All Forum Posts by: Josh Robbins

@Lior Rozhansky From what i know of Quincy it's a great rental market although i haven't studied it.  But i agree, there is so much competition in the Boston area that the cheaper areas seem to get a lot of attention.  they're also areas where the retail buyers jack up the prices.  good luck with finding something, patience is a virtue.

@Wes Brand i really appreciate the advice. Those are great points and to be honest, i should be paying attention more to the ROI. Thanks. And just to follow up, new roof is not the only improvement i was planning on making to get the value up. The building needs some reviving and i recognize that "roof" is not going to get my appraised value to increase.

thanks for all the feedback!

@Wes Brand when did you live in Troy?  I'd say over the last few years it's been going through a small rejuvenation.  The largest farmers market in the area has been bringing many more people to Troy and has really built up the downtown.   1 bedrooms going for over $1000/mo now in the area.  With a focus on bringing nanotechnology to the Capital Region they're looking to turn around the decline of the population. When my 20-something sister-in-law told me she was looking to move to Troy a couple years ago, i knew there was something to it.  

My place is 5-6 blocks from Russel Sage and .5mi from RPI and Monument square.  With the location and the number of bedrooms i'm confident i can keep the 1500/mo and actually think I can get it up to 1700/mo with some relatively minor upgrades, which is more in line with where 3 Bedrooms rent at.  In May i'll be able to contest the tax assessment which could bring the taxes down significantly.  But yes, i'm sitting at around a 60% expense ratio which i don't love, if i can't bring that down.  Even at 60% i think it cash flows though.  

The banks I've spoken to all said they'd go on independent appraisers value after 6 months.  Prior to 6 months its on the purchase price.

sorry @Wes Brand, if I'm not being very clear. I am 100% looking for cash flow. And I think this will cash flow nicely. Rather than doing improvements up front I plan on taking some of that cash flow (hopefully not all) and putting it back into the building.  What I was getting at is that if it does not cash flow because of this, I'll feel ok about it since it's my first deal and I'll learn a ton from it. 

Thank @Lior Rozhansky, i'm actually assuming i'll be doing the roof pretty early on and building that number into the cash out refi and financing. However i agree, with these older homes you need to make sure the CAPEX is accounted for, especially the lower priced ones as it will wipe out cashflow. that being said, i fully expect in the first few years to have no cash flow on this as i reinvest it back into the building, increasing its values and its rent potential. That and since it's my first property, i'm looking to learn more than anything. Where have you been looking? Newton is about as expensive an area as you can get outside of the city.

yea @Eddie T., there are cities west of Boston within 2 hours in those price ranges, of course there's a reason they're that much cheaper. Plus I'm going out to this area 5-6 times a year anyways to visit family and I'm partnering with them to be my boots on the ground. Better than having to get myself out 2 hours to western MA every time I want to check something out. 

@Kevin Olson thanks so much. Happy to talk both Troy and local market. I'm a north shore guy myself and inside 495 we don't get anything remotely close to the prices in seeing. Maybe Lawerence is close but you'd really have to know that market. 

hey @Brian Andrews, appreciate the advice and yes, I have run it against many other duplexes and like the numbers for the area.  If this home inspection brings up anything major I will have no problem walking away. No falling in love here. 

@Eddie T., I live just outside Boston and in my town a duplex doesn't go for less than $400k and probably doesn't break $3600 total in rents, on the low end.  I've been priced out so I haven't spent too much time scoping it out. But from my perspective there's not many deals in these parts unless you want to speculate, which I don't. My wife's family is from the Albany region so I've been leveraging them for the out of state investing. 

Thanks @Mike Wood, appreciate the support.  Quite frankly, with this being my first deal, I'm just looking to learn. Hopefully the numbers work too. 

I've actually found a bank, who does entirely portfolio lending, that will cash out refi at 75%LTV with a rate increase of 1/8%. But they are an exception as all others I've talked too are 70%.

Thank you all for the responses.

@Mike Wood @George C. Harrell @Jay Dewberry this deal is in a B-/C+ area.  in my opinion, it's in between the c area and the A area but hasn't gotten enough of the spill over from the A area yet.  Tenants in this area are decent.  The rents are low right now because i would describe the building as "old".  It's a bit rundown but the bones are good (at least i believe they are, will know more after the home inspection).  These are not section 8.  i'm confident with some TLC i can get $100 more per unit in a couple years. 

my plan is to take no cash flow in the beginning to get the property up to a level that can get fair market rents, that includes replacing the roof, and doing some updates to the kitchens like replacing the appliances and some cabinet refacing, updating the common areas and potentially repointing the facade.

i've already spoken with a few banks that will do the cash-out refi in 6 months so i'm confident that i can get that done.  My strategy is long term buy and hold for the property however there is potential for solid appreciation as the city is going through a rejuvenation and is focused on revitalizing the city.  I anticipate this property being worth over $100k in 5 years but i'm not banking on it.

Hi All,

9 months ago i decided i wanted to invest in real estate and i'm finally taking action and got my first investment under contract (home inspection next week). I've run the numbers but would love to hear what people think. I actually plan on paying with this out of my HELOC from my primary, doing some cosmetic work to it, and then in 6 months refinancing at the appraised value. i believe an appraisal with under $2k of work should come in around $85k. Details below but let me know if you would like any other information.

Purchase Price: $60,000

2 Family, each unit 3/1 , 2024 sq ft.

Current Rents: $775 and $725 - both units occupied with one year leases

Location South Central Troy, NY

Taxes: $4,687  (sadly this is not a typo - property is assessed at $103,000 which i will contest, hopefully bringing this down)

Insurance: $800

Water/Sewer $918

Garbage/Recycling: $232

Other utilities are paid by tenants

I have no actuals for maintenance/repairs etc but the roof is old and will need to be replaced in the next 5 years.  Electrical was updated 2 years ago.  Building was built in 1910.

I appreciate any feedback

@Joel Barron unless you're going to be working on both units at the same time you might as well collect the money you can for the short time period. If he's been a good tenant for this long and he's choosing to move out on his own, your risk of having to evict him is probably low.