Real Estate Agent · Worcester, MA · Member since 2018 · 519 posts · 410 votes
5y
So true Andrew, There is so much money chasing Worcester right now, since rents have jumped so much over the last 3 years. This is depressing the CAP rates from 10% 3 years ago to about 6% now. But also keep in mind, Location and Quality are the big drivers of RENTS and QUALITY of TENANTS. If you are in poor access locations or you have lame/tired units, you will never get good tenants who will stay.
Rental Property Investor · Brookline, MA · Member since 2013 · 1k+ posts · 777 votes
5y
@Chelsea Owusu - We own 3 places. Two of them are in NH and another is in Ohio.
Worcester is definitely a hot market in terms of increasing rents and increasing purchase prices. Are you looking to house hack or buy pure investment properties?
Rental Property Investor · Boston, MA · Member since 2020 · 10 posts · 4 votes
5y
@Aaron Montague nice! You’ve got quite the portfolio. Was it difficult buying out of state?
Agreed. Definitely a growing market which is why Im trying to get in on a deal now before prices are too high. I also grew up there so Im looking to house hack w/ an FHA or Mass Housing
Rental Property Investor · Brookline, MA · Member since 2013 · 1k+ posts · 777 votes
5y
:)
Go quickly if you want into Worcester.
Buying out of state isn't bad, you just need to put together a team. The team is a property manger, realtor, handyman, insurance, and finance folks. Once those folks are in place it makes looking out of state quite a bit easier.
@Chelsea Owusu - We own 3 places. Two of them are in NH and another is in Ohio.
Worcester is definitely a hot market in terms of increasing rents and increasing purchase prices. Are you looking to house hack or buy pure investment properties?
Hey Aaron , if like to pick your brain regarding Ohio. what city do you own in and how do you like your property manager? im thinking about buying in Dayton
Rental Property Investor · Brookline, MA · Member since 2013 · 1k+ posts · 777 votes
5y
@Kareem Johnson - Hit me up with a message or start a thread with your questions and tag me.
@Chelsea Owusu - Getting ripped off is always an issue. Start with a good set of refences then start chatting with people. Owning your own place, doing a bit of property management, fixing the proverbial toilet, and getting a good grasp of what you are hiring folks to do is a great place to start. With that experience in your pocket you'll be able to talk to people in the business on a more level playing field.
Housing hacking is a great beginning to the journey because it gives you all of the above AND increases your monthly income :) I'm going to steer you away from the FHA line in Worcester because of the competitive market. You are probably going to lose a few deals if you come with FHA financing due to the slowness of the process. There are lenders out there doing 5% down, owner occupied multi-family purchases. I'd start calling around and see who is doing that in MA :)
Best of luck with your search. If you find a place and want help running the numbers, post it up for all to see and we'll give our opinions.
Investor · Worcester, MA · Member since 2020 · 1k+ posts · 1k+ votes
5y
@Chelsea Owusu - I'm in the process of house hacking in Worcester currently. Closed on my 3 family in December 2020 using a FHA loan 3.5% down. I will mention that if you do make offers with FHA financing, you most likely will have to go above asking. Super competitive market and high price is the only thing that will make a fha loan stand out among the many full cash offers. But with the low out of pocket costs, solid cash on cash returns and a long time horizon in mind, it could make total sense. I am happy to provide insight into the Worcester market. Feel free to reach out.
I am a new rental property investor looking to make connections in the state of Massachusetts. Don’t hesitate to reach out!
Hi Chelsea (and everyone else)! I am also a new* investor in Boston and trying to learn as much as I can about the market. Planning to try to take down a $1mm+ fourplex in the fall/winter. Happy to chat with anyone and look forward to learning more about the market!
Rental Property Investor · Boston, MA · Member since 2020 · 10 posts · 4 votes
5y
@Andrew Freed what a coincidence, my brother closed on about the same deal in December, congrats! How is it being a landlord thus far? Agreed. My biggest fear is that I will rush, and end up overpaying for a deal. Any tips on FSBOs or off market deals? Primarily multi-unit
Rental Property Investor · Boston, MA · Member since 2020 · 10 posts · 4 votes
5y
Hi @Tom Wagner ! Welcome to Mass (almost). A 4plex would be a nice addition to your portfolio. The downside I’ve noticed w/ properties in Boston is that they are high priced & the market appears saturated (but I will leave that to more experienced investors). Rising cities in MA are Worcester & Lowell which I would say are worth checking out
Real Estate Agent · Worcester, MA · Member since 2020 · 1 post · 1 vote
5y
Hi @chelsea Owusu! I’m a local realtor and investor in the city of Worcester. I can give you an overview of what’s happening in the city if your interested in investing in the Worcester area. Send me a message so we can link up.
Investor · Worcester, MA · Member since 2020 · 1k+ posts · 1k+ votes
5y
@Chelsea Owusu - It's going well, have all of my units rented out (I also have a condo in Boston) but a ton of unexpected costs upfront. I feel like whenever you get any new investment, there is always a saturation period where a ton of costs occur up in the beginning. Water heater broke, had a gas leak, but all in all happy with the decision.
Regarding off market or for sale by owners, the only way you would be able to find deals like this is if you have solid financing, either a hard money loan or cash. If you are utilizing conventional loans, it would be very unlikely that these opportunities will be available to you. They tend to like fast closings.
Additionally, it is a super competitive market so off market is a very hard find these days in the MA market. If you are restricted by financing and still want to seek these opportunities, the only way you would have access to such deals is putting in "sweat equity" meaning direct mailing campaigns, driving for dollars, etc. If you do not plan on going that route, the MLS is probably the best bet for you.
