All Forum Posts by: James E.

@Mike Hurney

$1,500 + utilities

2 bed / 1 ba

No dedicated parking but lots of free street parking outside

@Ray Hurteau

 Agree with everything in your post, going to start factoring in 1mo vacancy and start learning more about Dorchester. I've never spent much time in Southie, but know that it blew up fast and makes sense that Dorchester will be on the radar for rapid appreciation soon. 

@Bogdan Cirlig I like that approach - thanks for the tip!

@Ray HurteauThanks for all the feedback! 

Luckily enough repairs are minimal. Need to replace some dry wall / flooring in the bathroom, re-caulk the tub and install a glass door (to help prevent water damage), new toilet / vanity, and replace all the door knobs. Will be getting a proposal from a contractor tomorrow, but had a home inspection done and those were the ballpark numbers we went through with him.

To your other points, yes I will be holding as an LLC, so will factor in another $1k / year for LLC and insurance (my dad is an attorney so he will do the legal legwork, just need to pay the registration annually).

- No back HOA fees or restrictions on rentals.

Do you mostly focus in Dorchester? Have been looking into the area esp around Ashmont / Lower Mills / St. Marks.

@Bogdan Cirlig

 Yea I hear you there and should factor in a vacancy reserve... what's your typical analysis strategy? Do you change your reserve amount deal by deal or do you just say, over time, vacancy will eat up x% of profits?

@Rob Beland thanks for the feedback! For sure with the insurance- will also put in an LLC, so all in asset protection will likely run about 1k/year I'm estimating. Thanks!

What's up everyone - first time posting on DA forum...be gentle!

I'm set to close in early May on a condo in Salem, MA. This may not be a home run but hopefully it's at least an RBI double... what does everyone think? Am I missing anything here that I'm not considering?

ARV: $165,000 - $170,000 (unit above is mirror image and sold for $170 a few years ago)

Purchase price: $130,000 (REO)

Repair est: $5k (contractor coming in on Monday to give quote)

Anticipated rent $1,500 / mo (already have someone interested in the place and will likely move in as soon as renos are completed, so will not need to carry it more than a month) 

P&I at 4.375% and 25% down: $487

escrow: $200/mo

HOA: $75/mo

misc expenses: $100/mo

Netting the above gives me $638/mo cash flow, which is $7,658 annually and 23% return on cash. 

The area is solid - 5 minute walk from downtown / public transportation so expecting low vacancy risk. Will likely try to hold for 2-3 years while the value appreciates back up and save the cash flow, ideally taking the sales proceeds to scale up.

Are there any other investors here in the Salem, MA area? What has your experience been like?

Thanks for any feedback - it's greatly appreciated!

@Nicholas Stevens Just finished your episode of the BP podcast - great stuff. Looks like you live in Everett - is that where your triplex is? What are your thoughts on the casino plans?

@Adam Yellin I'm waiting for Jen to post something about how to buy investment properties with credit card points... 

Welcome to the BP party! I just started on the forums last week but it's pretty awesome. Lots of knowledgeable people here and everyone's really helpful. 

Hey @Colin Alsheimer - as someone who's been looking into the same strategy in the same area, I can tell you that it's going to be tough to find a 3/4 plex in the areas you mentioned in the 400-600k range. Have you started looking around yet at the areas / prices? 

You may be able to find something in Dorchester, Quincy, Everett, Eastie, Melrose, or further out in the burbs, but even duplexes in Boston proper / Charlestown / Cambridge are typically in the $800-$1m range if not higher.

Another option (and how I got started) is to buy a SFH / condo as your primary residence, but analyze it like you would an investment. See what your ROI would be IF you rented it ((rental income - mortgage payment - expenses) / invested cash). A lot of FHLM REO properties have stipulations that buyers must hold as a primary residence for at least one year, so if you take this approach you can likely get something ~30% or more below market value. If you can live there for 2 years while you fix it up and learn more about investing, and then either rent it out / sell / refi, it you should be in a good spot if you run the numbers correctly before purchasing.

I'm not a CPA, but my understanding is that you are exempt from capital gains tax from your primary residence if you're there for 2+ years, so it's a good way to start building up some capital without giving away much to Uncle Sam. You're also paying down your debt and taxing the tax write off on your interest payments during this time period - so much better option than renting. 

That's just one idea though - I'm sure there are other strategies out there you may want to consider as well. Good luck!