All Forum Posts by: Brian J Allen

@Tyler Daly the Streamlined should be pretty easy. make sure you work with a banker who does them and can explain it.. I would also encourage you to search out realtors who work multifamily in the market you are searching for. I work Worcester, MA and since I do a ton of business, I hear about 30% of the properties pre MLS. I am sure there are CT realtors who are similar in what they do.

@Tyler Daly check out this meetup in Putnam CT.  Tony Chabot is fantastic guy.   https://www.facebook.com/event...

and he is good to work with. I do Multifamily in Worcester, MA but refer buyers to Tony in the Quiet Corner of CT. Another word on FHA, look into streamlined 203K so if the property has a few flaws you can take care of them at the beginning. A lot of sellers and agents are afraid of the FHA inspection/appraisal so they won't take your offer.

Deric Allen, Make sure that your agent is actively a Multi Family real estate agent as it makes a difference. Take Worcester MA, Currently there are only 21 Multis for sale and that has stayed constant for 2022. But my buyers have been able to get under contract on 5 off market multi families so far this year since that is all that our group does. We have gotten to the point where sellers and agents don't want to put houses on the market at all. They are shopped for weeks, if not months before they hit the mls. Since most houses are only worth what they appraise for this makes sense. It is hard with tenants as well. So basically the houses are being shopped by the multifamily agents and once they get their price they sell. Essentially if a house will appraise for $400k, there is no sense in putting it on the MLS and getting and offer of $450k that is subject to appraisal, this gets your seller upset. Once again, make sure you are working with an agent who sells a lot of multifamily as it really makes a difference.

If you are doing business in Worcester, it is very important to deal with Worcester attorneys, they work much better together and don't take well to outsiders.  I did 40 deals last year and the only ones we had trouble with were from attorneys outside of Worcester county.

Flynn Law, Oxford

Kotseas-Lapointe, Worcester

Israel Fermin, Worcester

Barron Law Title and Closings, Worcester

all are very experienced

Worcester is a great market for younger people. It allows both solid rents and appreciation of your asset. Properties are scarce as there are only 21 multis on the market in Worcester Proper at the moment. A normal market would have around 50. That in mind, there are still deals off market if you work with a seasoned Multifamily Agent who does a lot of Off MLS deals. One of my clients is going to close on a nice 2 family on 1 Dayton Place, Right by WPI on Friday for $320k. But that is off MLS, there are very few of these deals that hit the MLS after they are shopped pre mls.

Holly,

I'm with Andrew Freed here on his #2, make sure that you do not rent to more than 3 unrelated individuals as it is against the city codes.  Also, keep in mind that the $750/month you are looking to get would have to include utilities.  Figure $150/month for electric year round maybe more and $150/month for heating, and $100/month for internet. That is another $400/month.  I would also figure $10-15k for that heating system in the next 5 years since it is quite old.  And also try to figure out timing here.  You really need to have the tenants on ready to go for June 1 NOW, as the good ones already have Clark places for next year.  If you have contractors you know, you should be okay, but if you are relying on people to come and do the work, make sure you double your timelines.  I have a client who tried to GC his own project and micro manage and he is over a year into a flip that was a no brainer and hasn't' had any work done in months.

This property probably has an ARV of $350k if it is done nicely with the new heat and up to date electrical, so make sure you buy it correctly!!!

I'm in Worcester everyday, let me know if there is any way I can help.  

Paul, Feel free to reach out if you are interested in Worcester.

@Paul Ireland you should be able to get over a 5 cap in great locations in worcester and maybe a 7 cap in lesser locations. The key to driving up the cap rate and making more $ is to improve the property or increase the rents. What is tough is that there are a lot of older Terrible places out there and lots of places with low rents. Key is to make sure you don’t get a place with both low rents and a bad property.

I'm with Andrew on the HELOC. This way you can borrow from yourself and pay yourself back and keep things simple and the properties separated. If you have the good cash flow you can use that to pay back the down payment from your HELOC.