Investor · Worcester, MA · Member since 2020 · 1k+ posts · 1k+ votes
5y
@Tom Wagner - Welcome! MA is definitely a highly priced market, but with that comes a higher appreciation likelihood so there's always a give and take. Feel free to reach out if you have any market related questions on multis. Happy to provide guidance in anyway I can.
Boston, MA · Member since 2020 · 5 posts · 0 votes
5y
@Chelsea Owusu
Hi Chelsea! I’m a newbie to investing and I’ve been looking at Worcester since the prices are way lower than Boston. Boston is too competitive! I’m happy I stumbled across this post because it told me my intuition was right (:
Wishing you the best in your journey. I hope to hear updates of future purchases soon!
Rental Property Investor · Boston, MA · Member since 2020 · 10 posts · 4 votes
5y
Hey @Ashley Njiru !! Thanks for reaching out :) so glad meeting someone from the local area! Yes, your intuition was right for sure. I think Boston will be a place I delve into on my 2nd/3rd property once I’ve got some experience under my belt.
Rental Property Investor · Boston, MA · Member since 2020 · 10 posts · 4 votes
5y
@Andrew Freed oh wow, did the water heater & gas leak not show up in the inspection? I've been thinking of condos for my next deal, but HOA fees sound like they'd eat up my profits. Any insight?
Good point. My agent said he’d represent me in these scenarios, but it is likely the seller will want cash or hard money. These deals seem more attainable price-wise, so Im not going to disregard them outright
Yes, rn Im limited to FHA or Mass Housing. I get MLS listings from my agent so hopefully I get accepted on a deal soon👌🏾 thanks for all the info!
Investor · Worcester, MA · Member since 2020 · 1k+ posts · 1k+ votes
5y
@Chelsea Owusu - Water heaters came up as old during inspection (but not broken(, however when you're facing multiple cash offers above asking, it would hurt your chances of getting the property is you haggle on such minor items. The gas leak was missed but was super minor, only cost $50 to fix.
Yes, I've owned a condo for about 5 years and revitalized a condo association in disarray. The HOA is the major line item that will make or break your deal. Investing in a condo unit is very much putting your trust in other individuals. You want to be wary of the following issues with HOA fees:
1. Association - Having the right people leading the association is critical to your units success. If they are not fiscally responsible and don't put the proper money aside / look for cost saving measures, you could be hit with a "special assessment" for a large capital project. In my particular case (I'm actually the one that enacted this to bring our finances into a good situation), I had to pay $3,000 out of pocket and there were 12 other units. Good management of your condo association can make or break the deal.
2. HOA - This is lost money that you will never see again. If a unit has a super high HOA, run the other way. What I've seen as responsible based on keeping the property in good condition are between $150-$300 per unit. I've seen HOA's charge as much as $600.
3. HOA - Not all HOAs are created equal. Some cover more items than others. For instance, my HOA only covers water, overhead, and common area electricity. Some other HOA's cover more or less.
In my opinion, condos are probably the hardest to cash flow b/c you are putting the trust of maintenance of the property in other owners hands, essentially giving away some aspects of control on the deal. And as we all know, capital expenditures / repairs can turn a great deal into a bad one really quickly.
@Tom Wagner - Welcome! MA is definitely a highly priced market, but with that comes a higher appreciation likelihood so there's always a give and take. Feel free to reach out if you have any market related questions on multis. Happy to provide guidance in anyway I can.
I live in Dallas but currently looking at acquiring multifamiles in Worcester. Would you mind sharing some info about your investment? i.e list price, purchase price, rehab costs if any, how much each unit or room rents out for, zip code for the property etc... I look forward to your reply, thanks!
Investor · Worcester, MA · Member since 2020 · 1k+ posts · 1k+ votes
5y
@Gerardine Tshouongang - Of course, I purchased my property @ $560K in the Grafton Hill / Vernon Hill area (zip code 01604). This was pretty much a turnkey property with each unit requiring some minor aesthetic upgrades. It's probably about $10K of renovations. Each unit is 3 bed 1 bathroom and after full renovations, I can get about $1600 - $1700 per unit.
Worcester is a really tough market to purchase in due to the investor interest. Usually you are up against multiple investors who offer quick closing and cash offers. Let me know if you have any other questions.
Real Estate Agent · Worcester, MA · Member since 2018 · 519 posts · 410 votes
5y
So true Andrew, There is so much money chasing Worcester right now, since rents have jumped so much over the last 3 years. This is depressing the CAP rates from 10% 3 years ago to about 6% now. But also keep in mind, Location and Quality are the big drivers of RENTS and QUALITY of TENANTS. If you are in poor access locations or you have lame/tired units, you will never get good tenants who will stay.
Lender · Boston, MA · Member since 2018 · 171 posts · 137 votes
5y
Great insight here. I love the idea of Worcester - although it certainly is getting its legs and becoming very hot. I've invested in Boston and have great returns - although value add is a must in order to get strong returns.
Looking forward to hearing more about you guys getting started!
@Gerardine Tshouongang - Of course, I purchased my property @ $560K in the Grafton Hill / Vernon Hill area (zip code 01604). This was pretty much a turnkey property with each unit requiring some minor aesthetic upgrades. It's probably about $10K of renovations. Each unit is 3 bed 1 bathroom and after full renovations, I can get about $1600 - $1700 per unit.
Worcester is a really tough market to purchase in due to the investor interest. Usually you are up against multiple investors who offer quick closing and cash offers. Let me know if you have any other questions.
Thank you so much for this information. You are right, Worcester is a tough market. Did you work with a buyer’s agent/broker to acquire the property? If yes, would you mind sharing their information? Thank you