All Forum Posts by: Kevin Kelly

@Tom Wagner I'm in the process of switching over to EXP and building an investor-friendly team in the Boston area. I'll DM you with additional details.

Thank you all! @Lien Vuong @Danielle Jackson @Dmitriy Fomichenko

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $505,000
Cash invested: $75,750

This was my second house hack that is now a fully rented duplex near downtown Plymouth, MA.

What made you interested in investing in this type of deal?

I manage properties throughout the South Shore, including Plymouth, and see the rental demand, quality of tenants, and the gentrification in the area. Plymouth's still affordable for most new investors to get started. Rents are equivalent to that of Weymouth, Quincy, Braintree, but at half the price. Its also a big step up from lower quality areas like Taunton, Attleboro, etc. Plymouth is the only spot on the South Shore with a legitimate nightlife scene that continues to attract quality tenants

How did you find this deal and how did you negotiate it?

This deal was on the MLS. I wasn't the highest offer, but developed a good relationship with the listing agent and allowed the owner of the house to remain in the bottom unit at a reduced rent until her condo was built while I occupied the top unit for a couple of months. Most offers wanted her unit to be delivered vacant as her unit is much nicer.

How did you finance this deal?

Owner-occupied conventional financing with 15% down

How did you add value to the deal?

Minor updates, mostly cosmetic. Repainted, replaced old rugs with laminate flooring. Added a closet to one of the unit's rooms to make it a legal bedroom for the next time I get the property appraised.

Had the second unit tenant move out at closing so that I could owner-occupy. Now have the unit rented at market rent $450 above what it was previously rented for.

What was the outcome?

The property is now fully rented. the 1 bed 1 bath is now rented for $1,550, and the 3 bed 1 bath is rented for $2,300. After PITI, and accounting for CAPex, maintenance, utilities, property management, and lawncare/snow removal, the property is cashflowing $600-$800/month.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes! I represented myself as I'm a licensed real estate agent, and have a great team around me that I use for my personal house hacks and investment deals who I also recommend to all of my clients. Message me if you'd like me to connect you.

Hi Jeff,

8-12% is a safe bet depending on how intensive you want the management company's services to be. For example, some property management companies will charge a higher percentage if they're handling renovation projects, lawn care/snow removal management, evictions, etc.

You can get on the cheaper end, even as low as 6-7% if you just want the basics which include putting a tenant in place, leasing, maintenance services, annual reporting for taxes, etc. but will not cover renovation projects or lawn care/snow removal management. This requires you to be a little more involved in the property.

Also keep in mind that almost all property management companies will charge either 1/2 or 1 month's rent + initial leasing fees to get a tenant in place. This covers either the broker fee going to the agent putting the tenant in place or an in-house fee the management company has to place a tenant. Also, if your management company handles renovation projects, they will most likely charge a markup fee % or flat rate for managing the project. Just a couple things to keep in mind that investors often forget about when running their numbers.

I hope this helps! 

Plenty of opportunities in Attleboro for a house hack if you'd prefer to stay within your town. I'd consider Bridgewater/Easton/Foxborough if you're looking to stay within an hour of Attleboro. Its a little pricier but you can still cashflow nicely and have better quality tenants than Attleboro or Taunton (But as always, it all comes down to proper tenant screening). I house hacked a duplex in Bridgewater in 2020. Had the bottom unit rented and rented my additional bedroom to a friend so that I could live for free while I lived there. Now have both units rented, cashflowing, and a bunch of equity as an added bonus thanks to how the market's been over the past year.

Hi Andrew, I recently helped a buddy of mine and his friend get into their first house hack in Hyde park a few months ago. They utilized an FHA loan and bought a newly renovated duplex. So far its worked out great for them! Each side was a 3 bed 1.5 bath. They rented out the other side and their spare bedroom so that they're each paying out of pocket roughly $400 a month. They'll cashflow nicely after they move out and onto the next property, especially if they're able to refinance. With regards to the area, its a mixed bag. Some may disagree but I certainly think its in the path of progress as there are a lot of houses being renovated in the area. My advise would be, if you were to house hack there, to ensure you properly screen your tenants (This goes for anywhere you buy). There's enough quality tenants looking to live in the area that you shouldn't have an issue renting out your additional units/rooms.

