Salem, NH · Member since 2016 · 23 posts · 5 votes
I'm looking to get in to investing in the New England area and want to connect with like minded people or seasoned people for advice. I've been trying to educate myself so I can understand the real estate lingo. Just within the past week I've learned so much and understand I will never stop learning. Feel free to connect with me although I am a "noob" I'm determined.
Welcome to the game :) Learning the lingo is a great start. My recommended next step is to figure out what you actually like to do. Some folks want to swing hammers all day and others' prime desire is to stalk the courthouse steps.
If you want to do this full time, find a passion. It will help get you up in the morning.
My standard piece of advice for all newbies: Wholesaling is NOT a rookie profession. If you can hustle like that, become an agent.
There is a meetup in Andover MA next Wednesday night. @Justin Silverio has details.
@Jonathan Smalls If you can be more specific regarding your Investment Goals, Seasoned Investors such as myself and other may be able, to provide you useful advice.
@Jonathan Smalls If you can be more specific regarding your Investment Goals, Seasoned Investors such as myself and other may be able, to provide you useful advice.
I live in New Hampshire on the Massachusetts border so luckily I can tap in to both markets. The issue I've been having is in regards of investing in rental properties. For instance the price you would buy a house for and the price you can rent it for evens out often which creates little or no cash flow. A lot of these houses are old and are going to need money put in to it after purchase most likely. How would you tackle a situation like this? Is it worth it to still invest in properties that give a minimum cash flow because that's money towards a mortgage that eventually will be paid off? I know it's probably based on my goals for the future and whether I want to hold on to a property for 15 or 30 years. I just see people who live in the south who are getting amazing deals with rental properties and creating all kinds of cash flow for themselves. A $200,000 house where I live doesn't compare to a $200,000 house in FL, NC, TX and places like that. I want to eventually have enough money so I can move to one of these states and invest.
Welcome to the game :) Learning the lingo is a great start. My recommended next step is to figure out what you actually like to do. Some folks want to swing hammers all day and others' prime desire is to stalk the courthouse steps.
If you want to do this full time, find a passion. It will help get you up in the morning.
My standard piece of advice for all newbies: Wholesaling is NOT a rookie profession. If you can hustle like that, become an agent.
There is a meetup in Andover MA next Wednesday night. @Justin Silverio has details.
Hi @Jonathan Smalls, welcome to BiggerPockets! I would have to say that there still is a lot of cash flow to be had with investment properties in our market. I deal with NH mainly, and what I'm seeing is that the good deals end up going fast. You're right that a lot of the properties here are really old and thus have a lot of maintenance, however there is a good opportunity for income with a lot of these properties; especially if they are renovated and "nicer" than the average rental.
There are a lot of deals on the market that don't make sense for investors financing through a mortgage, however there still are great deals to be had even with conventional financing and all of the expenses of these properties.
Welcome to the game :) Learning the lingo is a great start. My recommended next step is to figure out what you actually like to do. Some folks want to swing hammers all day and others' prime desire is to stalk the courthouse steps.
If you want to do this full time, find a passion. It will help get you up in the morning.
My standard piece of advice for all newbies: Wholesaling is NOT a rookie profession. If you can hustle like that, become an agent.
There is a meetup in Andover MA next Wednesday night. @Justin Silverio has details.
Thanks for the advice. I do need to figure out what my passion is and what I want to spend most of my doing. Definitely interested in a meet up I'll contact that individual for details.
This is a great place to learn. Make sure to listen to all the BP podcasts, read the articles on the main blog and be active in these forums to learn a ton very quickly about any topic in real estate you want to know more about.
This is also a great place to meet people that can be assets to your business. Lots of great connections all over but we also have a very strong and active contingent here in MA on here so make sure to find them (Set up some keyword alerts to find out about local topics) and get connected.
Besides doing that on here make sure to get out to some of the many local investor events we have. In NH you have the NHREIA in Manchester and a good meetup in Nashua a week from Wed. In Northern MA you have the NEREIA in Chelmsford (just missed it last week), a couple meetings on the North Shore and the Boston Investors Quarterly meeting. That one is usually in the Woburn area but this one (Which is this Wed) is going to be a walk through of a completed rehab project in Andover. Lots of other stuff as you get down to Boston and South too.
