Worcester MA Investing

19 Replies

Hello everyone, 

I'm looking to invest in the Worcester area over the next year. It is a small condo approximately 500 square feet, 1 bed 1 bath in an 80-unit complex. Price is approximately $90k but I would offer less in order to allow for the upgrades I plan to put in (approx. 20k for kitchen and flooring). The area is about 2 blocks from the incoming Worcester Red Sox stadium coming in. I currently used my VA loan in Hawaii, so I was planning on taking a line of credit on that property in order to provide the down payment on the property. For the Hawaii property, I belong to an HOA... which obviously has the pros and cons... and the property in Worcester is also part of an HOA.

Does this sound like a good deal? Any recommendations moving forward? I'll be in Worcester this week on vacation and plan to look at the property. I have yet to look into reputable contractors to do the work, but if I decide to go through with the purchase, I would love to do the BRRR method and rent this place out for $7-750. I'm not banking on appreciation with this property, but the city is pouring $100-150million into the area for the new stadium, new restaurants, and shops to be open in 2021 and seems like a decent investment.

Any advice or suggestions would be greatly appreciated. 

- Ryan 

Ryan,

I would love to chat with you about the specifics.

Condos in Worcester vary greatly in how they are managed and the rents you can get.

Let me know if you would like to discuss things further.  i am in worcester almost every day working with things like this.

Brian

@Brian J Allen hey Brian, nice to meet you man. With the WooSox coming in, I was looking in to a 550 square foot apartment by the Worcester library. It’s 1 bed 1 bath for 90k. Looked a little run down. Would love to make it into a decent apartment with new kitchen appliances, floors, etc.

I’m deploying in a month, so this may not be the best time to pull the trigger. But I was curious if this would be a good purchase with the new stadium coming in.

Thanks for reaching out!

- Ryan

the stadium will have an effect, but the key is the stability of the condo complex you are looking at.    for a I BR in that area you should be able to get about $1k a month,  so $330 mo in condo fees, $60 a month in taxes, $60 a month in Water and sewer + some $ for insurance.  i would be glad to meet with you and discuss this or other options

@Brian J Allen I have no idea what the condition of the complex is in. I know the inside of the condo needs some work. Hoping the place isn't filled with drug addicts, etc. I know it's Worcester though, so you never know. The listing is 

https://www.realtor.com/realestateandhomes-detail/531-Main-St-Apt-510_Worcester_MA_01608_M35727-10072?ex=MA2372908816&view=qv

Ryan,

How did you connect the dots from Hawaii to Worcester? When I great up in MA, lots of people from out of state never even knew Worcester existed. I went to WPI and liked the city a lot when I was living there.

I will need to google 'Worcester Red Sox stadium' as I know nothing about that development. Interesting.

@John Corey I grew up in Millbury (Worcester county) and joined the military. I was in Germany my first three years and now I’m in Hawaii to 2021. But with my parents retiring soon, I would like to invest in the areas I know (Worcester county) and they could be a point of contact while I bounce around with the military. 

How’s London treating you? I loved it there. Went there 3 times while in Europe... saw the NFL London games. Real cool city. 

- Ryan 

Originally posted by @Ryan O'Leary :

@John Corey I grew up in Millbury (Worcester county) and joined the military. I was in Germany my first three years and now I’m in Hawaii to 2021. But with my parents retiring soon, I would like to invest in the areas I know (Worcester county) and they could be a point of contact while I bounce around with the military. 

How’s London treating you? I loved it there. Went there 3 times while in Europe... saw the NFL London games. Real cool city. 

- Ryan 

London is good. Lots of reasons to stay. So, we are keeping a place there. What I call a lock and leave property. Close to London Bridge and Tower Bridge. We can walk to everything we need when in London.

We are shifting west. I am pushing for Hawaii. 

For investing, Worcester is something I am considering. 

I just backed out of a 2 bed unit at 531 Main st (federal st condo complex). The $531 a month condo fee doesn't make any sense. I have the full financials of the building if you would like to take a look....it's not good. 

@Paul Ireland I would do the same man. I have enough issues paying a little over that for an HOA in Hawaii. Really trying not to get into another one while trying to invest in worcester.. absolutely kills any ounce of cash flow. Thinking about multifamily with 2-4 doors this year. I'll post financials once things start happening this summer!

Originally posted by @Paul Ireland :

I just backed out of a 2 bed unit at 531 Main st (federal st condo complex). The $531 a month condo fee doesn't make any sense. I have the full financials of the building if you would like to take a look....it's not good. 

 Was it so mismanaged that they're trying to make up for the past? That fee is just insane 

@Rich Jenkins thanks brother! Update on next/2nd purchase... my dad is buying out his sister and brother for the sole ownership of my grandparents house in Worcester county. House appraised at 240k, my dad will buy it in March for 160k (having 80k equity in the house) and I'll buy it off him with an LLC I've been trying to form, sometime in August so that I'll have complete ownership of the property (dad would still get 80k should I sell the property down the road or if he ever wants some of his inheritance).

Over time as the loan is paid down, I look to take a cash out refinance (small portion to make renting the SFH still profitable and cash flow) and reinvest in multi family in Worcester by 2021-22.

The 3rd property may change depending on where I go for my next duty location in May 2021... but I’m looking forward to the rehab process and everything about the next purchase. It has been rented out (under market value) for the last 12 years and the tenants want to stay, especially with our great school system.

Thanks again man for reaching out and I’ll be sure to hit you up when I’m back

On that condo fee for 531 Main street, i believe it includes heat and hot water,  I think there is also so roof and facade work tied in there.  Location is great as there are so few opportunities to buy in Walkable areas of worcester.  But condo fees in worcester are typically high for some reason.  I think it is that management used to be hard to find.  i think they will come down.  There is a condo for sale 65 Lake AVE, # 1006 which is a great penthouse for $290k,  but it has taxes of $4500, and here is the kicker . CONDO FEE of $1036/month so the condo fee is 4X the mtg minimum.  Those condos in downtown are being snapped up but the tenant really needs to be someone who doesnt want a car, or you have another $100 a month to have a car.

Hey @Ryan O'Leary I'm a new investor in the Boston area and I've also been looking into investing in Worcester as well.  The prices around Boston are a little out of my wheelhouse so I've started turning my attention West.  I spend a lot of time in Worcester and Springfield for work and they are both promising from what I can tell.  Would love to connect and chat about some of your experience in Worcester. 

@Joshua Bernhardt hey man, nice to meet you. Ya worcester is blowing up from what I can see, hear, and read through forums and other news outlets. Boston firms are coming in and buying some high rises to turn into apartment complexes. Multiple new restaurants and breweries coming in. It’s great to see. 

Personally, I haven’t invested (yet) into worcester because I’m in line to buy a property within the surrounding towns of worcester. I would love my future rentals to be within worcester to make it easier to manage myself before hiring out a PM company, but being military, I may invest in other parts of the country. 

For worcester, the stadium is being built around Madison Street. Kelley Square, a notoriously horrible intersection, is currently getting rebuilt, with multiple restaurants going near it as well. Your main roads are Rt 290 (all over worcester), Rt 20 (Auburn, Millbury both great towns) and Rt 146 (leads to border of Rhode Island).

Hope this helps man!

If anyone has questions regarding the springfield market, rent rates or areas to consider, feel free to reach out. Happy to share our experiences in managing properties in Springfield so far.