Buying a Multi Family in New England

Broker / Investor · Tewksbury, MA · Member since 2008 · 1k+ posts · 351 votes

Hi fellow investors

My goal is to buy a 2 or 3 unit multi family live in one unit and rent out / manage the others.

The problem is the cheapest 2 family in my area is 150k. I have only 10k saved and because I am a recent independent contractor banks will not let lend me any money until I have two years of tax returns. The other problem is most of the multi families under 200k are disasters and not considered "safe, sound, and sanity".

Should I get a part time job where I have a W-9? Or are there other ways to finance my first multi family property outside the traditional banks?

Thank you

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Mike HurneyPro Member

Real Estate Investor · Boston, MA · Member since 2009 · 2k+ posts · 542 votes

11y

@Rich Hupper Get a girlfriend with a W2. or a partner...

"I am a recent independent contractor banks will not let lend me any money until I have two years of tax returns. The other problem is most of the multi families under 200k are disasters and not considered "safe, sound, and sanity".

contractor + disasters = ding, ding, ding, SUCCESS?

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Brandon Ingegneri
Rental Property Investor · Providence, RI · Member since 2015 · 1k+ posts · 594 votes
11y
Owner financing. Give me a call. I have options and properties for you that I currently own.
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Mike HurneyPro Member
Real Estate Investor · Boston, MA · Member since 2009 · 2k+ posts · 542 votes
11y
@Rich Hupper Get a girlfriend with a W2. or a partner...
"I am a recent independent contractor banks will not let lend me any money until I have two years of tax returns. The other problem is most of the multi families under 200k are disasters and not considered "safe, sound, and sanity".
contractor + disasters = ding, ding, ding, SUCCESS?
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Rich Hupper
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Broker / Investor · Tewksbury, MA · Member since 2008 · 1k+ posts · 351 votes
11y
@Mike Hurney LOL looks like I am screwed for a while. She would have to be on the mortgage with me then correct?
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Russell BrazilBusiness Member
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
11y
@Rich Hupper I own multifamilies in Massachusetts. Though I am content to hold them, I do not think I would be trying to buy one unless I was going to live in it (As you are). MFH's are being bid up too much right now. I dont know if it is normal buyers bidding them up, or an influx or foreign money, but the cap rates we are seeing near major metro areas on the east coast is just too low for my liking.
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Jim Sestito
Investor · Cambridge, MA · Member since 2013 · 264 posts · 104 votes
11y
Rich Hupper how much repair does the place need? Will it qualify for FHA loan? 3% down on a 150K = 4.5K --- if not I agree w the other posters. Partner or borrow the down payment money. If you are confident you can fix the place and add value you should have no problem paying back any lender. - if you give a little more information about the potential deal and yourself you may be able to find that partner/ lender right here on BP
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Matt Lefebvre
Real Estate Broker · Manchester, NH · Member since 2014 · 630 posts · 420 votes
11y
@Jim Sestito An FHA loan would only help if the property were in good enough condition to live in. If the properties @Rich Hupper has looked at are as bad as he said, banks probably wouldn't be willing to lend on such a poor quality property. Since FHA is designed to "protect" the buyer and make sure they have a higher quality, habitable space.
The only way you'll really be able to qualify for a loan right now is with a co-signer. Otherwise, you'll have to wait until you get two years of tax returns. I'm in the same boat as you my friend. Being self-employed as a real estate agent can make traditional lending very difficult to obtain.
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Jim Sestito
Investor · Cambridge, MA · Member since 2013 · 264 posts · 104 votes
11y
@Matt Lefebvre I was asking the question - never hurts to ask and explore ALL possible options.
- @Rich Hupper There is never just one or two options. Keep grinding and researching you will find a way to acquire properties. Read the BP book - Investing with Low and no money down.
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Mike HurneyPro Member
Real Estate Investor · Boston, MA · Member since 2009 · 2k+ posts · 542 votes
11y
@Rich Hupper
"LOL looks like I am screwed for a while. She would have to be on the mortgage with me then correct?"
Ya, you got something against girls? ;-)
You may want to check out a short story "The Blue Vase"
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Rich Hupper
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Broker / Investor · Tewksbury, MA · Member since 2008 · 1k+ posts · 351 votes
11y
Thanks for the input everyone. I think I might be able to get a co signer. This seems like the best route.
@Mike Hurney I will definitely check out the that short story.
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Rich Hupper
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Broker / Investor · Tewksbury, MA · Member since 2008 · 1k+ posts · 351 votes
11y
Originally posted by @Russell Brazil:

@Rich Hupper I own multifamilies in Massachusetts. Though I am content to hold them, I do not think I would be trying to buy one unless I was going to live in it (As you are). MFH's are being bid up too much right now. I dont know if it is normal buyers bidding them up, or an influx or foreign money, but the cap rates we are seeing near major metro areas on the east coast is just too low for my liking.
You are definitely right. I deal with properties in Boston and the surrounding cities. Multi families are in such high demand because people are turning them into condos, rehabbing, and selling each unit for 450K + depending on the city.
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