I do think it is ok to have a property that might break even, but it is definitely not something you want to do in the beginning. It takes a lot of patience to wait and find the best deal. Keep looking in all your surrounding towns and see which market creates the most cash flow.
I bought a two family, which I live in,and I regret not getting a 3 or 4 unit instead. If you do not have a mortgage right now i personally would take advantage of an FHA loan and get a 4 unit, unless of course you have enough in savings to put a large down payment down.
I do think it is ok to have a property that might break even, but it is definitely not something you want to do in the beginning. It takes a lot of patience to wait and find the best deal. Keep looking in all your surrounding towns and see which market creates the most cash flow.
I bought a two family, which I live in,and I regret not getting a 3 or 4 unit instead. If you do not have a mortgage right now i personally would take advantage of an FHA loan and get a 4 unit, unless of course you have enough in savings to put a large down payment down.
Is it wise to still utilize the FHA loan even though I do have money for a large down payment? This is hypothetical but I'm curious.
Generally one doesn't save up to move to places with a significantly lower cost of living. :)
If you really want to move to one of those states and invest then just make that a near term goal. As you point out you can get a palace in most of these places for what you would pay for a tiny, dated, starter home in a lousy area around here. Then you buy rentals for half of that!
Obviously there are a lot of "life" things that also influence when and how you can do this.
However I would say that if your eventual goal is to move to a lower cost area it doesn't make much sense getting tied into an expensive cash flow neutral place where you would need to look at it as a long term appreciation play.
Not poo pooing that strategy, but you do need to be in it for 10-20-30+ years for that to be a good strategy.
I think a lot of people will say it is not a smart idea, but if it is a good deal and still cash flows (even with the extra mortgage insurance) I would use the FHA loan, keep my cash, and start planning the next deal.
Generally one doesn't save up to move to places with a significantly lower cost of living. :)
If you really want to move to one of those states and invest then just make that a near term goal. As you point out you can get a palace in most of these places for what you would pay for a tiny, dated, starter home in a lousy area around here. Then you buy rentals for half of that!
Obviously there are a lot of "life" things that also influence when and how you can do this.
However I would say that if your eventual goal is to move to a lower cost area it doesn't make much sense getting tied into an expensive cash flow neutral place where you would need to look at it as a long term appreciation play.
Not poo pooing that strategy, but you do need to be in it for 10-20-30+ years for that to be a good strategy.
Although I would want to move to one of those states I think it'sonly because I'm a newbie who is looking at the numbers and my head is spinning. I believe if I can be a success out here then there's no need to move elsewhere. I guess I didn't realize how many people there actually are surrounding me who are hustling and getting things done. Thanks for all the replies you guys/girls are inspiring.
I think a lot of people will say it is not a smart idea, but if it is a good deal and still cash flows (even with the extra mortgage insurance) I would use the FHA loan, keep my cash, and start planning the next deal.
Makes complete sense. I've always heard people telling me "20%" and I guess either they didn't know about the FHA or thought it's a set up for failure. I'm not sure but like you, I am interested in a 4 family home as well. Are you planning on house hacking your current place for 2 years and then move?
My next move is to actually turn a few rooms and my attached garage into a 3rd apartment. The cash flow I'll get by doing this definitely out weighs any cash flow I can get from purchasing another property.
I'm a newbie just like you and there are so many options in this real estate world it can be overwhelming, but it does always come back to the numbers.
I think people shy away from FHA because your monthly mortgage will be more. I have an FHA and I break even every month renting the upstairs and having a roommate in my apartment. Adding this 3rd unit will put me at about $900 cash flow, which is why it is definitely my first focus.
@Jonathan Smalls Real Estate Investing is all about the numbers. Real Estate Investing is a business that must be void, of emotions. You should determine what is your desired Cash on Cash Return. The formula, for Cash on Cash Return, is Cash on Cash Return = Annual Cash Flow (before taxes) ÷ Initial Money Invested. If a property creates little to no Cash Flow, you should pass and seek another opportunity. In this thread I have read several comments about FHA Financing. I mean no disrespect, to the other Member's Posts, but in my experience this is a bad idea, for the following.
