Not enough money for my area?

18 Replies

Hello all,

I'm looking into starting an investment portfolio by purchasing my first MFH within an 8 month timeline. I live in MA, which is a notoriously expensive state, relatively speaking. Most of the duplexes and triplexes etc... in my area fall into two categories. They are either A) Built pre-1900 and pretty beat up... or B) Very Expensive *400k - 600k* for something half decent. 

I'm looking to owner occupy for a year or two within one of these investments, so I don't want to be forced to living in a dump just because I may not qualify for a mortgage at the higher level. I'm 21 years old, and I have about $20-25k available in the bank for my startup. 

Investors in MA relate? 


Hey @Christopher Johanson hope all as is well.

MA is expensive in the Boston area and higher end suburbs BUT travel 30-45 mins west and a 2-3 family is under 200-300K all day.

What areas have you been looking into?  I would suggest taking a drive up the 495 loop some time and you might be surprised.

I've been looking into the Worcester area. Primarily for properties that border Rt. 9 or the MassPike (because they provide easy commute out with less navigation of back roads). Worcester seems to be full of good opportunity, but I'm not sure whether buying into something 115 years old is a good bet for a first investment.

Doing better then me.. I'm 30 with about the same.  Been working me A$$ off all my life too lol Stupid NJ.  I'm in the same boat, NJ is really expensive and anything I can afford to put 20% down on is in bad areas.

Originally posted by @Eric P. :

Doing better then me.. I'm 30 with about the same.  Been working me A$$ off all my life too lol Stupid NJ.  I'm in the same boat, NJ is really expensive and anything I can afford to put 20% down on is in bad areas.

 I've been working since I was 14. I've treated myself to a few nice things here and there but its good to have at least SOMETHING to sit on.. $$

I also worked since 14, but I moved out on my own pretty early, wish I stayed at home and banked more money.  Add on a wedding and some debt pay down the last 2 years its amazing I even have that much in the bank.  Sometimes it feels like I'll never get ahead, but thats why we're getting into this realestate biz right?  I've got ton of information off this site already, I think you'll find all the answers you need.  

I know a guy that bought a place for about $200k right after college.  He got two roommates and hasn't had to pay a dime in living expenses as a result.  They just keep paying down his mortgage, now if it wasn't for all his trips to Vegas He'd prob have a ton of $.  I think your first step is to see what you qualify for, I think with $25k to put down at 21 years old you might surprise yourself.  Maybe you can get a dump in a nice area you can rehab while you live there and turn a bigger profit once you decide to move out.

@Christopher Johanson  I am in a similar boat as well Chris. I am 24 years old working professional currently exploring different locations to invest in and around Boston. I wish I had an answer but I am still investigating and networking to try and find an adequate location. It looks like most investments that fit what I am looking for are between 300k-400K. Now I will be able to invest in a property like this but long term I see it being difficult to build out my portfolio with multiple properties.

My situation is complicated because I want to owner-occupy for a year or two. It's complicated because I have to find a place that I WOULD LIVE IN. If I wasn't going to be living there, it wouldn't matter, but I'd rather not drastically reduce my quality of life for two years in order to kick start the investment ball rolling.

I've put some thought into combining some of the principles of traditional investing with creative investing to remedy my situation and this is what i've come up with: I would likely be able to find a great deal in a good area (that I would actually want to live in) by applying the marketing techniques of wholesaling. However, instead of turning around the distressed seller's property, I would hold it and hopefully be able to cashflow, but also have some instant equity assuming some maintenance and repair. 

@Christopher Johanson  I to am looking for an owner occupied location. I guess I am willing to sacrifice a little more by not necessarily living in the same B to A class neighborhood. 

I haven't researched to much into wholesaling. What were you thinking for your marketing? Direct mail, driving for dollars etc? 

It's tough to say because ideally you would be looking for absentee owners on these properties with either direct mail OR driving for dollars. The problem is that most people who own a MFH (what i'm looking for) have no strong motivation to sell them because they likely have tenants etc. There is definitely a time and place to want to sell a MFH investment, but if they are also an investor and are selling, there's probably a good reason why.

Hi @Christopher Johanson  @Taylor Grabus , I just wanted to add my .02 - A friend of mine at work made out really well with a 2 family property in Salem, MA. Salem State University has recently been revamped. It might be similar in Worcester considering the $ Massachusetts is putting into Worcester State U. My friend got into the 2 family home (yes, an older property) as an owner occupied, but because of the adjacent university, has never had a problem renting out the other unit, and actually rents at a premium because of the demand. He purchased using an FHA 203k rehab loan, total investment w/improvements was under $300k. I've read (and friend confirmed) that doing a 203k can be a rather intense, drawn out, and at times a frustrating process, but if you're willing to put in the time, stay organized financially, follow the rules for inspections/contractor draws, it can work out really well... or so I've heard at least. Thought this might help, there's a lot of info on BP about 203k's.

@Christopher Johanson Welcome.

I agree with @Eric Popso "I think your first step is to see what you qualify for, I think with $25k to put down at 21 years old you might surprise yourself."

The quicker you find what you qualify for, the quicker you can focus on what you can buy and where!

@Steven Tierney Yes, I've had good luck with grad students down near Pickering Wharf.

Many areas do not work for house hacking. Where I live it does not, last year we moved and spent over a year looking for one of these duplex, triplex buildings that we could owner occupy where we could live rent freeish, or at least would be a solid investment once we left. For all those that live around NYC, SoCal, North NJ, you just can't do it.

We ended up moving from a large house to a smaller place in the same time to lower expenses but house hacking just does not work anywhere my lady would consider living in.

Investing is highly localized and some strategies work better than others in different areas, and you have to be honest about where you live and what your goals are. We consider moving to a cheaper part of the country as we would be years ahead of where we are now, but because of high paying jobs in NYC and family we are tied to this area.

Moving creates a new world of issues. Leaving behind work, family, and going to a place where (maybe) there's better markets for house hacking, but at the same time you aren't as familiar with those markets so it becomes a challenge

Have you tried Queens? I live in a very nice duplex. But yes, it's Woodhaven Queens.  Not Williamsburg Brooklyn or even Bushwick. But we have a Trader Joes and a Pool!

I too am looking to owner occupy a MF around Boston (Maybe Allston). Maybe we could combine resources in some way.


Everyone has their own opinion. We couldn't find a multi-family that made sense  so we invest in single family. It has done us very well. We rent hacked but we have had many friends that have rented out all their rooms and it has allowed them to live rent free. So there are tons of different options and ways.

Also remember that there are 5% conventional out there. So your 25k will buy you approx. 500k of house.

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