All Forum Posts by: Christopher O'Brien

I’m in the same boat and have similar thoughts and concerns as Brett & Nick.

That’s helpful information Natalie. I have been looking at 3-4 bed SFHs but have not thought to look at new properties with tax abatements. 

@John Knisely I appreciate the quick reply and will keep an eye out for the details. Thanks!

Hi All,

I'm starting the process to try to find a house hack within ~40 minutes of the Fort Washington area. I'm looking for an investor-friendly real estate agent with experience selling/buying 2-4 units, that covers this area. I'm also starting the pre-approval process (was preapproved in 2019), so would also appreciate any local conventional lenders that are multi-unit / house hack friendly as well. I tried to do a forum search, but the results were a bit overwhelming.

Thanks!

Chris  

Just wanted to provide an update to this, as I thought it would be helpful for long-distance investors considering Scranton. I would consider myself a financeable person (strong credit score, appropriate income/capital) and found my results interesting & surprising.

After contacting nearly a dozen lenders, I found that most of the "local" small regional banks were either unwilling to provide financing to someone with a non-local address or did not have an investment property loan program at all (or at least one they were willing to talk to me about). This was even true for one local bank that I've been with since I was a child. 

On the flip side, the large regional banks ($100Bn+ assets) that happen to have a few branches in the area have been very supportive and provided inclinations that we should be able to make something work. It sounds like they have their conventional driven set of rules to follow, and as long as I (and the property) check all the boxes, they could care less where the property is. Hopefully this saves someone time in the future.

Thanks, Chris! My understanding is that for a residential non-owner occupied investment property, I'll need more of a conventional loan, so no fannie/freddie I'm thinking. Please correct me if i'm wrong though.

I'll shoot you a PM and I appreciate the others who already have!

Hi NEPA'ers. Do you have any recommended lenders in the area that you use for investment properties? I'd like to call / visit the local branches, but wanted to see if anyone had any recommendations before I started through a general list. Preferably looking for a conventional residential mortgage for a 3-4 unit property. Any advice or direction would be appreciated.

Thanks,

Chris

@Christian Nachtrieb , thanks for sharing that. Sounds like an interesting deal potentially once the rehab/refi is finished. Interested to hear how you're thinking through that. On its face though, if we assume ~40% expenses on that $2,100/month, and you put a 20% down payment ($966 mortgage payment at 5% int), that nets $294 a month (or ~8% cash-on-cash assuming modest closing costs).  A ~10% downpayment brings you to roughly break-even cash flow or ~2% cash-on-cash. Anything less than that appears negative. While this seems like an OK deal, I'd prefer a cheaper market where units rent for roughly the same as per bedroom here, but prices are comfortably under $200k and my downpayment can go further. I can't comment on your rehab/refi numbers, but this still sounds like an equity/appreciation play. If markets fall, your rehab/refi is out of luck, unfortunately.

Thanks, @Christian Nachtrieb and congrats on finding a value like that. What kind of down payment did you put on that and what rents are you thinking you'll get with the section 8? From what I can tell, it looks like that price, in that area would have maybe break-even cash flow at best. Curious to hear what you have running through your model though.

House hacking in Boston doesn't make a lot of sense to me. Because housing is so expensive, you'll likely go for the FHA loan, so you start with so little cushion. Sure - you can build further equity through loan paydown and appreciation, but you'll never find anything that cash flows this way. If it doesn't cash flow, then you are banking on appreciation, and if the markets tank next year (everyone keeps saying how hot it is right now), you lose your shirt. Why not put those same dollars somewhere else where you can afford the 20%-30% down and get higher cash flow and a more predictable return, in a more stable market.

Let's take a 3 bedroom somewhere in Dorchester. You'd be extremely lucky to find a 3 bedroom within walking distance to a T-stop for $300k. Rents are probably around ~$900. Run that through your model, and with all the taxes, PMI, high interest expense, the numbers don't come out pretty. Sure, you're out of pocket would be less than your rents before, but a quick turn in the market could change that net benefit through your equity pretty quickly. Lets not even get started on a place like Southie where the housing is twice as much, but rents are only $300 more??

Sure, maybe the market doesn't tank, and you don't care about cash flow, because by god Boston is so great and its nothing but upwards from here, but my preference is not to take that gamble and find higher and more predictable returns in other more accessible markets. Just my two cents though so feel free to rip through my thinking, because I've been trying to find a reason to look past the numbers (other than coming up with an ungodly conventional downpayment).