Hello BP community,
My husband and I got interested in REI after listening to Rich Dad Poor Dad. Over the last month we found Bigger Pockets and have been building our knowledge base listening to podcasts, reading posts and discussions on the forum and recommended books. We both have full time jobs but would love at some point if our real estate investing took off for him to be able to leave his job and focus on our investments.
We're intersted in getting into REI investing in the buy and hold rental area with most likely SFH or condo/apartments. We live in the Woburn/Wilmington area in MA and are interested in finding our first deal within our area in northern MA or southern NH. I've started looking at deals on online sources, such as redfin.com and realtor.com. From the forums I've read I know that experienced investors say you can find a deal in any area. However, when I try to run the numbers the rent to price ratio is always way below 1. I'm wondering if I'm doing something wrong. Also, what are the best ways to figure out rental rates and vacancy rates? I've seen some averages based on # of bedrooms but wonder if there is a difference in rent possibility for a SFH vs. a condo/apartment? I'm also wondering how to pick the best town w/in our area to start with. If/when we find a good deal we were thinking mostly likely of using a conventional loan but are open to alternatives.
Thanks for all suggestions and sharing your knowledge with us, Happy Fourth too!
Hi @Janice H. welcome to BiggerPockets! Happy to hear you've started looking around and trying to get your first investment under your belt. Unfortunately, the reality of the Northern MA / Southern NH is that SFH as rental properties are very difficult to make the numbers work. Home prices are very high (its nearly impossible to buy $100K or less homes here) and the cost of a mortgage is very close to what a home could rent for, so cash flow positive is off the table. Condos are a more viable strategy and there are some associations where the numbers work better on as rentals, but you might not find the "2%" rule even looking for that type of property. Numbers start penciling out a little better the more units you have under one roof.
Best of luck with your search and feel free to ask questions if you're ever looking for advice or analyses!
Hi @Matt Lefebvre, thank you so much for your message and your feedback. While it's unfortunate to hear that prices in our area are currently too high to make a rental property profitable, I'm glad to hear that my consideration of deals these last couple of weeks hasn't been completely off. I actually have been learning something from all the podcasts and blogs I've been reading =)
Would we do better to look at duplexes? And if so, what would be the best communities to consider (I saw some duplexes in the Lowell, Haverhill and Nassau area that looked like they might produce better numbers)? Or would we be more likely to get a good deal looking in other states? What do people think of newbies buying their first deal from a considerable distance?