point allow you to refinance.  


    Why would someone buy now and make little money for the chance that the rates will adjust later? What happens if he has a major expense?  Sh!t happens, and it usually happens when one least expects it.  This is a good way to get underwater real fast.

    This is an unwise suggestion. 

    Literally the same thing everyone has said to me my entire life about why you shouldn't buy real estate now.  
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    2Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    1y

    @David Lewis

    OK - so - if you're just doing Internet searches and are already ready to give up... you should put some more work in first.  this means getting off the Internet and going to meetups, meeting other investors, seeing properties, looking on market and off, and putting offers in.  and expanding your search radius probably 1-2 hours out as others in the thread suggested.

    the market is definitely tough right now. i'm in Pittsburgh, lower price point than Boston, trying to do my next BRRRR, and I keep getting outbid. there is tremendous demand for inventory right now, and as you have already found high prices and high rates have hurt cash flow. so - it's hard. effort will have to be made accordingly. i am adjusting my strategy and going to try to keep expanding my funnel.

    I don't think @Russell Brazil is saying to go out and blindly buy a terrible deal... just that no, the ship hasn't sailed on Boston (as I don't think it has either) and RE remains a good investment.

    happy to continue to dialogue... hope this helps

    0Reply
    • David Lewis
      OP
      Investor · Melrose, MA · Member since 2024 · 19 posts · 26 votes
      1y

      @Nicholas L.  Very helpful! My next personal to-do is to research ways to find places off market 

      0Reply
  • Matthew CrivelliBusiness Member
    Lender · MA · Member since 2021 · 1k+ posts · 1k+ votes
    1y

    Like others have said, you need to find alternative lead sources to find a decent deal. It's not as simple as simple as buy now and hope that "time in the market" will produce a win for you. First off, if you can find a property that cashflows, you're going to have a real difficult time getting the property financed. Second, you don't want to operate at a net loss, it's money out of your pocket every month and essentially negates your equity gains over time. That a situation where only the bank wins, via interest payments. 

    It might be worth it to try to source a property that's off market or via a wholesaler that needs rehab so you can build in equity. You could also look west. Springfield MA has great opportunities for cash flowing rentals. If you plan on living in one of the units, this won't be feasible, but the price point is so much lower in western MA. You could likely get into a rental with a DSCR loan at 20% down, which would be similar or less in terms of DP on an owner occupied loan via conventional financing in eastern MA.

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  • Travis TimmonsPro Member
    Rental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votes
    1y

    Find the best asset you can and use higher effort strategies to fight like hell to break even or eek out a small return. Something like a house hack, rent out extra bedrooms in your unit, rent by the room, mid term, short term rent the owner occupied unit on busy weekends (and go stay with friends/family)...get really scrappy. That's the only real answer to make anything work in a place like Boston.

    And to answer your question on returns, 4x-20x leverage (including owner occupant loan options) + appreciation is what makes real estate a better investment the index funds and worth the hassle. You can, for example, control a $1M asset that appreciates $30-50k per year with a $50k down payment plus closing costs if your DTI is in good shape. You just have to be able to get creative to make it through the first few years.

    You have to look at returns on a longer time horizon. A 10-15 year return on a multifamily property in Boston will create life changing wealth and will obliterate returns from other, cheaper markets. It is expensive and tough, though...I get that.

    1Reply
    • David Lewis
      OP
      Investor · Melrose, MA · Member since 2024 · 19 posts · 26 votes
      1y

      @Travis Timmons yup exactly right - I think I just need to remind myself of the benefits RE offers that other assets do not. Everyone's kind of saying the same thing here so that's encouraging! 

      0Reply
  • River SavaPro Member
    Lender · USA · Member since 2022 · 1k+ posts · 1k+ votes
    1y

    Welcome to BP, Dave! 

    I’m from Newburyport, so I get how tough the Boston market can be. Breaking even with MF in this area is definitely a challenge.

    Have you looked into sotuhern NH at all? Also, you could explore MTRs as there are a lot of traveling professionals in the area. Happy to connect and chat further if you'd like. 

