Real Estate Agent · Boston, MA · Member since 2016 · 106 posts · 69 votes
6y
@Patrick Hagerty to be honest you may want to consider holding off on investing in real estate and focus on improving your cash reserves. If your max budget is $200K on an FHA loan, meaning you basically have around $10K to play with, you may not be well capitalized enough to buy your first one quiet yet. The real estate game is fantastic, but I always encourage buyers to at least have $5-$10K as reserve funds after purchase (I had a furnace go out within a month of my first purchase that ran me $8K). Especially in the price point you are looking at, if you do find anything chances are it will likely not be in a great location and it wont be in great shape. If you focus on earning/saving for the next year, you'll be in a much better position to go after better property and not place yourself at risk. My 2 cents.
Real Estate Agent · Worcester, MA · Member since 2018 · 518 posts · 410 votes
6y
if you are investing in Worcester you need to keep in mind that these buildings are 100 years old. it is rare that you find one that is completely done, and right now a done 3 decker is over $500k, people are bidding over $200k for SF homes that need $50k in work, it is really hard to compete as an FHA buyer, your best opportunity might be to buy from a flipper who is almost done, get it under contract then have a completed house by the time you close. They will work with you because you can shorten the time between completion and sale. This is what you should be looking out for.
Rental Property Investor · Boston, MA · Member since 2020 · 28 posts · 3 votes
6y
@Jeff Bousquet anywhere in Rhode Island to look being from Boston? What’s your thoughts on Hartford ct ? Seems like practically the same options as Springfield with a few more and higher rents
Real Estate Agent · Worcester, MA · Member since 2018 · 518 posts · 410 votes
6y
That is a big range. Try to find someone local to each market you want to look in. eg. I do Worcester, but I would hire a realtor in Hartford that works specifically with Multi family investors. Same with Providence. I am only 35 min to Providence but the market is entirely different and all real estate is local. There is a lot going on behind the scenes in these markets so you need to have someone local to each market to find you what you are looking for.
Rental Property Investor · RI · Member since 2017 · 94 posts · 52 votes
6y
@Patrick Hagerty
I don’t buy in RI. Most places in RI have high property taxes and the rents are slightly higher than a good area of Springfield. In addition to property taxes some RI towns have and a fire district tax.
I’ve been watching Hartford recently, but I’m not really familiar with the area. I do have some concerns of the poverty level in CT. The economic growth seems slower then most areas at best. It may be best to speak to a local realtor about Hartford.
@Jeff Bousquet anywhere in Rhode Island to look being from Boston? What’s your thoughts on Hartford ct ? Seems like practically the same options as Springfield with a few more and higher rents
I would look at Enfield for starters. Almost all of Enfield is nicer than any part of Hartford, and it doesn't have the high taxes Hartford has. I would also consider Springfield if I were you. Both markets have decent rental rates for investors and the demand for rental units is there. Just be cautious about which areas of Springfield you look into.
Buy and Hold Investor · Cranston, RI · Member since 2013 · 1k+ posts · 1k+ votes
6y
@Patrick Hagerty and @Jeff Bousquet in RI it's common for Boston people to look in Pawtucket since it's pretty close to the T.
Less common because it's a bit more owner-occupied than rental, but still at the northern end of RI and with some parts close to the T, is Cumberland. Most of Cumberland is nicer so prices are higher but some people like it.
Woonsocket has been on fire lately, largely due to folks from Boston buying. It's not as close to the T as Pawtucket and it's a bit divey (C area), but prices have generally been a little more accessible. (Maybe less so in the recent past as prices have shot up.)
Those are usually the 3 areas, aside from Providence of course, that Boston folks usually look at when they turn their attention to Rhode Island.
Yes, taxes are high in Rhode Island as they generally are in the Northeast. I only do things in RI so I can't compare apples to apples vs. Mass but wouldn't be surprised if RI is worse or you get less for the money etc. Of the places I mentioned (Pawtucket, Cumberland, Woonsocket, Providence), only parts of Cumberland have fire district taxes as far as I know. You can always check the town website, or email/call the tax collector to ask of course.
Waltham MA · Member since 2019 · 24 posts · 4 votes
6y
Have you ever thought about partnering up with someone whether its a friend or someone on Bigger pockets. Both of you put in half and now you are able to afford a better place in the Boston area. Sometimes its hard to do it yourself, and you just need a little help.
@Patrick Hagerty Hey there, kind of echoing what Pablo said... Western MA or somewhere more North.
Dracut, Methuen, Lawrence, Haverhill, Tewksbury, and then more towards the coast with Salem and Lynn for single-families and condo/townhomes. If you can get to $250K you will have a lot more options that might even be habitable from the start. If you are looking specifically for a multi remotely close to Boston it will have to be in Lowell, Fitchburg or Shirley.
Almost 99% of these properties will not qualify for a standard FHA loan. There is something called an FHA 203K standard loan which is essentially a renovation loan geared towards first-time buyers. They are layered with different details and requirements so they are best for properties that have been sitting on the market for a while. In a multiple or "holding offers" situation they would be tossed aside from those obviously paying cash or going with a conventional loan. Shoot me a message or give me a call. I'd love to learn more about what you're looking for.
