All Forum Posts by: Francisco Feliz

You guys have all been so gracious to take this time to offer your input. I've read this all, but I'm just now able to respond. Let me take this in pieces.

First things first, you guys have all convinced me that this one actually requires more work than I'm comfortable being responsible for on my first personal property. In fact, I've even changed my strategy, especially due to my 6-month timeline (personal reasons), from focusing solely on multi's and major cash flow to really just looking for anything where I'll at least break even, even just regular apartments. Of course, many of you would already know this excludes condos bc the monthly HOA fees are insane -- I was looking at them on redfin. But would it include single families? Are there areas within Boston limits (incl. Brookline, Cambridge, Somerville, Roslindale) where single-families are rented? That's probably the only thing I'm figuring out right now.

On to your posts...

@Jeffrey H., thanks so much for giving me a framework to think about the investment. "If it costs 100K to renovate but will only get 2K more per year bottom line I would leave it as-is." I'm going to use this on the next properties I look at.

@Sergio V., thanks for the knowledge on what makes a property illegal. When you say "illegal," do you mean he can be fined by the city or anything like that? I'm pretty sure not all units have 2 means of egress, most do because they also have an exit onto the back deck. And the utilities are not metered separately - in fact, there is only one electrical panel that somehow works for the whole building. There are 3 meters, though, which is really strange. So, overall, you're right on not buying into a liability and not forcing a deal. Would you still be a fan of getting the building vacant even despite the difficulty of finding renters during winter? (This is just what I hear; I don't have personal experience with it)

@Bill Thompson, thank you for putting into perspective how much work this would need. Clearly, I'm not willing and able to get into all that on my first personal property. Don't have $100k+, and I'm not sure I want to have to evict anyone on my first go-around haha. Honestly, I was okay with the rent including the utilities because I ran the numbers that way and there was still good cash flow, but one panel for a whole building is scary or ... a "liability," like Sergio said. Of course, the landlord paying utilities is not ideal but it didn't seem like an urgent fix just from the listing. Also, good to know about condo conversion, still learning where the prime areas are, especially in Dorchester. Finally, when you suggest your offer price and say "need to be realistic, this is Boston," what do you mean -- that the offer price can't go too low because Boston still is expensive?

@Reed Sasamura, thanks for the reminder to look at what the competition is doing.

This was all very helpful, gentlemen! Thanks a lot, as I'll be using this as I approach what I end up buying. All the best.

New Update here --

My sister finally went back from break today, and she found the apartment in a total mess. Dirt all over the bathroom floor and the shower floor, her things thrown about and displaced, he dirtied up her handrags and her shower mat. Like, I actually don't get this guy's problem. 

Are there any suggestions folks have at this point? Of course, she took the pictures, but that doesn't prove that the landlord did it, even though he broke into her place, and my sister cleaned the place before she left for break just to come back to this dirty place. @Paul Santos, there is mention in the tenant guide of "public spaces" needing to be kept "sanitary," but I'm not sure what qualifies as a public space. For now, what I recommended she do is to call the consumer hotline at the Attorney General's office. I'm not even sure what I would do. It's crazy if we can go unchecked like this as landlords; with power, should come responsibility, as that's what the political fabric of this country depends on!

Not to get too political ...

Hi @Sergio V., this is in Dorchester, east of Dorchester Ave. All the tenants right now are of Asian descent, and it's in an up-and-coming pocket of the area. Not sure if this makes you want to add anything new. Are separate leases always illegal because I know of many roommate situations, even in B to A areas, where a landlord has several young professionals (2-4) each with their own lease due to the propensity of this age group to move around often.

For the broader BP, Dorchester is an overall area in transition, still has some very rough spots. I would consider the lot of Dorchester, in BP-speak, a C area with a couple D areas and even fewer really nice areas. I would consider where this property is higher on the spectrum of C's to B-.

So, I'm coming to BP for advice on how to approach a property like this or IF to even approach it. Hopefully, some landlords also chime in.

