Beginner Investor in Greater Boston Area

8 Replies | Boston, Massachusetts

I have been doing some research and decided to invest in real estate in Greater Boston Area. Budget - 250-350K With this low budget in the costly metro area, I am thinking of areas such as Attleboro, Worcester, Lowell, Fall River. My goal is to have a positive cash flow and get good appreciation on the property.

My first question is, am I focusing on the correct cities or should I wait to build more cash and buy it closer to Boston? 

Which other cities fit my budget?

Also considering the elections are ahead of us, is it a good time to buy? I know there's never a good or bad time but I am looking for some experienced people to weigh in. In the worst event of market crash, would I still be able to draw the cash flow? 

Dont wait, you can always buy more later, and it will never be the "perfect" time to start. Both Worcester and Fall River have great potential. If you need help with MLS postings feel free to reach out. Best of luck!

Adi,

You know that real estate is a good investment, when you do your research and find the right-smart deal.  Worcester is a place where the city/state is putting money into revamping and making into a positive/quality place to live. 

My wife and I just invested in a quadplex (4 townhouses) in the Grafton hill section of Worcester. We have them all rented for August 1st and we expect to break even in year one, then cash flow $150-$200 in year 2-3 and even more beyond..

So we’re betting on Worcester and are very excited to see why the future holds. 

Would enjoy the opportunity to meet up and discuss further. 

Good Luck and talk soon. 

Eric



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There are lots of opportunities in Worcester you just need to do your research on the neighborhoods and know what you are buying.  would be glad to meet up if you make it out to worcester.  Every weekend there are about 5 open houses on multis, and that is a good way to see the neighborhoods and the inventory.  it will also show you the level of competition there is among buyers.  Same is true for inexpensive SF homes.

If you are a first time homebuyer and you can house hack, take advantage of some good programs in our state that offer first timers lower rates and the opportunity to get into a property for 0%, 3%, or 5%. All the areas that you mentioned are ripe for investing. Keep your cash for property improvements and to acquire more doors. 

It seems you've already honed in on some of the best markets for your situation.  If you want cash flow, stick to the cities on your list (you can also consider Fitchburg or Lawrence if you're willing to deal with rougher areas).  The closer you get to Boston, the less likely it is you'll find a cash flowing deal. 

Lowell and Worcester are probably the safest bets for some modest appreciation potential while you still cash flow.

I agree that Lowell and Worcester would be good areas to start looking. What type of property are you looking for (condo, MF, SF)? Are you looking to live in the property at all (i.e house hack) or just keep it as a rental (strictly investment property)? You might be able to find some individual condos for the price north on Boston in Lynn, Revere or Salem areas. You'll have to hunt them down but those are areas that will bring you decent returns if you are able to find something and fix it up a bit. If you're getting something in those areas for that price then it'll definitely be a fixer upper but they're close enough to Boston that you'll be able to get better rent prices. Those areas will appreciate over time as well once Eastie and Chelsea are done developing. 

@Adi Oturkar @Eric Hawkes

In MA, if the property isn't deleaded when you buy it, you are responsible for the past tenants that may have been lead poisoned while living there unless you delead within 90 days of closing. This is even if you don't have a child living there, you are responsible for the past tenants. The state is trying to get every rental property in MA lead safe, and they figured this was the best way to do it.

You can use this in your negotiations on any new properties you look at. If it doesn't have a lead certificate on file, it IS going to cost you to delead, the state has pretty much made it mandatory at this point, at least if you want to avoid the liability of a lead paint lawsuit from a past tenant. Don't let that scare you though, I've had clients negotiate $20k off the selling price, and I only charged them $10k for the deleading, so it can actually work in your favor for it not to have been done yet.

You also cannot rent to someone with a child under 6 unless you have a lead certificate on file with the state. If you rent to a couple with no kids and they have a baby, you are then required to delead the unit with the added expense of putting the tenants up in a hotel during the process.

If a unit is a 2 or 3 bedroom, chances are you'll end up having a family apply. You cannot deny the family because of the lead paint either, that's considered discrimination (you're refusing them because they have a kid) and is against the anti-discrimination laws of the state. If there are kids under 6, you NEED to have the unit deleaded and have a lead certificate on file.

If the unit has been inspected, but not deleaded, you also cannot do any construction or remodeling in the unit, they consider that unauthorized deleading and it will prevent you from ever getting a lead cert. The best you would be able to get is a Letter of Environmental Protection, which tells everyone you did illegal work then hired a licensed deleader in to fix it. It generally increases your insurance rate and decreases your tenant pool (who wants to rent from a shady landlord that does illegal work?).

If you delead the property it will actually increase your tenant pool and the rent you'll be able to charge them. A deleaded unit is more valuable to a tenant then a non-deleaded unit, even if they don't have kids under 6, they still like to know they are safe from lead paint issues. Anyone can get high blood lead levels, the law only specifies under 6 because it affects the developing brain more severely then a it affects a fully developed brain.

If you want to message me the address, I can check the database and see if there was ever an inspection done on the property for you. I'll be able to tell if there's a lead cert on file already too. Maybe you'll get lucky and it's already been done.

Good Luck on your investment!