Stuck on what to do next…
I currently have a 1 bedroom condo in Boston that rents for $1,700. Over all it is in pretty good shape and monthly expenses + mortgage/HOA by the end of the year come out to around $1,100. So as a rough estimate, it cash flows $600/month. It also is on a highly desirable street in an up and coming area. It includes a parking spot and it's a 1 minute walk to the T. Usually when a condo goes up for sale on this street, it's gone in days, sometimes hours. I'm confident that if I listed it for sale, it would go very quick and I could walk away with $75K towards a 1031 exhange.
Or I could just sit on the cash flow! But the problem is, that’s all it will ever be for the foreseeable future. It is only 50% owner occupied, so I can’t do any cash out refi since 51% would be required. I would like to invest in the next property, but I’m finding myself stuck with a down payment issue since the next one would require 20% down.
I’ve looked into areas in Maine, Worcester MA, and Providence when multis are more affordable and cash flow well. The cons: those areas aren’t in as high demand and the tenants will probably be more of a chore. Pros: I think I could get better cash flow and eventually use the equity towards a second investment property.
Curious to hear peoples’ thoughts on this. I’m faced with potentially exchanging a very good thing for something with a lot of unknowns.
@Pat Clancy The condo market in most parts of Boston is, a you've observed, hot. Shoot me the address and I'll run comps for you.
However, I would wait for the Amazon decision. If they locate here, values will most likely skyrocket. I'd sell as soon as they make the announcement.
Your pros and cons are accurate but you can get quite a bit more cash flow even with management in the Bangor area. I have a 5 unit that would be more than double that but you would be relying on others to look out for your interests. There is also more security with a multi family as you can have a vacancy and still be positive. I guess it depends where you want to take your investment future.
Can you get a HELOC?
I’m located in the Boston area too! I’m finding it difficult to invest in Mass and I’ve started looking out of state.
I can't HELOC because my condo building is only 50% owner occupied. I need 51% for heloc or cash out refi.
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