Dorchester Condo - Beating The Masses To A Changing Market

6 Replies

Investment Info:

Condo buy & hold investment.

Purchase price: $291,000
Cash invested: $12,000

I always knew what I would do with this property. It isn't big enough for raising a family, but it would be ideal to someday work as a rental in an area with exceptional rental value. Dorchester was a long-standing area most folks Downtown Boston never ventured into. It was viewed as dangerous and unattractive. But it has what those closer to downtown dream about...actual diversity - in people and food, bigger spaces for outdoor dining without the huge prices, and homes/condos with actual grass back yards, yet only 20-30 minutes on the red line from downtown!

Boston was developing so rapidly that everyone was getting quickly priced out of the once neglected (now extremely trendy) South Boston area, and pushing buyers and renters into the even farther south areas of Dorchester and Quincy. I knew I needed to pounce while the reputation for moving there was still seen as risky by many.

But I wasn't having any luck beating out the cash offers. At the time, every property was selling in days after listing, with dozens of offers, and for well over asking. Then, a friend of mine introduced me to a couple that needed to move out of Dorchester for work an hour north of the city. I did something crazy. I went over to their house, met them, and told them without any real inspection that I would buy their home guaranteed ASAP - and do it all FSBO without a buyer agent - and for full price - to help them save on all the closing costs. We shook hands right there on the spot and I moved into the house 3 months later.

During my 5 years living there and before moving to Nashville, I personally built a retaining wall it frame-out, and level the once downward sloping front yard. Also, Ipainted every wall, did a custom closet re-org in the guest bedroom, updated with new lighting and fixtures, knocked a part of the bedroom wall out to extend the master closet (and added addition slider door storage space above the closet), saved a dilapidated pergola, and did a bunch of stone work and landscaping to create a backyard oasis.

In the now 7 years I've owned it, the home has increased in equity from original price by ~$150k. We have used the equity for cash-out refi twice! Once to buy our live-in home here in Nashville, and again to fund the down payment on our first investment LTR (also listed here in BP).

We started renting the condo in 2018 and have great tenants who pay $2,300 a month, while also tackling all the mowing and leaf cleanup spring/fall. After twice refi, it is still giving positive cash flow of $200/mo.

What made you interested in investing in this type of deal?

South of Boston was turning fast. I knew that if I could find a condo that just needed a little lipstick, and that was within a 10 minute walk to the subway, that the place would always be a good rental or perhaps and STR someday.

How did you find this deal and how did you negotiate it?

An intro from a friend to a motivated buyer. I realized I needed to sweeten the pot. I offered to purchase without a buyer agent and have them manage as a FSBO. And I told them that I would move in at whatever pace they needed, so they didn't feel any pressure to find their new home.

How did you finance this deal?

Traditional 20% down

How did you add value to the deal?

Paint, increased closet sizes, added major curb appeal with wood retaining wall and landscaping, new fixtures and lighting throughout.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Compass property management has been really affordable and responsive.

@Chad Smith

@Chad Smith this is so inspiring! That's I truly believe in going long with real estate investments and putting your sweat equity. When you put 20% down at that time, did you have extra cash saved in case any repairs would be needed right since you waived the inspection?

Some of Boston properties is high risk reward scenario and being close to train station is definitely plus. Dorchester bothers some great neighborhood towns like West Roxbury and JP.

I also like the list of improvements that you mentioned that help with a property appreciation. Very cool! I myself look for a property through those lenses: What can I make better here? How can I add value to this home? That is why I shy away from properties that are remodeled and new. Somebody did that already and that is not what I'm looking for.

Hi Malika! Thank you. I did in fact have extra saved to handle any issues in that first year. Thankfully, everything was in good order. The couple was in the condo for about 5 years and I had the feeling they took great care of it, so it wasn't a big concern overall. 

It is amazing how in that Dorchester market and nearby, simple things like adding a more modern backsplash or refinishing and whitewashing the old hutch (most of these old condos have a built in hutch in the dining area that is super dark/old looking), can gain big $$ in the valuation of the property. The huge one was extending the length of the small closet in the master. That alone made our property very attractive to renters. So many of these old Boston homes have tiny closets.  

Hey Roger! Nashville is great. No more shoveling my car out, two-for-one beer specials, and plenty of warm days and patios for eating outdoor. Not to mention the big difference...a 2,100 sq ft, 3bd/3bath and a driveway for the same price as a 940 sq ft condo.  

We complain about traffic here - and yes, the highways can be pretty bad but nothing like the tunnel and Kosciuszko Circle twice a day, each day during rush hour! And you can literally drive right through the heart of downtown anytime in minutes. Try that in Boston lol. 

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