House Hacking in Greater Boston Area
Hi everyone, rookie here and my first time posting! I would love to get your thoughts on this situation. I grew up around Boston and love the area. My boyfriend and I are looking to buy a small multifamily and would like to house hack in the Greater Boston Area. I tried using the rental calculator because we would love to cash flow but it seems like to break would be a huge accomplishment. We have no issue sharing a space with others/living in one room and renting out all the others. We both have been working for two years, have good credit and no debt but are looking into a FHA loan because we don't have a ton of savings. Our question is, does this sound like an impossible task? We want to be realistic but also not have a small mindset. I really appreciate any feedback. Thank you!
Hey Katarina,
If you plan to house hack a multi-unit property, then I wouldn't worry too much about the monthly cashflow right of the bat. I'm not familiar with the Boston area, but I would have to guess your out-of-pocket cost every month would be way less (if not zero) house hacking than if you rented elsewhere or purchased a single family. If you "break even" while house hacking, that's great! Once you move out down the road, then you would start cashflowing.
House hacking is probably the best way to get started in REI, and FHA (3.5% DP) makes that even better. Not impossible by any means. Best of luck!
Hi Katarina, I actually had a similar conversation with another BP member yesterday so would be happy to connect for a conversation if that helps. I grew up in the Boston area and can share how I got started in this market, especially with the challenge of finding cash flowing properties in the Greater Boston area. I am an agent/partner with Compass in downtown Boston, but I have a background specifically related to investment properties as I hold my CFA designation and spent nearly a decade in investment management while building a RE portfolio on the side before transitioning full-time to RE.
Scared me at boyfriend and I. Respectfully, I would wait until marriage to buy a house with a partner. It will just be annoying, messy, and unnecessary should you break up. Good luck!
Quote from @Michael Vazza:Hi Michael/ Katarina,
Hi Katarina, I actually had a similar conversation with another BP member yesterday so would be happy to connect for a conversation if that helps. I grew up in the Boston area and can share how I got started in this market, especially with the challenge of finding cash flowing properties in the Greater Boston area. I am an agent/partner with Compass in downtown Boston, but I have a background specifically related to investment properties as I hold my CFA designation and spent nearly a decade in investment management while building a RE portfolio on the side before transitioning full-time to RE.
Do you mind if we connect for a conversation on this topic? I am also trying to house hack in the greater Boston area, but not finding anything that is even close to breakeven. Would love to hear both sides of your journeys so far.
Hi Tyler, I just shot you a message and of course - happy to share how I got started. I very much agree with Troy DeLong's comment. Very hard to expect high cash flow off the bat in an area such as Boston, especially on your first property. But you can still make strong returns, as well as learning the in's and out's of the property itself for future experience.
Quote from @Troy DeLong:
Hey Katarina,
If you plan to house hack a multi-unit property, then I wouldn't worry too much about the monthly cashflow right of the bat. I'm not familiar with the Boston area, but I would have to guess your out-of-pocket cost every month would be way less (if not zero) house hacking than if you rented elsewhere or purchased a single family. If you "break even" while house hacking, that's great! Once you move out down the road, then you would start cashflowing.
House hacking is probably the best way to get started in REI, and FHA (3.5% DP) makes that even better. Not impossible by any means. Best of luck!
Hi Troy, thanks for the reply! I’m getting caught up with the idea of cash flow because it feels like a safety net. Rent in Boston is very expensive so finding a way to make house hacking less expensive would be a win. It’s encouraging to hear your positive feedback!
Quote from @Michael Vazza:Hi Michael, thanks for your response! Yes, I’d love to connect and hear your story. I’m grateful for any advice and to learn from others with experience in the area. I’ll send you a message!
Hi Katarina, I actually had a similar conversation with another BP member yesterday so would be happy to connect for a conversation if that helps. I grew up in the Boston area and can share how I got started in this market, especially with the challenge of finding cash flowing properties in the Greater Boston area. I am an agent/partner with Compass in downtown Boston, but I have a background specifically related to investment properties as I hold my CFA designation and spent nearly a decade in investment management while building a RE portfolio on the side before transitioning full-time to RE.