Whether you are buying a SFR, a Duplex, TriPlex, or a Four Plex. Many Realtors will suggest purchasing a property using a FHA Loan, to reduce your out of pocket money. If the property requires rehab, the Realtor and/ or Mortgage Broker will suggest applying, for a 203k Loan. A 203k Loan is where the purchase price and rehab costs are rolled into a single loan.
Assuming you have a respectable FICO you can buy, with a FHA Loan (3-5% down, a 30 year amortization schedule, and a residential loan rate). Because you closed personally, you will not have Asset Protection, in the form of closing in the name of a LLC. What happens if one of your tenants has a slip and fall, on your property, or something else happens to them? You are on the hook and can be personally sued, for everything you own. Some people will say, "Take out a quality Insurance Policy and you will be protected." Ambulance chasing attorneys know their way around and can legally navigate around Insurance Policies. Another downside is you loose on the advantages, of the Federal Tax Code, by not closing in the name of a LLC.
If you want to close in the name of a LLC, Mortgage Lenders will offer you Commercial Loan Terms (25-30% down, a 15-25 year amortization, and a ballon due in 5-7 years). This is what I am encountering, in the current Mortgage Industry.
If you think you will go FHA, 203k, etc. and then Quit Claim the property, to a LLC, or a Land Trust you run the risk of the lender discovering a Title Transfer occurred and activating the "Acceleration Clause" or "Due on Sale Clause" that requires the loan to be paid in full, within 'x' number of days. These clauses are contained, in all Promissory Notes nowadays.
Many Realtors and/ or Mortgage Brokers will not tell you this information. Many, but not ALL are only focused on the commissions he/ she will earn and not focused, on your best interests. You many be asking yourself what can I do? Locate a Motivated Seller that will consider Seller Financing. You may have to put more money down (10-15%), but you can close, in a LLC, with no worries about banks. I have a lengthy Legal Opinion, from my seasoned Legal Team regarding this matter.
You should definitely look at attending investor groups that you can find on www.meetup.com. Another way you can learn the ropes is by offering your services free so that you can gain experience. Think about what you have to offer. Are you handy with a hammer? A camera? Do you enjoy selling? Talking to people on the phone? These are skills that a seasoned investor might need.
Also there is tons of info on BiggerPockets, mostly for free. If you decide to go pro, there is a cost, but you can post ads and there are many other benefits that you can find ou more about from Brandon Turner. It is my opinion that it is worth it.
@Jonathan Smalls I highly recommend attending @Justin Silverio meet up, as you can run your thoughts by many experienced investors, who will be glad to help you out. I plan on attending the event, and would be glad to discuss your investment strategy.
@Jonathan Smalls I highly recommend attending @Justin Silverio meet up, as you can run your thoughts by many experienced investors, who will be glad to help you out. I plan on attending the event, and would be glad to discuss your investment strategy.
I'm looking to get in to investing in the New England area and want to connect with like minded people or seasoned people for advice. I've been trying to educate myself so I can understand the real estate lingo. Just within the past week I've learned so much and understand I will never stop learning. Feel free to connect with me although I am a "noob" I'm determined.
Hi Jonathan. I'm in the same boat. Completely new. Just joined this site today and am ordering books now. I'm from Rockland MA. But i am also interested in the NH market. Perhaps we can be mutually helpful to each other.
Thank you, @Paul Donoghue, for the kind words. As you probably know, we used to hold 2 Black Diamond meetings a month, and the workload was, frankly, killer. And we wouldn't probably hold meetings in Nashua/Tyngsborough, there is already a group in Nashua and a group in Chelmsford. Too much saturation. Black Diamond is held where people have easy access and concentrations of attendees, hence Waltham and Worcester.
So thank you for liking our meetings. They've been pretty packed lately. If @Jonathan Smalls goes to Justin's meetup, he'll learn there as well, it's all good.