Real Estate Agent · Boston, MA · Member since 2016 · 106 posts · 69 votes
9y
Hey Daniel, I'm on the hunt for areas where I see sustainable economic drivers. Obviously Boston as a whole is one of the most diverse economic cities in the US, but I think finding the right pockets is essential. It's tricky here, because any area that's close to Boston that's not an A area is supposedly the "next Somerville", so I think it's really important to understand what's driving your market. My buy and hold is in Everett. No, I don't know if the Casino will explode the real estate values in the city. But what I saw was that it will create close to 3,000 new jobs in the area. Those 3,000 jobs translate to tenants in search of nearby housing. So regardless of what the value of homes may be, my units will always be in demand. I think there are other pockets of opportunity like that in eastern Mass.
Real Estate Agent · Boston, MA · Member since 2016 · 106 posts · 69 votes
9y
Hey Daniel, I'm on the hunt for areas where I see sustainable economic drivers. Obviously Boston as a whole is one of the most diverse economic cities in the US, but I think finding the right pockets is essential. It's tricky here, because any area that's close to Boston that's not an A area is supposedly the "next Somerville", so I think it's really important to understand what's driving your market. My buy and hold is in Everett. No, I don't know if the Casino will explode the real estate values in the city. But what I saw was that it will create close to 3,000 new jobs in the area. Those 3,000 jobs translate to tenants in search of nearby housing. So regardless of what the value of homes may be, my units will always be in demand. I think there are other pockets of opportunity like that in eastern Mass.
Developer · Andover, MA · Member since 2008 · 1k+ posts · 489 votes
9y
@Daniel Ortiz Looks like we are in the same town! I'm actually sitting at Cafe Nero as I type this.
I've invested in and around Andover for many years and have started developing in Boston. Over the years, I have focused more heavily on certain towns and lost focus on others. The intent was to start in low market towns to reduce my capital outset and get into a property to test the REI waters. Once I worked in that market for a while, I move up to mid-market areas. Then, after a while, I moved into the high end areas. This is ultimately where I wanted to be but my steps to get here were slow and methodical so I didn't take on too much risk and not understand the intricacies of the product that buyers are looking for.
It really depends on your goals, what type of investment you want to get into and your appetite for risk. Can you share more about your goals?
Rental Property Investor · Andover, MA · Member since 2017 · 126 posts · 67 votes
9y
@Lior Rozhansky - some great points you make here! I'm interested in hearing more about your story, will send you a message.
@Justin Silverio - Nice to meet a local! I've actually never been there before. I've been over to Perks and Perfectos, with Perfectos being my favorite spot to grab a coffee. Interesting methodology to how you went about your investments.
My goal right now is to purchase my first investment property next year. Interested in House hacking multi family properties with a buy and hold strategy as a way to lower my personal expenses. Focused on a long term cash flow approach.
Interior Decorator · Barcelona · Member since 2016 · 75 posts · 60 votes
9y
Hi Daniel! Welcome to the world of MA real estate investing! It's quite a tough market to understand as every town is different and has it's own numbers and things to consider.
I currently flips houses in the north shore and we're finding that we can acquire for less being as the homes are older and those selling the older homes tend to be owners who have lived there 30+ years, thus they're in need of some updating. The resale value is relatively high in the north shore as there are many more "higher end" neighborhoods and the access to the beaches and quiet from the city is ideal for some. You're usually able to get more backyard and not be so close to your neighbors too which tends to drive prices up.
In terms of buy and hold, your best bet is to look around colleges/universities and the areas, like mentioned above, that are going to be "the next Somerville". It's hard to spot those areas if you're not familiar but just keep an eye out on market trends, new construction and rental availability/pricing. I'm also an agent and work with a lot of new investors who are looking to owner occupy their first property and either pay their mortgage that way or make some cash flow until they can buy another home to live in and keep the first as an income property. I find the best way to build equity is to consider a 203k loan for a multifamily. You'll have to put some elbow grease into it (not literally, you'll hire a contractor!) but it's a sure way to buy low and increase the value quickly. Plus it's easier to find mulitfams that need some updating then it is to find move-in ready at a decent price. I'd look in Chelsea, Revere, Malden, Everett and push up towards Saugus. Lynn hasn't quite reached it's upward trend yet but if you get into the north shore- Peabody, Salem and Beverly are nice. Salem State will always need rental properties!
Rental Property Investor · Andover, MA · Member since 2017 · 126 posts · 67 votes
9y
@Katherine Robbins - Thanks for the warm welcoming! Every town definitely seems very different from one another which is why I threw the question in the forum.
How many houses have you flipped thus far? That's an awesome feat, nice work! I just recently listened to the podcast about the woman from Salem, MA if you want to check it out! It was in the 180's I think.
