Best Places to Invest in Massachusetts?

31 Replies

Hello Investors, Agents, and Anybody Else in Real Estate, I'm looking at properties I may invest in the Massachusetts area. I notice that much of the properties here in Greatet Boston have a horrible ROI however I'm finding many B and C class properties in the North Shore---like Salem, Lowell, and Everett---that have a decent ROI. I would like to know what cities are ideal to invest in for newbies like me?

@Makhwarand Khan

What would you define as a decent ROI? I haven't been able to find any MLS properties worthwhile in MA in a couple years. I'm not saying they not out there, but I'm not seeing them. If you are a first time home buyer and going through Mass Housing for a multifamily to house hack, I still think that is doable.

Not sure how familiar you are with those areas, but some neighborhoods in those towns are lower than C class.  It's not Detroit or South Side of Chicago, but there are some areas I wouldn't go to at night.

@Makhwarand Khan  I feel like a broken record as I give this advice every time, but here goes...

LOOK SOUTH!  Most of Plymouth and Bristol counties are more affordable than metro Boston as well as north and west.

There are often 1% rule properties in Brockton, Taunton, Middleboro and Plymouth.  There are near 2% properties in Fall River and New Bedford.

Virtually nothing inside RT 128 will get close.

@Charlie MacPherson    Are there safe areas in the South Shore with commutable access to the Pike/128 that would be appropriate for a multi-family house hack? Brockton, New Bedford and Fall River definitely don't qualify, and Plymouth is likely too far from work.

@Ryan Hebert   I think Middleboro is a great location.  Lower prices than inside the 128 belt, but easy access to I-495 and I-95 and routes 24 and 44.  There's also commuter rail access to Boston and all of the MBTA Purple Line.

@Ryan Hebert I like where you are headed. I think Fall River is a great emerging market. 

From an economic standpoint there is a lot of development going on there with Amazon, the Tiverton Casino, Healthcare and the Development of a large shopping complex. 

Cap rates have trended down a bit as money has fled out of Boston to chase higher returns but there is still a BIG capital appreciation play over the next 10-15 years.

@Ryan Hebert I know you ruled out Brockton.  The town definitely has a bad reputation, but it's really a tale of two cities (with apologies to Dickens).

Certainly the center of Brockton looks run down and to a lesser extent, so does the east side.

However, the west side is an entirely different story.  If I blindfolded you and dropped you there, you would probably guess that you were in Braintree.

There's sort of an invisible barrier about 8 blocks west of RT 28.  On the east side, yards are overgrown.  Houses have sagging porches, peeling paint, rotting trim, etc.

One more block to the west and homes are suddenly neat as a pin and well maintained, and that continues all the way to Easton and Stoughton.

Bottom line is that you might give west Brockton, which is roughly defined as zip code 02301, a second look.

@Charlie MacPherson I took a look at Brockton and I do see a lot of Class A and B properties west of RT 28. Interesting find, I'll look into that west Brockton along with Fall River.

@Charlie MacPherson I have been looking on the north shore and metro west for a house hack awhile being originally from there. Living in Boston now and the South is looking much more promising! I am thinking on becoming a realtor as well. Hopefully you have found some great success! 

I'm a broker up here in the north shore. I can tell you multi families up here are through the roof. Just saw a 2 family in Lynn going for $500k with tents totaling $3100. In focusing my eyes for some multis out in the Lawrence area and surrounding towns and also looking down south. Parts of Brockton are good and Fall River has some good pockets also. Everything in Salem, Peabody, Beverly is very expensive.

Let’s make some money brother!! Fall River New Bedford!! Cashflow properties!!

Cheers!

I live near boston and have yet to find anything in the state that makes sense. What's fall rivers outlook. It's always been a rough area in my mind with not much upside. I'd love to be wrong.
What do you guys think about Worcester?

@Rob D.

Worcester I am looking into right now.

I know many investors with multiple properties in Worcester, and swear by it as well as investors who wouldn't consider looking into it. 

Look at Neighborhood Scout .com and City - Data .com to start learning about the individual communities in Mass 

Worcester is a great place to invest. Based on recent investment & growth in the city, it's prime to get even better.

There was an article in the news about the influx of real estate investors moving into Worcester from Boston based on drying up returns in the city. 

