All Forum Posts by: Dan Smith

@Andrew Beaver

We decided on Bradford because we would be living in one of the units, my fiancee has particular tastes, so when researching areas, I needed the town/city to have a good number of multi's, an atmosphere I would want to participate in, and a good cost of house vs potential rent ratio.

The other factor to consider, was that the city had to be between my job and my fiancee's.  I work in Lawrence, MA, she is in Portsmouth, NH.  After considering all of these details, we decided that Haverhill was the most appropriate in terms of location as well as cost/potential rent. 

After looking at a few potential houses, we realized that the Bradford area of Haverhill seemed much nicer and had a better atmosphere that we would want to live in, so we honed in on that area of the city specifically.  The good thing about Bradford is that it still has a healthy amount of multi fam's, as well as demanding a bit of a rental premium, and I feel that I would be able to focus almost exclusively in Bradford for purchases for a very long time.

Let me know if there's something you'd want me to elaborate further on with regards to picking an area.

As far as Worcester area, I used to live there when I first graduated college, 3-4 years ago.  Worcester is a city that I would also be confident in with investing opportunity but obviously doesn't suit our location needs for the time being.  I see that you aren't located in Worcester, so you would definitely want to take your time in picking the right neighborhood/street, as the quality from street to street can vary drastically!!  The Webster Square area is something that I would recommend taking a look at :)

I can second the use of SmartMove.  I haven't been in the game long enough to see a bad tenant through them, but I have heard good things, and use, SmartMove myself.

@Matthew A.

I can appreciate the help with this.  I will be the first to admit that I am incredibly new and there will certainly be expenses that I am not factoring in here.  That being said:

I used the term cashflow to represent the amount of money I'm taking in vs going out in the month.  i.e. - if I pay out 2500 in a month but pull in 4000 that same month, is it ok to call that 1500 cashflow?  I would expect to have months vary with cashflow in regards to expenses and the like, but they will always be different each month, depending on what happens. Is there another term for this? I would use the term Profit/Loss to talk about the total difference at the end of the year...

Certainly your points with percentages pertaining to repairs, vacancy, and capex all hold water.  Though I do like to think I went through the effort to find a location that is desirable, (to provide myself with a lower vacancy rate), as well as taking the management piece myself (yay $400!).

So far my life has changed for the better since purchasing this property, and whilst I may not be at positive "cashflow", I can certainly boast about, the feeling at least, of living for free! And that's a good enough start for me!

@Chris R.

I myself struggled when raising rents on the tenants I had.  The original move had the tenants going from 850/mo to 1200/mo.  I thought this was fair, as the same unit would rent for 1500/mo if it was vacant.  Those very tenants took the raise as an insult and used lots of words to describe me that weren't very nice. I realized that even if you think you're being fair; when it comes to money, not everyone see's it that way.  These tenants had been paying 850/mo for 10 years!  Never once seeing an increase.  Long story short, after a few months of dealing with other issues from these tenants, I am free of them, and have a new policy in place that when I buy a property with tenants in place, paying under market, I'd feel better off just kicking them out and finding new one's I picked myself.

Luckily my area is sought after and if I want new tenants quickly, I can get them.  That isn't to be said everywhere, but there's always someone else:)  I tracked craigslist/trulia/zillow/etc. for a few months, and still do, to see what apartments actually got moved into, versus what is still on the market for asking rents today.

I bought a 3-fam with my fiancee in December 2015.  We live in Bradford, MA - this is considered a nicer part of Haverhill, so we can demand higher rents.  When I bought the house, there were tenants paying 850 on the first floor, 900 on the third floor, and the second floor was empty.  When I told everyone that I would be able to get more in rent, no one believed me and said I was making a horrible mistake.

Flash forward to now, we kicked the first floor out, renovated that and turned it into our unit. I now get 1,400/mo for my second floor (No renovations other than fresh paint on the wall) and 1,200/mo for the third floor (no renovations at all). Our purchase price was 373k and all in, our cost is 2,505/month, we went FHA, so a little over 300 of that is PMI. I have a calculator that I created to know when I'm at 20% equity so we can refi and change all that!

When we factor in our own monthly bills, we come out just about even each month, but I'm sure when I move out I can get 1,500-1,600/mo in positive cashflow.  You can definitely do it, you just need to make sure you're doing all the math and research appropriately.  

Let me know if you'd like to discuss anything further, I'm happy to provide thought processes:)

@Jose Castillo - Wholesaling doesn't require any sort of licensing in any states that I know of.

You should check out this post about it to learn some more:

Wholesaling Real Estate Basics

welcome! Im in the haverhill area. Always good to see more in MA on here!  I bought my first 3-fam in December.  Feel free to reach out with any questions:)

Welcome Pam!  I'm in Haverhill, so we're neighbors!  Be sure to check out the forum, there's always something to learn here:)

@Christopher DeFronzo - Welcome!  I just recently purchased my first 3 fam in December 2015.  It's an exciting ride and I look forward to hearing more about your deals to come!

@Bernard Chouinard - As far as keyword alerts go, I  have "Massachusetts" and "Haverhill".  I own a property in Haverhill, MA currently, so I keep it easy on myself.  But if you're trying to learn about specifically three families, it might be worth it to use a keyword alert like "3-fam" or "Multi-unit".  

You will then get an email sent to you every time one of those words is mentioned on the forum.  It helps to keep your time focused on the parts of the forum that you're interested in.

Hope that helps!

@Bernard Chouinard welcome!! There's always new things to learn daily on this site.  Be sure to take advantage of the keyword alerts you can set up on the forums:)