Investing in the Greater Boston Area

5 Replies

Just wondering if anyone has invested in the Greater Boston area (Chelsea,Malden,Revere,Saugus, etc)? If so, how did it go and what type of properties did you invest in?  Are you interested in continuing to invest in the Greater Boston Area or are thinking about looking into that area?

@Darlene Julien I'm a big fan of the South Shore.  Prices are more reasonable here.  There are also good highway, bus and commuter rail services into Boston.

I've done one flip in Rockland and currently have another under contract in Halifax.

Given the landlord/tenant laws in MA, I will continue to confine my investing to fix & flip, rather than buy & hold.

Charlie MacPherson, Real Estate Agent in MA (#9532146)

Darlene, there are thousands of investors in the Greater Boston area.  You can search here on BP and find hundreds of them, and there are many threads about MA and Boston investing if you search by the keyword Boston.  In addition, there are lots of real estate investor groups, many listed on the events page here on BP, and many on meetup.com  

I think your question is a little broad, so perhaps consider looking for some of those Boston threads and join those conversations.  

As we are seeing the rents in Boston creeping up, the submarkets around the city are becoming increasingly viable options for buy and hold investment properties. I would focus your attention on East Boston, Revere, Everett, and Chelsea. Chelsea still has ways to go, but I predict it will be continue to gentrify in the next 5-10 years. 

What's key here is that the most significant tenant pool in these areas are working professionals/grad students who are being outpriced in Back Bay, Southie, South End, North End.  These tenants tend to be very good: clean, reliable, and professional. Because of the large amount of educational institutions and white-collar professions available in Boston, compounded with a mostly reliable MBTA system, you'll see these attractive tenants having no problem living in areas that will previous C-areas provided that their units are in good shape. (Think Seaport, and Southie)

Do note, that the properties you will likely come across in these areas will require major work; so I strongly believe that building a team that can provide rehab and other construction work will be a major asset. You're unlikely to come across 8%+ cap rate properties that are turnkey in these submarkets (with the exception of Worcester, but then you're dealing with a whole different tenant base.) 

I have invested in Boston for a long time, and as we are seeing the growth in the submarkets, including increasing gentrification, I have doubled down. My area of focus is East Boston. These investment will require some major work, but I have found them to be stellar cash-flowing investments - even better than some of my out-of-state investments, with the added benefit that my tenant base gives me little trouble. I have actually been able to handle the property management of these larger MFs internally, saving me more costs. 

Here's where some first-time investors can make mistakes - numbers paint just one picture. With many properties, you have to absolutely ensure that you're getting a manageable tenant base. If you're getting difficult tenants, then you can run into many, many problems and it's seriously not worth it the extra percentage on the cap rate you could get. 

Cheers,
PT

@Darlene Julien

Originally posted by @Prady T. :

As we are seeing the rents in Boston creeping up, the submarkets around the city are becoming increasingly viable options for buy and hold investment properties. I would focus your attention on East Boston, Revere, Everett, and Chelsea. Chelsea still has ways to go, but I predict it will be continue to gentrify in the next 5-10 years. 

What's key here is that the most significant tenant pool in these areas are working professionals/grad students who are being outpriced in Back Bay, Southie, South End, North End.  These tenants tend to be very good: clean, reliable, and professional. Because of the large amount of educational institutions and white-collar professions available in Boston, compounded with a mostly reliable MBTA system, you'll see these attractive tenants having no problem living in areas that will previous C-areas provided that their units are in good shape. (Think Seaport, and Southie)

Do note, that the properties you will likely come across in these areas will require major work; so I strongly believe that building a team that can provide rehab and other construction work will be a major asset. You're unlikely to come across 8%+ cap rate properties that are turnkey in these submarkets (with the exception of Worcester, but then you're dealing with a whole different tenant base.) 

I have invested in Boston for a long time, and as we are seeing the growth in the submarkets, including increasing gentrification, I have doubled down. My area of focus is East Boston. These investment will require some major work, but I have found them to be stellar cash-flowing investments - even better than some of my out-of-state investments, with the added benefit that my tenant base gives me little trouble. I have actually been able to handle the property management of these larger MFs internally, saving me more costs. 

Here's where some first-time investors can make mistakes - numbers paint just one picture. With many properties, you have to absolutely ensure that you're getting a manageable tenant base. If you're getting difficult tenants, then you can run into many, many problems and it's seriously not worth it the extra percentage on the cap rate you could get. 

Cheers,
PT

@Darlene Julien

 For what its worth, Im from Chelsea (Ive owmed multiple properties there too) and Ive been hearing my entire life it is gentryfying and getting better....and the same thing was said during my parents entire lifetime and you know what, its a worse crap hole today than it was 10, 20, 50 years ago. That doesn't mean you cant make money there, but nothing changes there.  A fresh coat of paint doesnt stop heroine addicts and gangs.

Russell Brazil, Real Estate Agent in Maryland (#648402), Virginia (#0225219736), District of Columbia (#SP98375353) and Massachusetts (#9​0​5​2​3​4​6)

@Prady T. , I think you nailed it: the TENANT BASE in Boston has low expectations, so even low quality buildings fetch great returns. Sad, of course, for those of us trying to create Class A assets, but you can't argue with supply and demand--it's simply reality. Boston will never drop in value, or, at least not until Harvard and MIT lose their  status in the world, if ever.

@Darlene Julien investing here is not for the faint of heart. Many real estate transactions are cash deals, or they climb way past asking price if the property makes it to MLS. Prepare to be outbid again, and again, and again, and again. My last "loss" was to a Chinese pop star paying cash who told her broker that she would "pay anything to avoid a bidding war."

I agree that Chelsea, Lynn, Revere have bright futures--at least, I hope they do. Those communities have everything going for them geographically. My fear is their governments don't have the vision.

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