If you know your neighborhoods in Worcester, investing there is really a no-brainer.

I was able to purchase a 4-unit in Haverhill for just over $400,000.

Rents are totaling $4,500 but have potential for more.

The deals are out there you just have to keep looking and prepare yourself as best as you can so when the time comes you can pull the trigger, and quickly.

Best of luck!

Was that haverhill deal an MLS deal or did you find that? For me that investment is too risky, that's 88 months rent. Ideally I want to be under 65 months rent. I'm glad its working out for you!

Curious how you found it?

Originally posted by @Rob D. :

Was that haverhill deal an MLS deal or did you find that? For me that investment is too risky, that's 88 months rent. Ideally I want to be under 65 months rent. I'm glad its working out for you!

Curious how you found it?

 I also like the Worcester market.  There are some good spots near the dental school and downtown that can get good returns and med students can make great tenants.  You are probably best finding a local to the area though to find the best deals.

Worcester absolutely has some gems, if you know where to look. You can find some $200K 3-unit properties that can barely generate $600/m (per unit) because they are in a bad area, and the same exact unit in a more desirable location 2 miles away can go for $250K but generate $1100/m per unit. I was lucky enough to grab a property from MLS that, after a remodel, is nearing the 3% rule with revenue production. I wouldn't expect that without decent funds to allocate towards remodeling a fixer-upper, but there are 2% properties in this market if you purchase wisely.

Originally posted by @Michael Miller :

Worcester absolutely has some gems, if you know where to look. You can find some $200K 3-unit properties that can barely generate $600/m (per unit) because they are in a bad area, and the same exact unit in a more desirable location 2 miles away can go for $250K but generate $1100/m per unit. I was lucky enough to grab a property from MLS that, after a remodel, is nearing the 3% rule with revenue production. I wouldn't expect that without decent funds to allocate towards remodeling a fixer-upper, but there are 2% properties in this market if you purchase wisely.

 Mike, can you tell us what areas are better than others?

Hi Rob- without trying to be too vague, honestly it depends on your investment strategy. There are upwards of a dozen colleges in Worcester so if you're tolerant towards charging high-rent to college kids who are using their parents money but will beat up on the property and use 80% of their security deposit, there's a market for that. Contrary to that model- there are more suburban parts of Worcester that might not yield quite that level of annual return BUT attract long-term tenant families who will take care of your property and require little hand-holding year over year. Personally I love Worcester because no matter what your buying/investment strategy is, there's a market for it in this city. Just be sure to use a good Realtor who knows the area because purchasing in the wrong area could quickly turn into a nightmare (like any city).

Hi @Michael Miller I'm not understanding what you mean by generate $600/m (per unit) or but generate $1100/m per unit. Are you referring to cash flow or the gross rent? Also I've done a lot of deals in Worcester and have not seen anything that hits 3%, how long ago did you buy the property you are speaking of?

Hi @Mike Duran . Sorry for the confusion, I was referring to gross rent. As you know Worcester has some awful areas of town where monthly rent for a distressed unit in a bad area can barely escape the $600s. For my scenario- I purchased a unit in 2015. Rent was going for 1100/m for one unit and 800/m for the other two. It was in decent condition and in a great area, but VERY outdated. It went through a significant rehab and is now renting for 1700-1800 per unit. Without the remodel it I don't think i could have ever rented the units for more than 1200/m, but my point was that the location was a key factor in being able to drive that rent up more.

Ok, That was what I though you meant, I just looked at some pics of the place, seems to have a decent yard but it also looks like it had some fire damage on the first floor. I'm impressed you were able to get $1,700 for a 3 bedroom in Worcester, even if it is in a nice area, is that with students or long term market tenants?

Good due-diligence :) Sits on a double lot (close to 1/4 acre I think) which is okay for Worcester but nothing extravagant by any means. When I purchased the home I was planning on doing a 5-year flip where I'd spend a year or two in each unit and make minor updates as I moved around the building, but after only 8 months of living in the property a tenant's appliance-fire in the kitchen led me to rethink my strategy and ultimately remodel all the units at once. I was pleasantly surprised to lock tenants up at that price as well especially given they are 1 ba but the location was hard to beat. No students currently but it is a mix of young professionals and 1 fam

@Rob D. That was on MLS, it was up there for only about a week as there was a good amount of competition.

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