I was looking at a multifamily in Boston the other day that was massive - 4800 sqft. The 2 most interesting things about this are the layout and the tenant situation, so any help here would be great. On layout, it's listed as a triplex because of the 3 levels, but the current owner has the 1st floor with 3 separate tenants. One of the "apartments" is off to itself with its own door, and the other 2 apartments actually looped and connected, but because the apartment is so long (4800 sqft makes the building stretch very long all the way back), the owner installed a door that blocks entrance from one unit to the other. Here's the kicker: only one of those 2 units has the kitchen, and there is no kitchen in the unit on the 1st floor that is off on its own. Second floor is same long setup, but it's vacant because that was for the owner. The 3rd floor is really crappy with a kitchenette, a sink that is off in a little inlet/cove type space that barely gives you space and the curvature of the roof slants right above you. As for the tenant situation, there are no leases, most pay by check but some pay cash, and the owner says that he hasn't had problems with any of them. Oh, and I'm pretty sure I saw a real scoped high-capacity gun just hanging out in the room of the 3rd floor unit...

So questions for you guys:
1) What would you do with this layout? I'm happy to occupy one and have roommates or something.
2) Would you keep these tenants? What would you change? Is there that big a market for people that would live in an "apartment" without a kitchen? (Let's not forget it's winter season in Boston right now.)

Thanks, in advance, to all who took out the time! :)

Hi @Charlie MacPherson, thanks for sharing this. Where did you find this data?

Hi everyone,

Is anyone familiar with the self-sufficiency test on FHAs with respect to buying a multi-family? I was told that it's a recent-ish provision that has made several FHA loans fall through. Apparently, 75% of "market rents" for the property needs to be greater than the PITI + PMI. Does anyone know what market rents FHA appraisers use and if we have any influence in showing them data for appropriate market rents? Also, is it true that they only count the bedrooms and the not the bathrooms for the rents? May have just misheard, since that sounds entirely unfair to me.

Unfortunately, I don't know the answer to that question.

@Neil G., you hit it on the head. The landlord did not retain a key and had to break in. There is also no mention on the lease of my sister having to maintain a certain temperature or keeping the heat on. We're from New York City (NYC), which means we live in apartment buildings where we don't control the heating, @Colleen F. And we will look through that guide, @Paul Santos Thanks for the suggestion.

If anyone has any other suggestions on how to get the landlord to fix either door at this point, I would love to hear it. All 3 of you here are very gracious to take some time sharing your thoughts. Thanks.

@Ryan Rogers, another great strategy comes to mind from a BP blog post I read. Buy 3 income properties, rent them out for a few years, do any work necessary, and then sell 2 to fully pay off the 3rd. Then, you would own the 3rd one free and clear and could pull in the type of monthly income that @Reed Sasamura is talking about.

Here's the post from Chad Carson (who's also on podcast #84): https://www.biggerpockets.com/blogs/4712/39107-the...

Hey BP,

So, my sister seems to have encountered one of those landlords that @Joshua Dorkin always talks about giving everyone else in this business bad names. She is a college student in Alfred, NY (upstate) and her off-campus housing landlord is apparently always extremely rude to her, hanging up on her, and never helpful. Up until now, I've just described personality defects about which nothing legal can likely be done; however, while she was home in NYC for break (where we are from), her landlord told her that he literally broke open into her bedroom because she forgot to leave the heat on and the pipes could freeze. He said that he has no obligation to fix her door and that he's going to leave it like that because she should have known better. Setting aside the fact that she's from the city and a young college student and so doesn't know about pipes freezing, can he really get away with breaking down her door? The issue here, in particular, is that the building side entrance door is very fragile and easy to shoulder through into the dwelling at which point her now unlocked/broken bedroom can allow for anyone to steal her stuff. She had originally requested that the landlord install that lock on her bedroom door (there wasn't one before) precisely bc of the fragility of that property entrance, and now he broke the bedroom door down. 

In Massachusetts, where I am, there's a court ruling that says that landlords must keep "all means of egress at all times in a safe, operable condition." Is there such a thing that she can look for? Does it apply here? Is there anything she can do like call the city or is the landlord really in the right here? The best part is that he's also apparently an attorney and the cops know him...