All Forum Posts by: Clinton Grady

Thanks all.

Can anyone recommend any non-conventional lenders?  

There's a property that I'm interested in that I suspect is unlikely to qualify for a conventional mortgage - it's zoned SF, but it is a MF (5) and has commercial tenants, too.

@Philip Ganz Home prices are pricey.  But given my constraints, there's not much that I can do.  If I don't want to move my family after 18 months from now and if I want to use a house hacking strategy, then my opportunities to purchase real estate are limited to the next 18 months.  So, am I better off buying now and in 18 months or renting for the next 12 months and then buying one property?  Will home prices fall sufficiently in the next 18 months so that I am better offer renting than I am using it to purchase equity in a property? Also, if I wait 18 months, then I'll only be able to purchase one property.

Mortgage rates are likely to stay low or come down in the medium term and the effects of a recession will not affect property prices materially for years - not in the next 18 months.  Material downward property price changes will lag the economy, and the economy isn't even in recession yet, and it may not be for a year or two.

My constraints are very limiting unfortunately.

My background: I'm an owner occupier of a duplex which underwent moderate rehabbing of both units after we purchased it. I work in finance and live with my wife and pre-k children.

What's Happening: After living away from Massachusetts for about 20 years, I am moving back.

Goals:

• Accumulate more real estate which I can rent out, ideally closer to cash flowing is better (I realize this will be difficult in Massachusetts, especially some areas)
• Utilize the benefits being an owner occupier - low down payment and low rates
• Although I'll move to Mass. in a few months, in about 18 months, I'd like to land in a town with excellent schools and in a property that we will live in for the next 20 years; ie, not constantly move my family

Approaches:

• Approach 1: Purchase two properties in the next year
  • The first property would be one that we would live in for a year, then move out of and rent thereafter. Given the limitations I have around down payment money and debt servicing, it's likely that the first property would have to be a SFH or condo and will need to come somewhat close to cashflowing; We'll need at least 1500sf to live in - hence why I believe that I wouldnt be able to afford a MF - the price would be too high to afford a place that can fit us and another unit and then also purchase a subsequent property; I am not opposed to some moderate rehabbing, but any significant capital devoted to rehabbing would eat into either the downpayment for the next house, or, if part of a loan, add to the interest payments (affecting cash flows); The location wouldnt have to be ideal, as we would move out in a year (assuming I dont lose my job)
  • The second property we would purchase after living in the first property for ~12 months and then live in it for the next 20 years; It could be a MF, but could also be a SFH
• Approach 2: Purchase one property (- a 2, 3 or 4 family - ?) and live in it for the next 20 years; In this case, moderate rehabbing is more acceptable; Expansion possibilities would be great; Cash flows and down payments would be less of a limitation, the total purchase price could be higher; This could happen in the next few months or, if not then, any time in the next 18 months; But if not in the next few months, I'll need to rent a place in the meantime

Locations: I'm mostly looking west/northwest of Boston - around 95. For a property in which we'll live for the next 20 years, the school system matters a lot. In Massachusetts, Lexington, Winchester, Arlington, Belmont, Bedford, Lincoln, Concord, Lynnfield and Westford would all be fantastic, although even the lower end homes in that area are going to be a stretch for us to purchase. If we're to end up any of those, the property will likely be smaller and older (ie afforable). For a home that's temporary (ie live in one year before renting), the location is less critical, but the price (ie downpayment) and the ability to cash flow carry more weight. For a home that we live in temporarily (1 year before renting it), in addition to the above towns, the surrounding towns are also possibilities: Watertown, Burlington, Woburn, Reading, Wakefield, etc.

Ask:

Given that I haven't been in the area for my adult life, I'm seeking advice about the various locations and recommendations for people to work with who are familiar with the type of purchases I want to make. There aren't that many MFs which fall into my price range on MLS, so any off market deals would be welcome. As such, I'm looking for:

Let me know if there are any questions about the above and what additional information you'd need.

I look forward to hearing from you all!