I'm based in Massachusetts and most of our cities with fair markets only have high priced MFs in the $500k+ range. I want to make my first deal, but it would take me several years to be able to make the leap.
I'm considering out of state, but I think I'd need turnkey with a property manager. Could anyone give me some guidance on where to target and possible contacts even?
KC and it's suburbs you could get MFH in that range... they'd really only meet the 1% rule though not much better than say 2 100k SFR vs a 200k MFH..
@Matt Charette Here in MA, you can find MFRs in the $300K - $400K range in Plymouth, Brockton, Taunton, New Bedford and Fall River.
I'd be happy to help you to find one if you like.
@Matt Charette another option is to try out of state but still nearby. Connecticut has some markets that can cash-flow pretty well, for example (and it is a ton more landlord friendly than MA). It would also afford you the opportunity to more easily "swing by" your rental property, as opposed to having to potentially fly out there.
Good luck and happy hunting! Let me know if you jump into CT.
Besides the south shore, Lowell, Lynn, that area too...
there's a couple cities in Connecticut that you can buy places like this. However, I think you should check out other options by you. The first place you get should really get your feet wet so you can know what to expect. Maybe a condo that you can but and rent out or a multi that you can live in and put little Down.
Just my two cents
I've always bought turnkeys for myself and I have lots of contacts. As far as possible locations, Baltimore and Philly are huge right now (and close to you) but those depend on your available capital because you have to buy for cash upfront. Indianapolis and Kansas City are both solid for turnkeys right now, as well as Chicago.
Reach out anytime if I can be of any help!
How's it going. Well we offer services which out of state investors like yourself look for with a property manager and our rehab guys will rehab properties for you as well. We make sure everything goes smoothly I haven't dealt with investors on the Far East coast yet. But I have international investors that love the Chicago and northwest Indiana markets for flips and buy and holds. So I'm sure anyone from New York, Boston, Maryland or anywhere else would love those services if they are looking to invest into either Illinois or Indiana. If you need any further help please don't be hesitate to PM me and I can provide info such as what's are good areas to buy in.
@Matt K. thanks for the insight, I'll do some research on KC.
@Charlie MacPherson I haven't looked into Plymouth yet. Fall River has some of the highest unemployment in the country around 7-8%, if they ever build a railway to Boston then I think it could turn into a gold mine. I'm warming up to Brockton since it's right next door for me. Unfortunately a lot of the markets you mentioned are in areas I'd like to avoid, there can certainly be great value in Fall River and New Bedford but it comes with additional risk. Since I'm so picky, which isn't such a bad thing, I may have to wait another year to reach the $300k range.
@Filipe Pereira parts of CT are only a 90 minute drive, and I do visit frequently. I haven't looked at the CT landlord laws, but I know MA has its flaws.
@Jason Arcuri I totally agree with your recommendation, I'm just having an issue with putting my money in, the little amount that it is, in a local market where I can't afford to buy in a nice area. I might just need to wait a year to reach the $300k range or find a partner
@Ali Boone that's certainly helpful, I don't have the capital to buy in full right now though. Out of state turnkey is very appealing, but I can only make a purchase right now with 20% down
@Matt Charette hello and great inquiry. In regards to the Fall River markets unemployment rate, it is completely unrelated to our rental strength. I own and manage over 30 units here in the city and have no problem filling my units and having tenants pay their rent online and on time. Average rents currently range between $850-950 on the city and the average 3 family sales price is $225k.
If you are interested in shopping the area and discussing property management, send me a private message and I can get you more information and answer any of your questions.
What also may interest you or anyone looking to invest in Fall River for the abundant cashflow opportunities, I hold a REIA every second Thursday of the month at my real estate office at 6pm located at 552 N underwood st, Fall River, MA.
Cheers to our success!
@Elbert D. That's interesting, it's good to know that option is available. I may be reaching out to you for more info
@Matt Charette Plymouth is an interesting market. I recently helped another BP'er to buy a duplex here at $289K. It was in decent shape and just needed refreshing. I think one side is rented at $1600 and they're living in the other side.
If it were not owner-occupied, it would have beat the 1% rule.
There's an interesting duplex in town right now - one commercial (no rent stated - possibly vacant) and one residential unit renting at $2100. That could beat the 1% rule too.
As far as Brockton, I tend to favor 02301 (west side) vs 02302 (east side). There's sort of a bubble around downtown where there are a lot more properties in disrepair. If you go about 8 blocks to the west, there's a dramatic transformation - it becomes indistinguishable from Braintree. Houses are well kept and lawns are neat as a pin.
I did hear that the mayor has a plan to take that line of disrepair and move it toward the east, though I'm not sure what that plan entails. If true - and successful - buying along that line could be a good move.
@Matt Charette Is there anyway you could swing a situation where you live in the multi? They'll count the rents towards your income and if there are extra bedrooms, you can rent those out too..... If not, theres a couple cheap condos in my area called Lantern Park in Naugatuck, CT. They go between 50 and 80k, the condo association fees are like 200 and the rents are between 1100 and 1300. Putting only 15% down on a single family investment like that would get you amazing cash on cash return plus then all you have to worry about is really the tenant themselves and not maintaining the property since it's a condo association.
@Matt Charette sure. I'm here to help all investors. Just let me know. Same goes for anyone else interested.
@Matt Charette Are you definite that you want to do MF at that price? When you move into some of the more affordable markets for turnkey properties, you will find these are primarily SFR, and that is what most turnkey companies focus on. An exception would be Chicago, where duplexes are common. But there you are dealing with some pretty tricky areas as well as government regulations that can impact your risks factors negatively. If you are considering diversifying over multiple units right away, there are alternatives forms of REI. For example, I started off buying turnkey some years ago, but for my passive investment OOS investment of the last two years I have been investing with a company that offers portfolios of 10 SFR in the midwest. These are co-owned with the manager/sponsors for aligned interests. They earn alongside me and other investors, not from me. They are also offering a portfolio right now that consists of their second medium size apt. complex. I have written quite extensively about my investments with them in my BP blog:
You might find it an interesting read.
@Charlie MacPherson That's very helpful for Brockton. My perception has always been based around mostly around the center and it's status. I'll have to take a drive around the west side. Plymouth and Brockton are currently out of my price range right now, I can at least start the homework. Thanks again!
@Matt Charette There's always Fall River and New Bedford - and for good measure, throw in Wareham.
What's your price point? SFR? MFR?
@Gualter Amarelo It's good to hear that it's not affecting the rental market. My perception is skewed as well because my father has had property there for 30 years and he's been advising against going there, my family grew up there so there could be other feelings involved into the mindset.
I do see the cash flow opportunities in the research I've done, so it's hard to completely turn away from the city.
@Larry Fried to start my rental portfolio I am focused on MF. I'm trying to mitigate my risk against vacancy on a property, down the road I'd be comfortable with SFR.
That's a good read you've put together on your blog, I'll bite. I am investing already in a crowdfunding site earning 8-10%, but the more information the better! Could you PM the details?
My target is a paltry $120k right now. I have an IRA I could leverage to put myself in a higher range, but a SDIRA is a little outside my comfort zone on my first deal. That target can at least work for the Fall River market, but still limiting. I am aiming for MF right now, trying to mitigate my risk on vacancies.
The first question you should ask IMO is what is wrong with the RE market if the most a seller can get for their MF property is ONLY $100k-$120 range ... that does not happen by accident you know, it is usually an indication of some fairly significant fundamental issues with the market.