    [email protected]
    3Reply
    • David Lewis
      OP
      Investor · Melrose, MA · Member since 2024 · 19 posts · 26 votes
      1y

      @River Sava oh very cool! I grew up in that area, my siblings went to Triton!

      Im open to Southern NH for sure. I haven't done much research up that way but I have to imagine Salem, Portsmouth, Hampton, are all pretty good?

      I'll message you directly if that's okay! 

      0Reply
  • Jaron WallingPro Member
    Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
    1y

    @David Lewis All aboard! It's a long train ride. Better buckle up.  

    1Reply
  • Daniel McDonald
    Real Estate Agent · Beverly, MA · Member since 2019 · 358 posts · 308 votes
    1y

    @David Lewis I've house-hacked both my duplexes in Beverly, MA just north of Boston and I definitely feel your pain. It's easy to see other markets get all the praise because they're cheap and you can buy up properties like Skittles. That's less of an option here. But where you will win in MA is appreciation. Annoying but true. I personally would rather a few properties make up a sizable chunk of my net worth vs. 100 doors that appreciate a thousand a year. Melrose is a great area and will definitely appreciate over the long run. If you can house hack there I totally would. That seems to be the "safer" move when investing in RE. 

    4Reply
    • David Lewis
      OP
      Investor · Melrose, MA · Member since 2024 · 19 posts · 26 votes
      1y

      @Daniel McDonald yeah you kind of came to the conclusion I did. Unless you have millions in cash a rookie RE investor in Boston might have one or two or three properties vs hundreds. Hence my hesitation, the price tag is so big and the inventory so low there isn't much room for error. I think I just need to dive in though! 

      0Reply
  • Calvin Thomas
    Developer · New York City, NY · Member since 2015 · 812 posts · 718 votes
    1y
    Quote from @Russell Brazil:
    Quote from @Calvin Thomas:
    Quote from @Russell Brazil:

    Time in the market, beats timing the market.

    Buy now. Rents will go up. Rates will at some point allow you to refinance.  


    Why would someone buy now and make little money for the chance that the rates will adjust later? What happens if he has a major expense?  Sh!t happens, and it usually happens when one least expects it.  This is a good way to get underwater real fast.

    This is an unwise suggestion. 

    Literally the same thing everyone has said to me my entire life about why you shouldn't buy real estate now.  

     Yea, what do I know?  Makes complete sense to purchase a property that breaks even or loses money. Because real estate always goes up and the maintenance fairy takes care of all repairs free of charge.

    Seems like a recipe for disaster.  DC properties are expensive, but they probably do not hold a candle to the crazy prices in Boston.  Even a clock is right twice a day.

    0Reply
  • Tyler MunroePro Member
    Boston, MA · Member since 2017 · 84 posts · 42 votes
    1y

    @David Lewis I'm regularly looking at multi-family listings on MLS and can only find cash flow in tertiary markets - think Lowell, Fitchburg, Springfield, etc. Problem with these is 1) they won't appreciate as quickly as those closer to the city and 2) it's a whole different tenant base, usually with a lot more management. Honestly, I've given up on finding cashflow anywhere close to the city due to rates and prices, BUT some other opportunities you may want to consider are:

    Live in flip - mentioned earlier in this thread, always a solid option in any market.

    Condo conversions - good money to be made from this and since they're a little trickier than a traditional flip there tends to be more inventory available that would allow for a profit.

    ADUs - come February 2nd, ADUs are allowed BY RIGHT on any SF property in the state, owner occupied or not. This could be a huge opportunity for investors who can find cheap conversions (think: a SF with an existing in law apartment). Additionally, I'm hearing at meetups that this could extend to multi-fam under 4 units as well, although I haven't been able to confirm.

    I work exclusively with smaller investors in the multi family space and would be happy to chat more about it. Feel free to connect if so - good luck!

    0Reply
    • David Lewis
      OP
      Investor · Melrose, MA · Member since 2024 · 19 posts · 26 votes
      1y

      @Tyler Munroe - yeah let's connect! I shot you a request.

      what are your thoughts on the North Shore? I was pretty bullish on Salem, MA last year. I can also see the ends of the Commuter Rail lines being good too...like Haverhill for instance 

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