I was interested to see if anyone has had success in today’s market, house hacking in the Greater Boston area. Are you able to cash flow when you move out, how you went about the process, etc.?
@Shayne Mahoney Hi Shayne, it's gotten increasingly more difficult in recent years but it is still possible. It also largely depends how far out of Boston you anticipate going. It likely isn't possible anywhere in Boston proper - think Southie, Brighton, Back Bay, or even Somerville, etc. However, the further outside of Boston you look there are more favorable numbers.
I bought mine a little over 2 years ago in Quincy and live very cheap in a nice two family home while occupying the larger of the two units. When I move out, I should cash flow about $1000 per month and that's with only putting a 3.5% down payment into it ($18,000). In that time, I've also built up over $200k in equity, so selling and realizing the gain and rolling into another investment is also an option.
Again, the market has spiked a lot more in recent years. You're not likely to find good numbers on a two family, so you'd have to look at 3-4 unit buildings. With the larger buildings, the more leveraged you're likely to be, so it comes down to your risk tolerance.
I have been looking outside of Boston in the Haverhill area, there are deals to be found.
Also, I think that it would be easier to find commercial deals 4+ than residential deals.
@DJ Richmond Hi DJ, thanks for the reply. Sounds like you've found yourself a great deal, and it's right on the outskirts of the city! Much like @Ryan M. I will be looking North of Boston. Chelsea and Lynn have reputations but seem to be the next up and comers. Good to know there's potential for good deals. Thanks again!
@Shayne Mahoney There is still good opportunity if you find the right building. I bought my 3 fam in Everett and it's been doing well, even while I was living in one of the units (I've since moved out). I like cities north of Boston that are close to the coast, i.e Revere, Everett, Salem, Lynn etc. Some markets are rougher than other ones, so you just have to understand the dynamics/numbers of each one. Also, the market has definitely shifted a bit, which I think will provide even more reasonable opportunity for us.
@Lior Rozhansky . Salem is also one of the areas I'm interested in. Like you said, I think I just need to understand the numbers and be prepared so when I see a good deal I can jump on it. I appreciate the input, Thank you.
Network, network, network. Assuming you are flexible on location, the way to go is looking outside of the Boston-Cambridge-Somerville area - as many people have already mentioned. I work in the Dorchester area and there is a lot of opportunity here. The best way to find good deals is to network like crazy and find a property before it hits the open market. Cold calling agents, reaching out to brokerages, going to real estate meetups and letting people know what you are looking for. It can seem like a lot of legwork (and it is!) but finding that off-market deal or connecting with someone who is just starting to think about listing a property and hasn't yet is your best bet. And if you are interested in continuing to invest in real estate beyond your house-hack you will have already laid the ground work for future investing opportunities.
Thank you @Willie Mandrell ! This is very helpful. I do want to continue investing after my house hack. Knowing I have to put forth some leg work will help me lay out a game plan and get going. Thanks again!
@Willie Mandrell is spot on. I've been an agent in Dorchester for over 15 years, and I know I could be doing more. In doing a deal with another agent earlier this year, he told me about a place he was going to put in but was not sure if he was going to put it in MLS. The price seemed to good to be true, but I took a look at it and bought it right away. A ton of instant equity. Probably would have never known about it if it wasn't for the connection we had with the other deal. I was representing a buyer who was buying his listing. Funny thing on that first deal, actually. I only heard about that one because I happened to visit him at an open house and he told me it was coming on. We ended up seeing it first because of that and made an offer (and got it) before anyone else could get in the door. So because I went to visit him at that open house, I got two great deals (well, one deal and one very large commission).