All Forum Posts by: Colin Kelly-Rand

@Ben Moore

I am in the same boat in the Greater Boston area. Unfortunately (or fortunately) the prices in the Boston market do not yet reflect the higher interest rates. I have been looking recently in Providence and other markets (Framingham, Everett, Lynn) etc that I may find higher cap rate transactions and greater number of units (5+). 

I am predicting I will have 400-600k in equity after the 1031x. Ideally I can purchase a $2M property at a 7 cap. Also, not sure if you know 1031's well, I believe you can hold some of the 1031 funds in escrow for repairs that must be completed within 180 days of purchase. For example if you buy a property that needs work you can reserve some capital post purchase, spend on repairs increasing the value and then hopefully refinance afterwards. Easier said than done, however its nice to have options when their are so few pickings. 

Also, I am a commercial debt broker - so if you are curious what local banks are offering for commercial rates etc send me a DM. 

Cheers, 
Colin

Hi Kyle, 

Sump pumps can be helpful in basements that are likely to flood. A hole has to be dug, plumbing run (to relocate the displaced water) and the pump placed. 

They work best if your basement floor is not so dirty. The dirtiness matters as pumps can get clogged. 

And, definitely important if items are being stored in a basement - or heating systems such as boilers. 

Connor, You might want to consider Taunton or Providence where the rent to home price ratio (I.E yield) is a bit better. 

Boston itself is a bit harder to purchase in as the prices have not yet adjusted to the higher rates. 

OR just wait for a slight pricing correction.

My first triple-decker in Dorchester I house hacked, 3% down, and then rented out 2 apartments and lived in one with 2 roommates. Renting units covered the PITI. That would be your ideal scenario. Again, I think you can find this in Providence. Probably not Boston at the moment.

@Yuzi Stha Any reason you are not installing ductless mini splits? They are about 15k per unit to install and there is a 10k rebate per unit right now through MassSave. So really it should only be $5k to install after the rebate. 

Ductless Minisplits only require electricity. You can also get ducted minisplits if you have ducts already installed. 

Cheers, 
Colin

I use appfolio's rent collection system - a majority of my residents ACH rent. 

For the few old school payers who use money orders or checks, they mail to my earthclassmail.com po box. So I stay paperfree.

@Justin Hammerle The 5s a recent quote? 

I was in Eastern bank yesterday and they were offering 3 Months CDs at 3.5%, and 6 months CDs at 4%. Point being, even portfolio lending cost of capital is way up. I saw a 5.5% rate from a portfolio lender recently, probably still holds, but it had a bunch of other strings attached (they didn't just want the loan). 

@Jacob D. @Lien Vuong @Sean Kelly-Rand

I have closed a 6.125% on a RI 6 unit mixed-use last week - should be getting the same rate for the client for his next property in RI. I got 4 term sheets for him and one bank was particularly more aggressive. (Contacted about 40 banks).

Most local banks have a spread between 2% and 2.75% over the 5yr FHLB which is 4.54% today so I would expect rates between 6.54% and 7.29%. 

Part of the conversation is all lenders are predicting in 2-3 years you are refinancing - so negotiation is both on the rate today and structuring the deal (prepayments) so that its easier to refinance when rates fall.

Because lenders are predicting short term rates to rise more, its hard for them to decrease their spread, although they can. 

However, many bridge/construction loans are +1% over Prime - and prime is 7.75% , so rates for those products are around 8.75%. 

Three weeks ago RE SBL rates were down to around 5.5% for boston (top market) - but I think those are up to around 6% after the last fed increase.  

If either of you want me to find financing for you - I typically charge 50bps to 100bps at closing (on the loan amount).