All Forum Posts by: Bob D.

I'm in Boston and I'm considering purchasing a SFR in Vero Beach, FL. My parents are down there. I'm halfway through this book and I'll start putting emails out to agents after the new year.

Great book. 

This is a great thread. I'm in the process of searching for my first BRRR in the south shore. I've lived and looked all over the Boston area in the last ten years and have passively invested in a few triple decker condo conversion in Dorchester. I cannot believe how much condos cost in certain neighborhoods now.

My strategy is to find suburban areas close to commuter rails. If there is a walking distance to decent bars and restaurants, all the better. My gut tells me that more young white collar professionals will look to rent outside the city as the rental market continues to to soar, even in places like Dorchester.

One place I've been all over recently is Weymouth/Braintree landing. There has been a big investment, it's a cool little neighborhood. There is a new huge mixed used residential complex that will make the neighborhood more vibrant, and while cranes in the air can hurt existing rentals, the price to rent at the new building is really high ($2,400 for a 2BR). I'm currently going back and forth with a seller to lock up multi with two-two units that, with a little elbow grease, could rent for $1,800 each. 

In short, anything close to a commuter rail can be rented. If there is some coffee shops, restaurants, etc...it can be good. Low property value, decent rents, some appreciation upside. 

@Brent Coombs I'm not planning on living there. I've run my calculations assuming three months to get the property rentable, and at that point we begin collecting $3,200 renting out both two bedroom units. Based on the BRRRR calculator on bigger pockets, the numbers work, unless the construction projects takes too long or goes way over budget.

I think a realistic expectation is that in one year we have the place rented with only $25k of our own money left into it, a value of $400+ with 25% equity, and cash flowing at least a few hundred per month. 

I found a two family property on Homepath--it's currently in the lockup period but asking price is $325k and it needs some work (TBD on $$). Similar two families are worth over $400k ARV. If rentable, it would gross about $3,200/mo. Here's my plan. If I can get it for $325k with 25% down (call it $85k) and put another $35k into it, I can the rent it for $3,200 and earn a decent cash flow with a total of $120k into it.

At that point I can refinance at a $415k value for a loan of about $312k--pulling $60k about $60k out after fees, and still cash flowing. 

My numbers are conservative but here are the areas where I'm unsure about. 

How do I finance this? Should I use a hard money lender for purchase and rehab, or just use conventional loans for purchase, my own cash for rehab, and conventional loan for the refinance? 

Everyone, thanks so much for the insight. BP never disappoints. 

Total newbie question here but I'm searching for 5+ unit multi families and commercial loans only have 5, 7 or 10 year terms. I understand that refi is part of the process, but this seems to force a refi that could conceivable come during downturn and ruin a strategy.

What am I missing here? How can you buy for long term cash flow when you're forced to change lending terms every 5 - 10 years? 

My friend has found a deal on a two family in his town in Hull, MA and has it locked up at great price, probably $20k under FMV. He currently lives in a single family with his wife in the same town, but they are planning to rent the single family and house hack the two-family.

He was planning to use the FHA loan for the two family, but he can't have two properties within 100 miles if he is using rental income of one to support the second loan.

Would it work if he didn't include the rental income of his single family and had a cosigner with better income to help qualify for the loan on the two family? 

I went to an open house in a very posh coastal down south of Boston because the home was listed at a very competitive rate. Turns out the seller (an older woman with an accepted offer elsewhere) is VERY motivated but also has the two adjoining lots and is eager to unload those as well.

I'm pretty sure I could lock up one of these other buildable lots for under $200k. I have a builder that quotes about $160 sq/ft new construction--so If I built a 2500 sq/ft home that's around $400k. All in I would be $600k, but say $650k to be safe. 

2500 sq/ft homes in this town go for $750 - $1mm+ depending on location. Seems like there's some room to run here.

Here's my question--I can probably swing the land purchase but have no funds to do construction, nor am I experienced enough to oversee something like this. Would people suggest that I just lock up the land, get it planned and permitted, and sell to a builder or other investor for a quick buck? 

What's the best way to proceed? 

Tom,

We haven't done anything. I've been on my own journey of self-employment for a few months. Need to get myself up and running and revisit these REI dreams.

The down payment question was something I had considered but thought I would address down the road. It seems like there are ways to handle it.