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
    Quote from @Calvin Thomas:
    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.


     Boston is the 3rd most expensive market in the country, and DC is the 4th. Ive invested in the Boston & DC markets for 22 years now. So yeah, Ive got some experience in this realm. 

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  • 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:
    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.


     Boston is the 3rd most expensive market in the country, and DC is the 4th. Ive invested in the Boston & DC markets for 22 years now. So yeah, Ive got some experience in this realm. 


     Then you would know, that purchasing something that is losing money from the get-go is an unwise idea.

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  • Jonathan AzevedoPro Member
    Member since 2024 · 1 post · 0 votes
    1y

    came to the forums looking exactly for this! someone also feeling my pain. I'm in very similar position, looking to start my RE investing journey around Boston area and facing struggle to cash out on my stock portfolio to try to get a MF, that using BP analysis tools, will be barely break even...even in slightly farther surrounding areas. wishing us both luck though! 

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

    It sure is is.  Looking forward to connecting.

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  • Warren LizoBusiness Member
    Property Manager · Boston, MA · Member since 2017 · 32 posts · 14 votes
    1y
    Generally speaking, Boston proper is an appreciation market (low cap rates) unless you have a solid value-add play. It's still an expensive entry point. The further you go from Boston the inverse happens- stronger cap rates with better cash flow. That's why mature investors with long positions like Boston while places like Brockton and Holyoke are more affordable.

    Consider thinking about CAP rates as 'measure of risk' and relate it to your risk tolerance. I was taught this my the principal of one of the largest industrial REITs in the country and it has always proven to be true.
    [email protected]
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  • Shawn AckermanPro Member
    Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
    1y

    @David Lewis Don't give up man.  There are alot of real estate strategy out there which will allow you to obtain a piece of property unconventionally.  Finding motivated sellers off market and making offers using creative finance strategy. I won't overwhelm you with all of the different terminologies but begin researching these concepts.

    All the best!

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  • Tyler MunroePro Member
    Boston, MA · Member since 2017 · 84 posts · 42 votes
    1y
    Quote from @David Lewis:

    @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 


     The Salem/Beverly area is great and pretty pro-development/housing from what I'm hearing. It's still a tough market to find cashflow but definitely more doable than areas close to Boston. Haverhill is another interesting area with reasonable home prices and a lot of municipal developments in the works (also the commuter rail and easy access to major highways). I do feel like Haverhill is much in the "path of progress" than comparable areas like Lowell and Lawrence, so it's a city on my radar for sure.

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  • Mike HurneyPro Member
    Real Estate Investor · Boston, MA · Member since 2009 · 2k+ posts · 542 votes
    1y

    @David Lewis

    :-) I advise most of our members to read "Acres of Diamonds" then let's have a discussion, if you want? Otherwise you can find excuses not to do Real Estate. Careful in the Stock Market, seems great on it's upward trajectory however...

    @River Sava, great first name, same as one of my granddaughters! What's the last deal you found in Newburyport?

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  • River SavaPro Member
    Lender · USA · Member since 2022 · 1k+ posts · 1k+ votes
    1y
    Quote from @David Lewis:

    @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! 

    Sounds good! 
    [email protected]
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  • River SavaPro Member
    Lender · USA · Member since 2022 · 1k+ posts · 1k+ votes
    1y
    Quote from @Mike Hurney:

    @David Lewis

    :-) I advise most of our members to read "Acres of Diamonds" then let's have a discussion, if you want? Otherwise you can find excuses not to do Real Estate. Careful in the Stock Market, seems great on it's upward trajectory however...

    @River Sava, great first name, same as one of my granddaughters! What's the last deal you found in Newburyport?

    Thanks Mike! I grew up in NBPT, but do not invest there
    [email protected]
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  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ 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? 


     Are you talking about buying to live in or strictly investment?

    You're marking the equities to most recent returns, the reality is a real estate investment to live in is a guaranteed rate of return and serves utility. 

    You have to realize that if we get another euphoria in the general markets(RE, equities, bonds, crypto, gold, etc.) then places with scarcity in RE will definitively be a pressing subject. If we face any headwinds, liquid investments go first so probably crypto but then you bet equities will get pressed. Eliminate the high/low probability of the two and add the fact it's a place to live in for utility. 

    Kind of hard to see why you would not want to press this button and try to pay it down/off as soon as possible, if it's your primary home.

    It's very unlikely you'll regret purchasing a primary residence in Boston if the market rallies, and if the market downturns. It's a guarantee you'll regret not buying a residence in Boston if the market downturns. 

    I just don't see the logic in your thinking. Am I missing something?

    2Reply
  • Heather Bailey
    Member since 2019 · 30 posts · 24 votes
    1y

    Comparing real estate to the stock market really depends on your needs. With real estate investing, you have the tax benefit and depreciation along with what is hopefully an apreciating  asset. One other thing that people in their 60s can consider is - if you are planning on taking Social Security and making passive income part of what you live on, rental income may not count as income against your Social Security benefits. Definitely consult with your accountant on that. Ideally, it would be nice to have both types of Investments.  

    0Reply
  • Jaylan ArcherBusiness Member
    Real Estate Agent · Portsmouth, NH · Member since 2014 · 150 posts · 65 votes
    1y

    I know the seacoast of NH has been mentioned here but I wanted to point out a few options that could be considered.

    Hampton, a popular coastal town, has strong demand for multifamily units near the beach and a robust short-term rental market, especially in summer. However, the market is competitive, and rental regulations are becoming stricter. Portsmouth, known for its historic charm, offers higher prices but strong demand for both multifamily properties and short-term rentals, with premium rental rates for well-located properties. Very hard to find multi-family properties that cash flow in this A market. The short-term rental market here is particularly lucrative, though regulatory changes can impact profitability. 

    Moving inland, Dover presents a more affordable option with rising demand for multifamily units and a steady rental market, though its short-term rental potential is less robust than coastal towns. Still, it offers solid cash flow potential, especially in multifamily properties with cap rates around 7-9%. Lastly, Rochester, the most affordable of the four, provides great opportunities for investors looking for higher cap rates (8-10%) in multifamily properties. Personally I think there are great opportunities in Dover, Somersworth and Rochester.

     Overall, Hampton and Portsmouth are best for premium short-term rental opportunities, while Dover and Rochester provide more affordable and potentially higher-yielding investments in multifamily properties.

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