Seems like most of the movement right now is outward from the city. I'm not too familiar with the cities/towns your mentioned so I'll be sure to check them out! Appreciate the advice on the 203k loan. I'll be reaching out shortly:)
Rental Property Investor · Boston, MA · Member since 2012 · 257 posts · 139 votes
9y
The Boston area provides a lot of opportunity. Within 90 minutes you can be in towns and cities that have high cap rates or areas that have minuscule cap rates with high competition. Many properties within a couple of miles of Boston are held for generations. You need to decide if you are looking for cash flow and willing to be in a "secondary area" or if you are hoping for appreciation.
Interior Decorator · Barcelona · Member since 2016 · 75 posts · 60 votes
9y
@Daniel Ortiz The reason your best bet/the movement is outwards from the city is because Boston proper is A) too saturated with other investors/buyers/people in general and B) way too expensive. You can't get anything in Boston for a good price unless you get into a not so nice neighborhood. It would be great if you had a million + to buy a multifamily in the city then you'll always have cash flow and would be making money on that place till the end. Not many people are able to do that and especially the newbies. Your best bet to get in the game is head somewhere like Chelsea or Everett where the movement to trending upwards and you can get in low and hold long enough for the appreciation to catch up and make you money.
I'd recommend getting a 203k loan in one of those towns I mentioned, live there for a year or 2 and have your mortgage paid for by the other renters (thus save money every month) and sell the place - take that profit in a 1031 exchange and move it into another property tax free. You'll start to save money along the way and eventually be able to buy more properties or bigger and better ones. Buy/holds are a long term deal- if you're looking for short term, try flipping!
Rental Property Investor · Andover, MA · Member since 2017 · 126 posts · 67 votes
9y
@Katherine Robbins - Awesome advice - thank you. I am going to look further into the 203k loans and 1031 exchange. What you described aligns perfectly with my goals!
Real Estate Agent · Amesbury, MA · Member since 2012 · 65 posts · 32 votes
9y
The next "Somerville" is already here. Beverly and Salem on the North Shore are quickly being overdeveloped right now. The quick T commute to the city and the (supposedly) the upcoming infrastructure development to support these more dense populations and T riders are really driving prices up in these areas right now. I personally think we're almost at the peak of the market as far as prices, so a buy and flip is a little more risk in those areas but a buy and hold should pay off really nicely.
Examples: Just check out my previous personal residence. 16 School St #3 in Beverly. We sold for $220k in 2014 and that owner did pretty much nothing to it and then sold for a $30,000 price increase just 2 years later!!! All because it's walking distance to the train and downtown.
I also just put a SFR under agreement in Beverly that's a little further from the train and I listed at $329k thinking we'd get offers a little over that asking price. Pleasantly, I was very wrong!
I door knocked for leads around the corner. A neighbor purchased their home for about $260, and he's interested in selling now because it would sell EASILY for over $400k!
Point proven. Orange is the New Black and Beverly is the new Somerville.
Rental Property Investor · Andover, MA · Member since 2017 · 126 posts · 67 votes
9y
@David Briley - excellent feedback. I know you started to touch on this topic, but do you think it's too late to get involved in the Salem and Beverly areas within the next couple of years? Or do you see these as being too saturated and the shift continuing outward?
China, ME · Member since 2014 · 3k+ posts · 4k+ votes
9y
I'm a full time real estate agent and am doing my first flip - a duplex in Rockland.
I would not consider much inside RT 128. My opinion is that much of this area is heading for a bubble, because appreciation has been borderline astronomical.
I've always been a fan of the south shore. Prices are more reasonable, plus there are a lot of towns that qualify for USDA / $0 down loans. That's going to be a big benefit when the time comes to sell that flip!
Rental Property Investor · Andover, MA · Member since 2017 · 126 posts · 67 votes
9y
@Charlie MacPherson - that's a great point. And it's just as beneficial to understand what areas not to get involved in and why as it is to find the promising ones. Each deserves the attention, thanks for the advice.
Investor · Lynnfield, MA · Member since 2015 · 8 posts · 3 votes
9y
Hello all....I hope you don't mind that I jump in on this post but looking for some advice....
My husband and I own a single family north of Boston and purchased a 3 family in Salem, Ma (North Salem/Peabody line) just about 2 years ago. We are still very much newbies and have learned a lot but trying to figure out our next move. With those of you who mentioned that you are familiar with this area I am wondering if it would be wise to sell our property at this point and put it into other real estate investments or keep it. I had an agent price it for us and she said we could get roughly $625 (we paid $485) the property just appraised at $649,900. Our cap rate is roughly 10 percent (that is conservative) the property cash flows wonderfully. I wouldn't even consider selling it if prices hadn't gone up so quickly. Should we sell and put into several other investments (maybe central ma or south shore) or keep it for cash flow (unsure if property values will hold and all of our cash is tied up unless we take a HELOC). Our ultimate goals are cash flow producing properties but we also want to build our portfolio faster than what we are able to save for these large down payments. I might be rambling and I apologize but just wanted some input on those of you who seem to know Beverly/Salem area fairly well. Thank you in advance!
Real Estate Agent · Amesbury, MA · Member since 2012 · 65 posts · 32 votes
9y
@Angie Briggs , Yes. Sell. You'll never get as much as you will right now. @Charlie MacPherson is right. Anything inside 128 is "bubble town."