Quote from @Tyler Buckner:
Quote from @Michael Vazza:Hi Michael/ Katarina,
Hi Katarina, I actually had a similar conversation with another BP member yesterday so would be happy to connect for a conversation if that helps. I grew up in the Boston area and can share how I got started in this market, especially with the challenge of finding cash flowing properties in the Greater Boston area. I am an agent/partner with Compass in downtown Boston, but I have a background specifically related to investment properties as I hold my CFA designation and spent nearly a decade in investment management while building a RE portfolio on the side before transitioning full-time to RE.
Do you mind if we connect for a conversation on this topic? I am also trying to house hack in the greater Boston area, but not finding anything that is even close to breakeven. Would love to hear both sides of your journeys so far.
Hi Tyler, thanks for your response! Yes, I would love to connect. It’s exciting to speak to others in the area working towards a similar goal. I’ll send you a message!
Quote from @Katarina Bishop:
Hi everyone, rookie here and my first time posting! I would love to get your thoughts on this situation. I grew up around Boston and love the area. My boyfriend and I are looking to buy a small multifamily and would like to house hack in the Greater Boston Area. I tried using the rental calculator because we would love to cash flow but it seems like to break would be a huge accomplishment. We have no issue sharing a space with others/living in one room and renting out all the others. We both have been working for two years, have good credit and no debt but are looking into a FHA loan because we don't have a ton of savings. Our question is, does this sound like an impossible task? We want to be realistic but also not have a small mindset. I really appreciate any feedback. Thank you!
Don’t ever buy with your boyfriend, a lot of things could go wrong.
If you feel secure with you bf enough to buy a property I would encourage you to save both of your FHAs individually so you can purchase 2 properties with it with the exception that you cannot qualify for something significant separately. Househacks are possible in Boston but it's not going to be Boston proper because the purchase prices are higher ($750-1mm) unless you do single bed rentals mixed with Airbnbs. The alternative to that is expanding outside of Boston to 30-1h where you can find better priced assets and less competition using FHA.
Quote from @Katarina Bishop:It’s absolutely possible to find cash-flowing multis in “Greater Boston” to househack. I run a team of 30+ investor focused agents and many of them are living in Househack’s themselves. The goal is normally to “break-even”/live for free when you are living there then to have the property cashflow when you move out. The 2 strategy I normally recommend are:
Hi everyone, rookie here and my first time posting! I would love to get your thoughts on this situation. I grew up around Boston and love the area. My boyfriend and I are looking to buy a small multifamily and would like to house hack in the Greater Boston Area. I tried using the rental calculator because we would love to cash flow but it seems like to break would be a huge accomplishment. We have no issue sharing a space with others/living in one room and renting out all the others. We both have been working for two years, have good credit and no debt but are looking into a FHA loan because we don't have a ton of savings. Our question is, does this sound like an impossible task? We want to be realistic but also not have a small mindset. I really appreciate any feedback. Thank you!
1. Look for a 3-4 family with 1 smaller unit to live in that fits the FHA maximum lending guidelines (1,190,000 for a 3 family or $1,480,000 for a 4 family in Suffolk county). The remaining units should cover all or almost all of the carrying expenses.
2. Look for a 2 family with lots of bedrooms (7+). You can use a 5% conventional loan to buy it with no PMI. Live in the larger unit and rent out the extra bedrooms. Or even better find the 2 family with an ADU (3 units). Live in the “bonus unit” and rent out the other ones. In many markets this works out extremely well.
Doing this in markets like Cambridge or a Newton will be extremely difficult but we’ve successfully helped clients with these Strategies in Malden, Waltham, Framingham, Quincy, and many more. We helped over 100 people buy multis last year in MA and NH and many of them used FHA or low downpayment conventional loans.
best of luck,
Jon
-
Real Estate Agent MA (#9559678)
- 978-710-8611
- http://www.candorealty.com
- [email protected]
Hey!
My girlfriend and I did exactly this about 15mo ago. We did a house hack BRRRR and are now on to our third unit.
I have a bunch of tips, resources and excel docs to help with the search. Happy to connect and provide any insight. It is absolutely the path to go in a HCOL area like Boston!
Quote from @Lien Vuong:
If you feel secure with you bf enough to buy a property I would encourage you to save both of your FHAs individually so you can purchase 2 properties with it with the exception that you cannot qualify for something significant separately. Househacks are possible in Boston but it's not going to be Boston proper because the purchase prices are higher ($750-1mm) unless you do single bed rentals mixed with Airbnbs. The alternative to that is expanding outside of Boston to 30-1h where you can find better priced assets and less competition using FHA.
