Contemplating BRRRR/house hack in MA or out-of-state
Member since 2026 · 2 posts · 3 votes
Contemplating BRRRR/house hack in MA or out-of-state
15 Replies
- Chicago, IL · Member since 2026 · 3 posts · 0 votes1w
I think the biggest thing I'd look at here is whether the deal still works if the rental income doesn't come in exactly as expected. At $40k income, I'd be careful about stretching just to get into the market.
If you can find a 2–4 unit where the numbers work conservatively, the house-hack route could make sense. But you shouldn't limit yourself to MA just because that's where you live. It's worth comparing the numbers with a few out-of-state markets too.
I'd probably start by setting a maximum monthly payment that you're comfortable carrying even during a vacancy, then work backwards from there to determine what properties actually fit.
- 1wNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
no one but you can determine what you can afford and are comfortable with.
with that said, should you spend every last dollar you have on a random out of state property so that you can lose money on it? definitely not.
hope this helps
- 1wAshish AcharyaBusiness MemberCPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
Cameron, I’d be careful about choosing between Massachusetts and out of state based only on the purchase price. With $350K to $400K of financing and only about $40K available for the down payment and closing costs, I’d start with the numbers on a property that you could realistically afford to carry if one unit stayed vacant for several months.
For a house hack, I’d calculate the payment, taxes, insurance, utilities, maintenance, vacancy, and reserves, then subtract realistic rent from the other units. I’d also stress test the deal with a longer vacancy period rather than assuming you’ll have a tenant immediately. Your first property does not necessarily need to be the highest cash flow property available. It needs to be something you can comfortably carry while you learn.
There is also a tax angle worth considering. With a 2 to 4 unit property where you live in one unit and rent the others, the rental portion can generally have different tax treatment from the portion you occupy. Depreciation, repairs, and eventually a refinance or sale should be planned from the beginning. If you look out of state, remember that you may also be dealing with another state's tax and reporting requirements, so a slightly cheaper property is not automatically the better investment.
Feel free to DM me, I'd be happy to send over our BRRRR Analyzer so you can compare the Massachusetts and out of state scenarios using the actual numbers.
INVESTOR FRIENDLY CPA®5240 Reviews - 1wStacy RaskinBusiness MemberLender · Member since 2022 · 1k+ posts · 511 votes
As far as investing out of state, there are also investors who decide to invest in single family or multiamily turnkey or near turn key properties in lower priced markets in the Midwest or South. There is less money needed to get into the deal and also it's easier to cash flow. This would be for a non owner occupied rental property. If you're going to do a BRRRR out of state, investors will sometimes find that it takes time to find contractors and a team that they can work well with and delivers on what they say they will do. Also, not sure if you or someone else would be there to supervise the rehab and the timeline of when construction line items are supposed to be completed. If a non owner occupied investment property, there are fix and flip and DSCR loan options.
If you want to live in the property and house hack, perhaps getting a smaller and cheaper property in your local market that would more easily cash flow but I know that in some markets, it can still be difficult to buy and cash flow on properties.
Based on the income you mentioned, not sure if doing a BRRRR and house hacking in your local market based on the details you gave would be the best strategy for success as usually not everything goes to plan with the rehab or renting out the units so it's important to have cash reserves. You don't want to have a lot of extra stress and be worried about making your house payment if not everything goes exactly to plan. Happy to connect to discuss further.
Bright Skyline518 Reviews - Technology · Member since 2023 · 79 posts · 36 votes1w
Here's the stress test in actual numbers, because that's the right worry. $40K after tax is about $3,330 a month. A $400K loan at around 6.5% is roughly $2,530 a month principal and interest. Add taxes, insurance and mortgage insurance and you're likely at $3,200 to $3,400 all-in. If the other unit goes vacant for two months, you're covering almost your entire take-home.
That doesn't mean don't do it. It means:
1. Build the reserves before you buy. Aim for 3 to 6 months of full payment in cash after closing, not counting your down payment.
2. Look for a 3-family if you can. On a 2-family, one vacancy is half your rent. On a 3-family, one vacancy is a third, and FHA's self-sufficiency test on 3–4 units forces the deal to cash flow on paper anyway.
3. Stay local for the first one. Living in it is your big advantage: owner-occupied financing with 3.5% to 5% down, and you're on site to manage and fix things cheaply. Out of state you lose both and need 20% to 25% down on a non-owner loan.
If Brockton prices are out of reach, nearby markets like Fall River, New Bedford and Worcester are worth running numbers on before going out of state.
- 1wArman AhmedPro MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 952 votes
Quote from @Cameron Trieber:
I am a first time home buyer/real estate investor currently looking for a 2-4 unit property to do some light rehab, rent, and refinance and live in one of the units. I have spoken to multiple lenders, and they seem to pre approve me around 350-400k. I can put down more than 5% but this price range makes it VERY difficult to find any properties I can afford in my area even if I were to have a larger down payment. Also worth noting, I only make 40k annually after tax and that makes me worried that if I have vacancy for whatever reason (or after I buy the property I have trouble finding an initial tenant), I wont be able to afford my monthly payment. Is it worth it to try and find a deal in MA or should I just consider investing out of state? I need some advice, please let me know if anybody has thoughts on this!
