Investing in Cambridge, MA as a grad student?

15 Replies

Hello everyone, I am new to this forum. I became interested in REI about a year ago and started listening to the BP podcast. I hesitated before posting to this forum because I still do not know enough (no practical experience). However, I really want to get some advice on how to learn more this summer since I will be pretty much free.

I am moving to Cambridge, MA this fall to start graduate school in the area. My plan is to buy a multifamily, live in one unit, and rent out the rest and hope for a neutral or positive cash flow by end of 2018. 

Ideally, I would love to buy near Cambridge because of the high demand and the proximity to the universities. However, my goal is to be able to buy several multi-family in 5 years and create passive income from it. So here is my question: Assuming I have $200k cash. Should I buy somewhere further away from Cambridge with a $100k down and save the other half for a second multi-family or should I just go all-in on my first multi-family in a more desirable location?

I am currently looking for anything with 4bd+, 2bath+ in an area within 20min commute to Harvard/MIT (Somerville, Cambridge). Also open to Revere, Everett, Watertown, maybe even Dorchester. 

To gain some practical experience, I thought about moving to Cambridge a month prior to the start of the school year and work with someone who knows about the market in those areas. Not sure if it is a good idea.

Any suggestions would help.

Thanks, 

Elena

You're looking for a property with units that are 4br and 2 ba or larger? Why are you looking for properties with such large units?

Originally posted by @Elena C. :

Hello everyone, I am new to this forum. I became interested in REI about a year ago and started listening to the BP podcast. I hesitated before posting to this forum because I still do not know enough (no practical experience). However, I really want to get some advice on how to learn more this summer since I will be pretty much free.

I am moving to Cambridge, MA this fall to start graduate school in the area. My plan is to buy a multifamily, live in one unit, and rent out the rest and hope for a neutral or positive cash flow by end of 2018. 

Ideally, I would love to buy near Cambridge because of the high demand and the proximity to the universities. However, my goal is to be able to buy several multi-family in 5 years and create passive income from it. So here is my question: Assuming I have $200k cash. Should I buy somewhere further away from Cambridge with a $100k down and save the other half for a second multi-family or should I just go all-in on my first multi-family in a more desirable location?

I am currently looking for anything with 4bd+, 2bath+ in an area within 20min commute to Harvard/MIT (Somerville, Cambridge). Also open to Revere, Everett, Watertown, maybe even Dorchester. 

To gain some practical experience, I thought about moving to Cambridge a month prior to the start of the school year and work with someone who knows about the market in those areas. Not sure if it is a good idea.

Any suggestions would help.

Thanks, 

Elena

My brother is a very successful real estate broker in Cambridge, representing buyers exclusively.  If you are serious about this, and you would like an introduction, please PM me with contact information, and I will connect you.

Hi @Elena C. , that sounds like a great idea! There are many great areas around the Cambridge area that will be great investments especially if you are looking to house hack. There are plenty of areas just outside of Cambridge where you can get more for your money and still have the proximity to Cambridge and transportation. I work in Arlington and have a lot of experience helping and working with investors in the area and would be happy to talk more with you and answer any questions you have about the area and analyzing any deals. Feel free to reach out.

Originally posted by @Antoine Martel :

You're looking for a property with units that are 4br and 2 ba or larger? Why are you looking for properties with such large units?

 Hi Antonie, having three tenants to help me cover the cost of my mortgage is better, isn't?

Ideally, I would like to have a duplex or triplex, but from my search in Zillow, it seems like they are mostly condo and single family in those areas.

Originally posted by @Jonathan Twombly :
Originally posted by @Elena C.:

Hello everyone, I am new to this forum. I became interested in REI about a year ago and started listening to the BP podcast. I hesitated before posting to this forum because I still do not know enough (no practical experience). However, I really want to get some advice on how to learn more this summer since I will be pretty much free.

I am moving to Cambridge, MA this fall to start graduate school in the area. My plan is to buy a multifamily, live in one unit, and rent out the rest and hope for a neutral or positive cash flow by end of 2018. 

Ideally, I would love to buy near Cambridge because of the high demand and the proximity to the universities. However, my goal is to be able to buy several multi-family in 5 years and create passive income from it. So here is my question: Assuming I have $200k cash. Should I buy somewhere further away from Cambridge with a $100k down and save the other half for a second multi-family or should I just go all-in on my first multi-family in a more desirable location?

I am currently looking for anything with 4bd+, 2bath+ in an area within 20min commute to Harvard/MIT (Somerville, Cambridge). Also open to Revere, Everett, Watertown, maybe even Dorchester. 

To gain some practical experience, I thought about moving to Cambridge a month prior to the start of the school year and work with someone who knows about the market in those areas. Not sure if it is a good idea.

Any suggestions would help.

Thanks, 

Elena

My brother is a very successful real estate broker in Cambridge, representing buyers exclusively.  If you are serious about this, and you would like an introduction, please PM me with contact information, and I will connect you.

 Hi Jonathan,

Yes, I am serious about investing in real estate. My fiance is currently based in Pensacola, Fl. We are thinking about starting investing in Fl this summer since the entry is much lower. Probably start by getting a VA loans with 0-10% down and use that opportunity to gain practical experience. Maybe start by flipping houses to get a sense of how everything works. I think it is smarter to put his housing allowance into getting a single family house than renting a condo.