Hi Lien, thanks for your response. Unfortunately, I don't think we can qualify for something significant separately. I wish we could because that is a great idea. We are definitely open to surrounding areas!
Quote from @Jonathan Bombaci:
Quote from @Katarina Bishop:It’s absolutely possible to find cash-flowing multis in “Greater Boston” to househack. I run a team of 30+ investor focused agents and many of them are living in Househack’s themselves. The goal is normally to “break-even”/live for free when you are living there then to have the property cashflow when you move out. The 2 strategy I normally recommend are:
Hi everyone, rookie here and my first time posting! I would love to get your thoughts on this situation. I grew up around Boston and love the area. My boyfriend and I are looking to buy a small multifamily and would like to house hack in the Greater Boston Area. I tried using the rental calculator because we would love to cash flow but it seems like to break would be a huge accomplishment. We have no issue sharing a space with others/living in one room and renting out all the others. We both have been working for two years, have good credit and no debt but are looking into a FHA loan because we don't have a ton of savings. Our question is, does this sound like an impossible task? We want to be realistic but also not have a small mindset. I really appreciate any feedback. Thank you!
1. Look for a 3-4 family with 1 smaller unit to live in that fits the FHA maximum lending guidelines (1,190,000 for a 3 family or $1,480,000 for a 4 family in Suffolk county). The remaining units should cover all or almost all of the carrying expenses.
2. Look for a 2 family with lots of bedrooms (7+). You can use a 5% conventional loan to buy it with no PMI. Live in the larger unit and rent out the extra bedrooms. Or even better find the 2 family with an ADU (3 units). Live in the “bonus unit” and rent out the other ones. In many markets this works out extremely well.
Doing this in markets like Cambridge or a Newton will be extremely difficult but we’ve successfully helped clients with these Strategies in Malden, Waltham, Framingham, Quincy, and many more. We helped over 100 people buy multis last year in MA and NH and many of them used FHA or low downpayment conventional loans.best of luck,
Jon
Hi Jon, thank you for all the helpful info! With the salaries my boyfriend and I are currently making I believe we would be able to get a house for around $600,000. Would this price still work for markets surrounding Boston? I'm happy to hear others are using this method and it's working out for them.
Quote from @Stormer Santana:
Hey!
My girlfriend and I did exactly this about 15mo ago. We did a house hack BRRRR and are now on to our third unit.
I have a bunch of tips, resources and excel docs to help with the search. Happy to connect and provide any insight. It is absolutely the path to go in a HCOL area like Boston!
Wow that is awesome, congrats! I'd love to hear about your journey and I am open to any tips/resources. I'll send you a message.
Quote from @Katarina Bishop:
Quote from @Jonathan Bombaci:
Quote from @Katarina Bishop:It’s absolutely possible to find cash-flowing multis in “Greater Boston” to househack. I run a team of 30+ investor focused agents and many of them are living in Househack’s themselves. The goal is normally to “break-even”/live for free when you are living there then to have the property cashflow when you move out. The 2 strategy I normally recommend are:
Hi everyone, rookie here and my first time posting! I would love to get your thoughts on this situation. I grew up around Boston and love the area. My boyfriend and I are looking to buy a small multifamily and would like to house hack in the Greater Boston Area. I tried using the rental calculator because we would love to cash flow but it seems like to break would be a huge accomplishment. We have no issue sharing a space with others/living in one room and renting out all the others. We both have been working for two years, have good credit and no debt but are looking into a FHA loan because we don't have a ton of savings. Our question is, does this sound like an impossible task? We want to be realistic but also not have a small mindset. I really appreciate any feedback. Thank you!
1. Look for a 3-4 family with 1 smaller unit to live in that fits the FHA maximum lending guidelines (1,190,000 for a 3 family or $1,480,000 for a 4 family in Suffolk county). The remaining units should cover all or almost all of the carrying expenses.
2. Look for a 2 family with lots of bedrooms (7+). You can use a 5% conventional loan to buy it with no PMI. Live in the larger unit and rent out the extra bedrooms. Or even better find the 2 family with an ADU (3 units). Live in the “bonus unit” and rent out the other ones. In many markets this works out extremely well.