As far as Central MA goes, Leominster is a good town and you can make money in Gardner too. With multiple MFRs, You could also spread your risk a little more, or take some of your equity and put it into a flip while the bubble still grows.
Interior Decorator · Barcelona · Member since 2016 · 75 posts · 60 votes
8y
@AngieBriggs I live in Salem and I'm seeing a lot of renovations happening and prices steadily increasing. I think if you wait until the Spring to sell, you'll see you'll be able to get even more for it. It's really become a hot spot for young people and developers are seeing it. There are a ton of renovations/condo conversions happening on Federal St as well as The Point neighborhood.
You might even want to consider splitting them into condos and selling each one off. Depending on the size of each unit and where you are in town, you might be able to squeeze more money out of it that way. Or, just sell 2 units off, keep one as cash flow and still get that money to invest somewhere else.
Investor · Taunton, MA · Member since 2016 · 1 post · 3 votes
8y
Hi Everyone! This thread is really helpful! I'm looking for some advice.
I own a 2 family in Chelsea and currently live in one of the units and rent out the other with a positive cash flow. The Chelsea market is hot right now. There is a lot of construction and we have a D line also coming into the city. I get letters monthly from investors looking to buy my property. I am looking to buy a 2 or 3 family and move into the new property and completely rent out my current property. My thought is even though I could make over $100k profit right now if I sold my existing property I should keep it since Chelsea is really coming up and investors are contacting me constantly so obviously they see it appreciating. Also since it is positive cash flow it seems to make sense to hold it. I'm curious what those with more experience think. Is holding it a good strategy or should I sell?
My other question is...I am looking to buy a 2 or 3 family and live in one of the units and rent out the others. I currently live rent free and would like to do that in my new property as well but the Chelsea market is so expensive right now I would not be able to so I'm wondering what areas in MA you think are good investment where multi-families are still affordable but it would still be a good long term investment. Thanks for any input you guys can provide!
Financial Advisor · Hingham, MA · Member since 2015 · 36 posts · 15 votes
8y
This is a great thread. I'm in the process of searching for my first BRRR in the south shore. I've lived and looked all over the Boston area in the last ten years and have passively invested in a few triple decker condo conversion in Dorchester. I cannot believe how much condos cost in certain neighborhoods now.
My strategy is to find suburban areas close to commuter rails. If there is a walking distance to decent bars and restaurants, all the better. My gut tells me that more young white collar professionals will look to rent outside the city as the rental market continues to to soar, even in places like Dorchester.
One place I've been all over recently is Weymouth/Braintree landing. There has been a big investment, it's a cool little neighborhood. There is a new huge mixed used residential complex that will make the neighborhood more vibrant, and while cranes in the air can hurt existing rentals, the price to rent at the new building is really high ($2,400 for a 2BR). I'm currently going back and forth with a seller to lock up multi with two-two units that, with a little elbow grease, could rent for $1,800 each.
In short, anything close to a commuter rail can be rented. If there is some coffee shops, restaurants, etc...it can be good. Low property value, decent rents, some appreciation upside.
Real Estate Coach · Boston, MA · Member since 2017 · 37 posts · 20 votes
8y
@Bob D. Transited Oriented Housing is a very good strategy. You should look on Homepath.com for Fannie Mae foreclosure. I had seen good deals in Braintree/Weymouth Area a little while back. Number of listings have dried up but you never know when a good deal will show up.
Fitchburg, MA · Member since 2017 · 4 posts · 2 votes
8y
Hello everyone, thanks very much for your willingness to share your knowledge.
I am new to real estate investment. I am a resident of Fitchburg, MA and see quite a few opportunities to flip and to also acquire mutli-family properties to hold. @David Briley, you mention Leominster and Gardner specifically as towns where you can make money. I do intent to look at both of these towns of course, but I am curious as to why you did not mention Fitchburg. As I mentioned, I am new to real estate investment so I am just trying to learn as much as possible. And one of the main things I am trying to learn is which towns to invest in and why.
Any of those 3 is a good place to look for getting started, especially if you live in the area. I actually currently do flips primarily in Fitchburg. We just finished on property on Leighton Street and are looking for our next project. A lot of investors seems to have an affinity for avoiding Fitchburg, but I'm ok with that, more for us :) I'm happy to talk with you more about it. I'll PM you and maybe we can meet up next time I'm out there. Talk soon.
Fitchburg, MA · Member since 2017 · 4 posts · 2 votes
8y
Hi @Ashley Owens, thanks very much for your reply and for your request to connect. I have accepted it of course...:-). I just looked at your company's website and was very excited to see what you do and to learn about your company's philosophy. I was also ecstatic to see the Cleghorn renovation project. This property looks great!
Winchester, MA · Member since 2017 · 1 post · 0 votes
8y
This thread has been incredibly helpful since I would like to invest in MA as well. Does anyone have thoughts on investing in the Worchester area? I am most interested in flipping.