With your income and the prices you’re seeing in MA, I’d seriously compare the numbers out of state before stretching yourself too thin. A Midwest market can give you a much lower entry point and still offer small multifamily opportunities with value-add potential. If the deal works after vacancy, repairs, and reserves, being out of state isn’t necessarily a dealbreaker as long as you have a good local team.
- Specialist · NJ · Member since 2022 · 1k+ posts · 653 votes1w
It's not a bad strategy, but it's a narrow one.
2 - 4 unit
Not much needed in rehab
House Hack worthy scenario
350k - 400k price range
You may search for two years before you find that exact investment. It sounds like you were pre-approved through a credit union or a VA situation, which is definitely the better route, as long as you don't have a complete gut on your hands.
I like the 2 - 4 unit strategy, if you are going to hold something why not 4 rents instead of 1. I've priced and closed dozens and dozens of DSCR loans on multis. they always have a great DSCR. Where to find them is the issue. I don't think the ones on market will pencil because the market keeps price inflated on this asset class. Especially if it is listed. Wholesalers know investors will pay a premium for a 2 - 4 unit so when you get them that way you absorb that premium which negates any "wholesale" feature of the price. I see this asset class in auctions and foreclosures. I advised a client to buy a duplex, cash for 26k off an auction. They sold it as is in 3 months for 43k. They weren't ready for nor did they have the team in place for a BRRRR, but if they were, what a great price to start at, 26k, the entire project would cost 100k. The rents would be 1300/side.. He'd refi at 150k value. Get a 70%% DSCR to cover his money back and closing costs and have a 105k mortgage on a duplex. The PiTI on that is probably 1k - 1100. He'd be collecting 2600. I see good duplexes, tris, quads all the time at auction. Earlier this year, I say someone buy a 12 unit building with a commercial space on bottom for 77k. It's a project getting that into shape, like 300k in rehab. Permits. Inspections. Architects. The whole nine, city up your azz the whole time. But the sellout was 22k/month.Not much needed in rehab means mostly likely an MLS deal which means max price. Max price makes it hard for numbers to pencil.
The "how to" start is often very paralyzing and for good reason. There's gonna be tens of thousands if not 100k on the. hook. So you want to be sure when there is no guarantee, that's the paradox. One huge step in the "be sure" strategy is buying under market value. That's a giant leap in the "be sure" way.
- 1wBre NorrisBusiness MemberLender · Boston, MA · Member since 2026 · 9 posts · 2 votes
Hey Cameron, good question, and owner-occupying changes the math a lot, so I'd lean toward staying in Massachusetts for the first one.
A few things that have helped first-timers I've worked with:
Use the owner-occupied advantage. As a primary residence, a 2-4 unit can go FHA or conventional with a low down payment, and most lenders will count a share of the projected rent from the other units toward qualifying. That's hard to replicate out of state.
Look at a renovation loan instead of a pure BRRRR. An FHA 203(k) or a conventional renovation loan rolls the light rehab into the purchase, so you aren't burning cash on repairs and then hoping the refi appraisal catches up.
Plan the refi before you buy. Know your lender's seasoning rules (often 6-12 months) and get a realistic after-repair value from local comps, not the listing. In a lot of MA towns the bump from a light rehab is smaller than people expect.
Stress-test the rents. Run the numbers with a vacancy and the real tax bill. Budgets around $350-400K usually point you to Worcester County, Springfield, Lowell, or Fall River/New Bedford rather than Greater Boston.
Owner-occupancy rules matter. Most owner-occupied loans require you to live there about a year, so that's the earliest you'd move out and repeat.
Out-of-state can work later once you have a team and reserves, but for deal one, living in it and learning landlording up close is a big edge. Happy to talk through numbers on a specific property if it helps.
Apex Capital - Real Estate Agent · Boston, MA · Member since 2025 · 15 posts · 7 votes1w
Hey Cameron, this is the question every first-timer wrestles with. My take: stay in MA for deal one.
I'm an investor-first Realtor in the Boston area — I started with a single-family in Revere in 2020 and now hold 17 units across Worcester and Warren. Living in your first property is your biggest edge: low down payment, you're on site to manage, and you learn the landlord ropes up close. Out of state you lose all of that and need a team you don't have yet.
On the numbers: be honest about the all-in payment and ask if you could carry it through a 3–6 month vacancy. If $350–400k feels tight near Brockton, run deals in Worcester County or Fall River/New Bedford — that's where first-timer house hacks are still penciling.
And keep reserves after closing. The deal that works on paper but empties your savings is the risky one. Happy to talk through a specific property or your buy box — DMs are open.