Doing this in markets like Cambridge or a Newton will be extremely difficult but we’ve successfully helped clients with these Strategies in Malden, Waltham, Framingham, Quincy, and many more. We helped over 100 people buy multis last year in MA and NH and many of them used FHA or low downpayment conventional loans.best of luck,
Jon
Hi Jon, thank you for all the helpful info! With the salaries my boyfriend and I are currently making I believe we would be able to get a house for around $600,000. Would this price still work for markets surrounding Boston? I'm happy to hear others are using this method and it's working out for them.
Hi Katrina, +1 to everything Jon said! One thing to keep in mind with qualification as well is that on 2-4 unit properties you can use estimated (or actual/in-place) rental income to qualify for your mortgage. Using this strategy I was able to qualify for a $1.44mm mortgage on my house hack when I would've only qualified for about $800k without the rental income.
The specifics of this will vary from property to property but as you are looking your lender should be able to write updated pre-approvals on a house-by-house basis. Happy to chat further on this if you are (or anyone else is) interested!
Quote from @Tom Wagner:
Quote from @Katarina Bishop:
Quote from @Jonathan Bombaci:
Quote from @Katarina Bishop:It’s absolutely possible to find cash-flowing multis in “Greater Boston” to househack. I run a team of 30+ investor focused agents and many of them are living in Househack’s themselves. The goal is normally to “break-even”/live for free when you are living there then to have the property cashflow when you move out. The 2 strategy I normally recommend are:
Hi everyone, rookie here and my first time posting! I would love to get your thoughts on this situation. I grew up around Boston and love the area. My boyfriend and I are looking to buy a small multifamily and would like to house hack in the Greater Boston Area. I tried using the rental calculator because we would love to cash flow but it seems like to break would be a huge accomplishment. We have no issue sharing a space with others/living in one room and renting out all the others. We both have been working for two years, have good credit and no debt but are looking into a FHA loan because we don't have a ton of savings. Our question is, does this sound like an impossible task? We want to be realistic but also not have a small mindset. I really appreciate any feedback. Thank you!
1. Look for a 3-4 family with 1 smaller unit to live in that fits the FHA maximum lending guidelines (1,190,000 for a 3 family or $1,480,000 for a 4 family in Suffolk county). The remaining units should cover all or almost all of the carrying expenses.
2. Look for a 2 family with lots of bedrooms (7+). You can use a 5% conventional loan to buy it with no PMI. Live in the larger unit and rent out the extra bedrooms. Or even better find the 2 family with an ADU (3 units). Live in the “bonus unit” and rent out the other ones. In many markets this works out extremely well.
Doing this in markets like Cambridge or a Newton will be extremely difficult but we’ve successfully helped clients with these Strategies in Malden, Waltham, Framingham, Quincy, and many more. We helped over 100 people buy multis last year in MA and NH and many of them used FHA or low downpayment conventional loans.best of luck,
Jon
Hi Jon, thank you for all the helpful info! With the salaries my boyfriend and I are currently making I believe we would be able to get a house for around $600,000. Would this price still work for markets surrounding Boston? I'm happy to hear others are using this method and it's working out for them.
Hi Katrina, +1 to everything Jon said! One thing to keep in mind with qualification as well is that on 2-4 unit properties you can use estimated (or actual/in-place) rental income to qualify for your mortgage. Using this strategy I was able to qualify for a $1.44mm mortgage on my house hack when I would've only qualified for about $800k without the rental income.
The specifics of this will vary from property to property but as you are looking your lender should be able to write updated pre-approvals on a house-by-house basis. Happy to chat further on this if you are (or anyone else is) interested!
Thanks for your response! Oh wow I did not know that rental income could factor in. Yes, I will send you a message!
Hi Katerina!
My girlfriend and I are looking to house hack a multi-family in Quincy and were wondering how the process has been going for you and your partner.
Thanks!
Like everyone has said, be careful buying a property with your boy friend...you might end up getting married and buy more properties! It happened to me. I bought a 2-family house hack with my girlfriend in Beverly, MA on the North Shore. Then we got married. We closed on our second house hack in February in Salem, MA.
House hacking, in my opinion, doesn't need to cash flow from day 1. It NEEDS to drastically reduce your living expense to make any kind of sense. For example, my then girlfriend (now wife) and I were paying a combined $1850/month with our rents (She paid $1,100 and I pay $750). After we bought our 2 family, doing some rehab, raising rents, doing a refinance of our mortgage, we were each paying ~ $150/month out of pocket plus some in utlities, and gained over $200k in equity. We recently moved out and rent the second unit and clear $1,700 above our mortgage (which is not to be mistaken as all the expense of owning a rental).
