Strategy with purchase of family members home

Rental Property Investor · Watertown, MA · Member since 2019 · 14 posts · 8 votes

Hi,

I'm new to REI and have been doing my research for some time now. I have a family member who is looking to sell their 3-family house at a rate lower then market in order to keep it in family in the next year or two. I'm new to REI and was listening to the BP podcast about when you are new to REI to first come up with your niche. I'm thinking if I do purchase this property, which is valuable but would need some TLC, should my niche then be rentals since I would want to keep it in the family? Or would it still make sense to look into other REI niches even though I'm starting with a rental? Does anyone have advice on how to go about this?

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Brian Ellis

Rental Property Investor · South shore, MA · Member since 2017 · 1k+ posts · 1k+ votes

HI Alan,

Welcome to BP.

I believe you create a niche with experience. I say this because I have often "rolled with the punches", and taken different approaches the more experience I get.

Getting a 3 family in the greater Boston area, believe market value, is a great opportunity. Fix it up and watch how much equity you create.

Good luck!

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Brian Ellis
Rental Property Investor · South shore, MA · Member since 2017 · 1k+ posts · 1k+ votes
7y
HI Alan,
Welcome to BP.
I believe you create a niche with experience. I say this because I have often "rolled with the punches", and taken different approaches the more experience I get.
Getting a 3 family in the greater Boston area, believe market value, is a great opportunity. Fix it up and watch how much equity you create.
Good luck!
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Alan McDonald
OP
Rental Property Investor · Watertown, MA · Member since 2019 · 14 posts · 8 votes
7y
@Brian Ellis Thanks Brian, yeah I believe I will be the same way of rolling with the punches and just adapting as I go. If you ever in Watertown area and have time, let me know! Would love to run ideas by you.
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Justin Rank
Investor · Winhall, VT · Member since 2016 · 106 posts · 44 votes
7y
I'd jump all over this. Just make sure it is actually a good deal. I wish my family had a triple in the Boston metro. : )
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Alan McDonald
OP
Rental Property Investor · Watertown, MA · Member since 2019 · 14 posts · 8 votes
7y
@Aaron Belt thanks Aaron for the positive energy! I'm excited to get officially started on my REI journey. That was the thing is that it has been operating with negative cash flow for years and it wasn't treated as a business so I want to make this house back to the blessing it truly is for the fam. What was the House Academy course you mentioned? Does it cover multiple strategies or focus on a specific one/ what was your biggest take away from the course?
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Alan McDonald
OP
Rental Property Investor · Watertown, MA · Member since 2019 · 14 posts · 8 votes
7y
@Justin Rank yeah I definitely want to jump in but I know it will need so relatively major work. I’m trying now to get estimates on repairs and maintenance and looking now on saving up enough cash reserves to get the mortgage for this. Little nervous since taken my life savings to get the mortgage but I know it’s a great investment if I do this wisely
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Brian Ellis
Rental Property Investor · South shore, MA · Member since 2017 · 1k+ posts · 1k+ votes
7y
Originally posted by @Alan McDonald:
@Brian Ellis Thanks Brian, yeah I believe I will be the same way of rolling with the punches and just adapting as I go. If you ever in Watertown area and have time, let me know! Would love to run ideas by you.

Would love to find time in the future to talk RE! Let’s stay in touch

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Dan K.
Rental Property Investor · Boston, MA · Member since 2012 · 257 posts · 139 votes
7y
Hi @Alan McDonald -- If you're listening through the BP you'll stumble upon a concept of an "unfair advantage." Getting in on this closely owned multi family in the Boston area is your unfair advantage. In addition, you'll probably have some insight into what needs to be fixed and rehabbed.
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Alan McDonald
OP
Rental Property Investor · Watertown, MA · Member since 2019 · 14 posts · 8 votes
7y
@Dan K. Yeah good point, I know the property very well and what repairs have been done and need to be done. It's funny how even with the advantage I feel cautious with planning and numbers; partly because this is all new to me. At the end of the day though I know this is a blessing and a way to get my foot in REI
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Lien VuongBusiness Member
Real Estate Agent · Boston, MA · Member since 2018 · 2k+ posts · 1k+ votes
7y
I think it's too early in your investing journey to determine your niche, instead you should be gaining the knowledge right now and just do the math on how this property makes sense on paper. You're privy to a great potential deal so focus on how you can capture it when they give you the chance to buy it and save your reserves for the repairs you're anticipating on.
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Alan McDonald
OP
Rental Property Investor · Watertown, MA · Member since 2019 · 14 posts · 8 votes
7y
@Lien Vuong thanks Lien, I see what you are saying, I think I was talking about niche so that I can narrow my area to focus on and learn specifically in that area but after reading your comment, you are right.. I need to take it all in and learn about the various areas which will then direct me towards my niche over time. I am trying to put my numbers on paper now which from a newbie perspective I just don’t know how solid/accurate my system and numbers are.. I guess I won’t ultimately know until I apply it once I purchase the house. Just want to know I did my due diligence and plan as much as I can for when I get the green light to buy it
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Dan K.
Rental Property Investor · Boston, MA · Member since 2012 · 257 posts · 139 votes
7y
@Alan McDonald -- If you are getting the property for under fair market value, you can look at it this way -- worst case scenario you put it on the market and sell it.
One thing to keep in mind -- will the family be upset if you sell the property in 6 months, 6 years?
Perhaps the owner is willing to give you some owner financing to help make the deal happen.
Personally, I think this is a great opportunity.
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Alan McDonald
OP
Rental Property Investor · Watertown, MA · Member since 2019 · 14 posts · 8 votes
7y
@Dan K. Hi Dan, yeah they would be upset if I sold it especially in near future and so would I. It is also sentimental to keep it in the family but how it’s been operating is always in negative cash flows for various reasons and I want to make it back to the blessing it was intended to be for my family and not a curse so yes I plan on buy and holdddddddd lol
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Paul Castillo
University Place, WA · Member since 2019 · 11 posts · 6 votes
7y
One of my first two properties is a family home and it's been a great deal for myself and the seller. It might not be your "niche" but it will be a good experience and add a tool to your tool belt.
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