- 1wDustin TuckerBusiness MemberLender · Savoy, TX · Member since 2020 · 195 posts · 80 votes
The biggest problem with investing in Massachusetts is that evicting a tenant will take you 6 to 12 weeks. Plus, making only $40,000 makes this very difficult.
You may want to consider looking into a job at the Buc-ee's gas station chain in Texas, Tennessee, and Florida. They start at $25 an hour, which would give you a 25% pay increase, plus 4 weeks of paid time off.
You may also want to consider moving to a state like Texas, where a standard eviction takes 30 days. That makes renting a lot less painful when you run across a bad tenant and have to kick them out.
- Lender · Member since 2026 · 33 posts · 19 votes1w
Cameron — the financing piece is actually what decides the MA vs. out-of-state question, so good that you're asking it now.
On $40K/year after tax, the math that matters: for a 3–4 unit with FHA, the lender runs a self-sufficiency test — 75% of the market rent from ALL the units (including yours) has to cover the full PITI payment. On a 2-unit that test doesn't apply, which is why a duplex is often the easier first house hack on a tighter income. Most pre-approvals never run this for you, so run it yourself before you fall in love with a 4-unit.
The vacancy fear is the real risk, and it points to loan structure, not just market: with a 203(k) renovation loan you roll light rehab into the same FHA loan instead of paying for rehab out of pocket while also covering the mortgage during vacant months. Less cash outlay = more reserves = you survive the vacant stretches.
One honest note on me: I'm licensed for primary-residence loans in Nevada only — for MA that would go through my manager, who's licensed in 49 states. But the math above is the same wherever you buy. And if you go the out-of-state pure-investor route instead (no house hack), that's a different loan entirely — DSCR qualifies off the property's rent with no personal income docs — and I do that in every state.
Happy to run the self-sufficiency test on a real listing if you find one — Dan
- 1wDivin KanyamaBusiness MemberAccountant · Seattle, WA · Member since 2025 · 423 posts · 170 votes
@Cameron Trieber I would not force a deal simply because a lender approved $350K–$400K. Preapproval reflects what may qualify on paper, not necessarily what will feel sustainable with a $40K take-home income, vacancies, repairs, utilities, and the added costs of a small multifamily.
Before choosing Massachusetts or out of state, work backward from a conservative monthly payment and reserve requirement. Underwrite rents below the optimistic estimate, include vacancy, maintenance, capital expenditures, and management—even if self-managing—and confirm the property still works if one unit is vacant for several months. Owner-occupied financing can be a valuable advantage, but only if enough cash remains after closing and rehab.
Out-of-state investing may offer lower prices, but it also adds management, travel, contractor, and market-selection risk—and it gives up the benefit of living in the property. A better first step may be to widen the local search area, consider a duplex instead of a larger property, strengthen income or reserves, and wait for a deal with a comfortable margin. The right first investment is not the maximum purchase price available; it is the property that can survive a vacancy without putting the owner under financial stress.
- 1wWale LawalBusiness MemberReal Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
My advice would be that you think twice about investing in an asset that costs $350K-$400K while earning $40K in salary, especially if the income from the other units is the key component of the deal. Instead of leaving the state, it would be better if you investigated the availability of some local 2-4 units that can fit the conservative rents and have enough cash buffer. You will have more opportunities to grow later but now it is not wise to be pressed by finances.
Good luck!
NETWORTH BUILDERS5236 Reviews - 5dJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
Cameron, welcome, and good for you for worrying about vacancy before buying instead of after.
Something I'd add to the stress tests above: your pre-approval is a ceiling, not a target. On a $40K take-home, I'd work backward to a price where your own share of the payment plus a six-month reserve is still comfortable if the other units sit empty for two months. That number is often well below $350K.
If prices make that impossible in your part of MA, comparing markets is reasonable. In my experience Columbus still has multifamily entry points around $200K, and uncontested evictions usually wrap in about 30 days, which matters when your cushion is thin. The catch is that an owner-occupied loan means you live there, so out of state tends to work best as a later step with a non-owner-occupied loan and a bigger down payment.
If you want a second set of eyes while you run numbers, feel free to connect.
Jimmy Lieu, Red 1 Realty4.9120 Reviews - 3dRemington LymanBusiness MemberReal Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
Quote from @Cameron Trieber:
I am a first time home buyer/real estate investor currently looking for a 2-4 unit property to do some light rehab, rent, and refinance and live in one of the units. I have spoken to multiple lenders, and they seem to pre approve me around 350-400k. I can put down more than 5% but this price range makes it VERY difficult to find any properties I can afford in my area even if I were to have a larger down payment. Also worth noting, I only make 40k annually after tax and that makes me worried that if I have vacancy for whatever reason (or after I buy the property I have trouble finding an initial tenant), I wont be able to afford my monthly payment. Is it worth it to try and find a deal in MA or should I just consider investing out of state? I need some advice, please let me know if anybody has thoughts on this!
I would recommend doing a house hack locally. Do out-of-state investing after you gain some experience.
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