A few tips, that some others have shared as well:
1) Try looking at 3 and 4 units buildings. Those have a better chance of cash flowing while you reside in the building.
2) 2 family that are larger in bed room size could also work for you if you are willing to live with roommates.
3) Value add properties will help build equity.
4) Have cash reserves when you are buying and keep adding until you have a good cash cushion.
5) If your property doesn't produce cash flow day one, then the big win is the money you are saving every month. Going back to my real life example: Going from $1850 (total rent we were paying) to total $300 out of pocket towards our mortgage, savings of $1550 every month! Use that excess cash to put towards bad debts, your next property, or other investments.
Sorry for the repeat information and advice. House Hacking does work and is very powerful! Good luck!
Jon
Quote from @Katarina Bishop:
Hi everyone, rookie here and my first time posting! I would love to get your thoughts on this situation. I grew up around Boston and love the area. My boyfriend and I are looking to buy a small multifamily and would like to house hack in the Greater Boston Area. I tried using the rental calculator because we would love to cash flow but it seems like to break would be a huge accomplishment. We have no issue sharing a space with others/living in one room and renting out all the others. We both have been working for two years, have good credit and no debt but are looking into a FHA loan because we don't have a ton of savings. Our question is, does this sound like an impossible task? We want to be realistic but also not have a small mindset. I really appreciate any feedback. Thank you!
Hello Katarina! Welcome to BP! That is so exciting that you and your bf are planning of investing soon! Your post was posted 29 days ago and I hope yall find a property! I would be very careful of investing with a bf tho... but if yall have a solid relationship then its all good. Just from the experience of other clients, it can be nightmare lol.
So I have been house hacking for almost a year now, if you are finding a duplex - just being realistic it may not cash flowing right now. on the other side, if it was a tri or fourplex then it may. House hacking doesnt necessarily meant cash flowing right away since yall are living on one unit.
Good luck out there and please feel free to connect with me if yall have any questions at all.
Quote from @Chris McKeeney:Hi Chris. At the moment we are familiarizing ourselves with analyzing the numbers and saving up more $$. We decided to start looking for a place next year. I would love to hear about your journey so far!
Hi Katerina!
My girlfriend and I are looking to house hack a multi-family in Quincy and were wondering how the process has been going for you and your partner.
Thanks!
Quote from @Jon McCarron:
Like everyone has said, be careful buying a property with your boy friend...you might end up getting married and buy more properties! It happened to me. I bought a 2-family house hack with my girlfriend in Beverly, MA on the North Shore. Then we got married. We closed on our second house hack in February in Salem, MA.
House hacking, in my opinion, doesn't need to cash flow from day 1. It NEEDS to drastically reduce your living expense to make any kind of sense. For example, my then girlfriend (now wife) and I were paying a combined $1850/month with our rents (She paid $1,100 and I pay $750). After we bought our 2 family, doing some rehab, raising rents, doing a refinance of our mortgage, we were each paying ~ $150/month out of pocket plus some in utlities, and gained over $200k in equity. We recently moved out and rent the second unit and clear $1,700 above our mortgage (which is not to be mistaken as all the expense of owning a rental).
A few tips, that some others have shared as well:
1) Try looking at 3 and 4 units buildings. Those have a better chance of cash flowing while you reside in the building.
2) 2 family that are larger in bed room size could also work for you if you are willing to live with roommates.
3) Value add properties will help build equity.
4) Have cash reserves when you are buying and keep adding until you have a good cash cushion.
5) If your property doesn't produce cash flow day one, then the big win is the money you are saving every month. Going back to my real life example: Going from $1850 (total rent we were paying) to total $300 out of pocket towards our mortgage, savings of $1550 every month! Use that excess cash to put towards bad debts, your next property, or other investments.
Sorry for the repeat information and advice. House Hacking does work and is very powerful! Good luck!
Jon
Hi Jon, thank you for all the helpful info! Wow $300 a month is amazing. We currently pay $1,950 a month and we would really love to reduce the amount. I’m from the north shore so I know that area pretty well; it’s good to hear it’s possible to house hack there as well. I would love to connect and hear more about your experience on the north shore!