Wish I could help with the slate roof but I haven't dealt with one yet so I'll defer to someone else to answer that for you.

Hope this helps!

I live and work in the Boston market and work with many landlords in the city and personally invest in the suburbs. What I've seen is that rents have dropped in the city (Especially luxury rentals) and have risen in the suburbs due to the following reasons:

- Colleges are still for the most part, remote, creating a large volumes of vacancies which has lead to landlords giving incentives to get their units rented (One or Two months free rent, broker fee paid by landlord, etc.)

- As a result of this, a lot of my clients who are coming up on their lease renewal period are negotiating lower rents with their current landlords. The tenants are seeing nicer units rented at lower prices than their own. The leverage is now favoring the tenants vs. a year ago when landlords had all the power.

- A surge of people are leaving the city due to covid and employment options to work from home. People are selling their condos left and right and moving to the suburbs for more space. It is not uncommon right now for a suburb listing to receive 20+ offer on a listing priced right in the market.

- This surge into the suburbs has resulted in rent prices increasing 10-20% in some areas. My duplex 30 minutes outside of Boston went from a total rent of $3600 a month to $4,100, with 20+ solid qualified applicants in a week.

I'm sure this is very similar to a lot of the major cities around the US, but as people mentioned earlier in this thread, it depends on your market and what the key drivers in the area are.

Hi Kyle,

I'm 26 and bought my first house hack last year on the South Shore and was in a very similar situation with regards to income and cash saved up. You mentioned you'd like to cashflow positive in your house hack. For that to be possible in the Boston area you'd most likely need to find a value add opportunity (Ex: Buy a duplex that has basement space to convert to a 3 family), then get creative with the financing for the rehab. Another route you could take is to look for a multifamily that needs a little work and utilize the FHA 203k loan which allows you to wrap the rehab costs into the loan (Although there are a few extra hoops to jump through taking that route). Both options will add sweat equity and allow you to potentially refinance, reduce your monthly payment, and then actually live for free or cashflow positive. I've helped a few clients with this and its been awesome to see the results!

If you go outside the city such as Lowell or Worcester, it is definitely easier to cashflow with a basic 5/10% down payment on a 2-4 unit property. 

My duplex is in Bridgewater that I purchased for 460k and have a monthly payment of $2700. My bottom unit is rented out for $2100 per month and my spare bedroom in my unit is rented out at $650 allowing me to live for free and cashflow positive $50 per month. Some sweat equity to the property and the property's increase in value in the past 6+ months has allowed me to refinance from an FHA to a conventional loan and a new monthly payment of just under $2500 per month.

This has allowed me to save a significant amount of my income while living for free over the past year which has put me in a position to look for my next house hack in 2021 and repeat the process.

That is the power of House Hacking!!!

Shoot me a DM if you'd like to discuss further or have any questions as you begin the process.

Hi @John Joyce and @Erik Kraemer,

Have you considered house hacking? Or are you looking for a 2-4 unit to be used as a rental? I grew up in Hanson, MA and am currently house hacking a duplex in Bridgewater which has been working out great! Planning on purchasing another in a few months and renting my current property out completely. I know the South Shore market well and am helping a lot of friends/clients get started in RE investing. I have a good team in place on the South Shore to manage my rentals that I'd be happy to share as well. Shoot me a DM if you'd like to connect. Happy to help!

@Eamon M. Keane Let's connect! I have clients that may be interested in deals you have in the Boston area and/or South Shore.

Hi BP!

I'm the Sales Manager/Lead Sales Agent of 20+ agents for my brokerage in Boston, MA. Our brokerage is well known for rentals in the city but are trying to make a push to have a larger presence in sales and want to give our agents more tools to pick up seller/buyer's clients in 2021. I'm curious as to what direct mail services members of the BP community use to pick up seller/buyer leads, investment opportunities, etc.? Are there any that have worked great for you? (Or haven't worked?). I know there are many variables at play when it comes to direct mail marketing. Any suggestions would be much appreciated!