After that, I will get into multi-family in Boston area ideally near the T or public transportation to Cambridge. The sooner I learn and invest in that market, the more I could save in rent. From what I have seen, I will be paying around $1,500/month. That is $130,000+ by end of PhD!

Hi @Elena C.

Welcome to BP. My wife and I just purchased our first multi-family in Malden just off the orange line. I would suggest maybe taking a look over there as prices are lower, but still acceptable by the MBTA.

I don't have as much experience as many others, but if you would like to connect, PM me. I am located at HBS. Also take a look at this  meet up at Assembly Row to connect with others in the area.

@Elena C.

Welcome to BP! It is a great place to learn and educate yourself about real estate. I like the strategy- more doors if you can when you are looking residential 

You might want to think about Quincy instead. There are four Red Line stops that connect directly to four Red Line stops in Cambridge. I sold a condominium to a guy in Quincy last year who was living and working in Cambridge.

Originally posted by @Jonathan Bowen :

You might want to think about Quincy instead. There are four Red Line stops that connect directly to four Red Line stops in Cambridge. I sold a condominium to a guy in Quincy last year who was living and working in Cambridge.

 Hi Jonathan, thanks for the suggestions. I glanced at it a bit. 35min from Quincy to Cambridge by taking the Red-Line sounds good, however, Quincy was flooded a few weeks back, right? Maybe it is one of the places I should avoid if I want to invest long-term?

Originally posted by @Stuart Gardner :

Hi @Elena C.

Welcome to BP. My wife and I just purchased our first multi-family in Malden just off the orange line. I would suggest maybe taking a look over there as prices are lower, but still acceptable by the MBTA.

I don't have as much experience as many others, but if you would like to connect, PM me. I am located at HBS. Also take a look at this  meet up at Assembly Row to connect with others in the area.

Hi Stuart, 

I have a car, so I could easily commute from Malden to Cambridge, but in the winter I rather take public transport. It seems like it will take about an hour commute to Cambridge. May not be appealing to grad students. 

 How's your experience been? Were you able to find tenants?

Thanks for the suggestions, I will check out future meet up. 

We drive and take the MBTA, and sometimes the MBTA is faster than driving. It all really depends on where you’re going and at what time.

Not sure what you’re experience has been like so far, but before this purchase, we lived 2 or so miles away from work and during winter it could take upwards of an hour to get there and back by bus.

Travel time was one of our biggest concerns as well, going from being very close to not, but honestly it hasn’t been all that bad. Crushed several audio books. Lol

As for tenant, we got lucky. The family that was in the unit before wanted to stay. So we told them our requirement and rent cost, as they were paying way below market, and they met it all.

Originally posted by @Stuart Gardner :

We drive and take the MBTA, and sometimes the MBTA is faster than driving. It all really depends on where you’re going and at what time.

Not sure what you’re experience has been like so far, but before this purchase, we lived 2 or so miles away from work and during winter it could take upwards of an hour to get there and back by bus.

Travel time was one of our biggest concerns as well, going from being very close to not, but honestly it hasn’t been all that bad. Crushed several audio books. Lol

As for tenant, we got lucky. The family that was in the unit before wanted to stay. So we told them our requirement and rent cost, as they were paying way below market, and they met it all.

 Hi Stuart,

Thanks for the quick reply! I may be staying very late in the lab, so probably not good to commute an hour away. I will take that into consideration though. Hope to meet you at future meetups. Thanks for sharing your experience again!   

@Elena C. Parts of Quincy flood, that's true, so buy in parts that don't require flood insurance... Your lender may require that you buy flood insurance if you buy in one of those designated areas. Your insurance agent may help you identify those areas. Don't count on real estate agents to willfully disclose the necessity of flood insurance so be sure to ask each and every time...

Originally posted by @Jonathan Bowen :

@Elena C. Parts of Quincy flood, that's true, so buy in parts that don't require flood insurance... Your lender may require that you buy flood insurance if you buy in one of those designated areas. Your insurance agent may help you identify those areas. Don't count on real estate agents to willfully disclose the necessity of flood insurance so be sure to ask each and every time...

 Thanks for the information and advice! 

@Elena C. welcome! I think there were a lot of valid points, and for you it will be really important to figure what is an "acceptable commute". With regards to investing in Cambridge vs other cities, you need to see how each investment area coincides with your goals. In Cambridge you are unlikley to cash flow anything significant, while areas like Malden, Dorchester etc you should be able to make some nice extra money. 

But, the other side of the coin is buying in Cambridge is some of the ultimate wealth security there is. There's a famous quote from the Harvard Real Estate Professor William Poorvu that selling real estate in Cambridge was the biggest mistake of his career. That's the sort of generational asset that you keep in your portfolio and even hand down to your kids etc. But, just to put numbers in perspective, it's going to be very hard for you to find even something like a small two family for anything in the low 1 millions that doesn't need a lot (like a lot) of work. 

So it's really a financial and strategic decision of do I want basically a trophy asset that I know will likely forever be ok and stable versus do I try to buy some extra units in surrounding areas. Throw in the personal decision of your commute etc and you've got yourself an answer!

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