Rental Property Investor · Boston, MA · Member since 2020 · 28 posts · 3 votes
6y
@Woodly Tisme I would absolutely love something like that definitly, I know everyone says it’s not too hard to find a partner but I have no experience, first time investor, a partner would be great right now especially to learn a lot and be able to ask them questions! Don’t even know where to get started, why would anyone want to partner with me? I have practically nothing to offer in terms of real money and experience but I have been looking for a meet up or something so hopefully I could meet a partner or just other investors to help ! Anything would help!
@Woodly Tisme I would absolutely love something like that definitly, I know everyone says it’s not too hard to find a partner but I have no experience, first time investor, a partner would be great right now especially to learn a lot and be able to ask them questions! Don’t even know where to get started, why would anyone want to partner with me? I have practically nothing to offer in terms of real money and experience but I have been looking for a meet up or something so hopefully I could meet a partner or just other investors to help ! Anything would help!
I feel you. I am newbie in investing myself, and I have been searching for places in the Boston area also for about 200K but like most people said you will not find it here, especially a multi family. You will have a better shot at finding a single family and then maybe renting out the rooms. Boston is too expensive for a newbie. You have to go west, south or north. I personally want to house hack and stay within the area but staying in Boston will most likely not be possible. I have looked at Woonsocket and Providence RI. Very cheap down there. you can get a nice place for 200K but the issue is that RI is not as economically thriving as MA so the rents you get down there will not be nearly as much. You really got to run your numbers.
@Woodly Tisme You're finding nice multi-families in Providence for $200k? I'd love to know where!
I am not seeing multi families there for that cheap but I see a lot of nice single family houses over there for 200k. I am sure you can find some low cost multi family over there too. I have not been really searching for multifamily. I look heavily in the Woonsocket area. Houses are very cheap there compared to Boston.
Buy and Hold Investor · Cranston, RI · Member since 2013 · 1k+ posts · 1k+ votes
6y
@Woodly Tisme and @Amanda Davidson the SF houses that are less than 200K at this point are usually in tougher areas and/or need work. A decent SF in a decent (B or higher) area is almost certainly going to be over 200K.
However the general point might have been that you can find multis in RI "in the 200s" (not necessarily 200K but 200-something) which is still somewhat true. And I'm guessing is about half the cost of something in the greater Boston area. But as Woody said, the rents are less and it's not nearly as economically thriving as Boston.
For me, I'd pick a market to concentrate in. If I'd buy one in one area, I want to think that in 10 years I'll own 10 there. So whatever you pick, be willing to commit to concentrating time, money, aggravation, and expertise in that area (e.g., attending local RE investing groups regularly, being in the area for one reason or another on a semi-regular basis, etc.).
Ask yourself, if you had a couple of months where you had to go there every weekend for some issue, would that be OK or would it be a giant PITA you'd want to avoid.
Just trying to put it in perspective. If RI is too far then I'd say just rule it out now.
Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
6y
@Patrick Hagerty try pioneer valley (Greenfield, Montague/Turners Falls) and the 91 Corridor. Can get some pretty nice and rentable SF and small multi places for around 200K. Can be more than a little rough and ready, but quality of life is good, young people moving in using FHA loans and similar and some fun, funky places.
Some places in southern new hampshire within long commuting distance to Boston might work too.
Waltham MA · Member since 2019 · 24 posts · 4 votes
6y
Great advice Anthony. for me I want to purchase my first place and House hack it. From there I want to rent out one of the rooms. After a year or two, i'd move out and rent out the whole house. That is my plan, just gotta take action. I currently live in Waltham and it is about an hour away from RI which is not horrible. I will continue looking throughout the Massachusetts area for a place that I can afford and make money off of.
@Patrick Hagerty ever think of a business partner. Get a 4 family live in one unit and house hack the rest. Inbox me if you would consider a business partner.
Realtor · Boston, MA · Member since 2014 · 159 posts · 75 votes
6y
Patrick, I have lived in Mass most of my life but currently live in Rhode Island. I moved here because even though the taxes may be slightly higher, the purchase prices pale in comparison to the Mass prices. I do deals every day in both states and know that Rhode Island is a third cheaper than Mass. The downside is that rents are much cheaper and the economy may not be as great as some would like. I know many people who have purchased in Rhode Island but still do all of their shopping, entertainment, etc. in Mass.
Real Estate Agent · MA · Member since 2018 · 167 posts · 57 votes
6y
@Patrick Hagerty Is partnering with someone out of the question? Family or friend that may have a better income and you can work out a deal to manage and live in the property. Just trying to think of alternatives to get you into the MF market sooner rather than later.
Investor · Boston, MA · Member since 2016 · 91 posts · 45 votes
6y
As someone who has been investing in this exact target price in Providence/ Pawtucket for the past 4 years, it's a **** show. As @Anthony Thompson@Jeff Bousquet and others have said, for these prices expect Class-C or lower which means the target tenant has a combination of volatile employment cashflow and negligible or negative savings.
You throw in the economics of a turnover on an $800/mth unit, i.e. 3 months of eviction lost income, legal fees, $5,000 turnover costs = your net free cashflow for 3 years being erased from one delinquent tenant.
I'm just saying that I wish we'd gone in with eyes wide open.