All Forum Posts by: Seth Williams

@Lien Vuong you nailed it. Appreciation in fall river, all though from a percentage may be super high, dollar wise it isnt. I have property just outside of boston that has doubled in value almost in 3-4 years, and its worth a lot more of doubling in fall river. And yes the cap rate calc was off. 

Lastly, 3 million for a property in mansfield seems very high. Often, brokers / owners might try and use the cap rate value on a future pro forma of rents, it happens to often, and its important to not pay tomorrows price for a property today. If that is the case, then yes a bank wont cover it because the rent is insufficient, its more of an over priced property IMO. I recently ran into a deal that I wanted to buy but the rent roll wouldn't cover, its just a simple pass in my analysis at that point unless I can buy it at a price that works. I do love the uprising in Fall river tho, one of my agents is buying property down there. 

@Mahdi where are you living vs. looking? As a broker in the Boston area, im not familiar with properties that if purchased would "lose money" there is certainly some that require more money down than others in terms of quantity, but with commercial financing ( over 5 units ) a bank needs the Debt Service to be covered by revenue, or DSCR ( Debt service coverage ratio ) and usually its 1.2% here in Boston. Meaning, if the place has a debt service of 10k a month, it needs at least 12k in rent to be able to even go to the bank to get financing. Now, that being said, If I was just sitting on 10 mil, I could buy a building to your example and make a huge cash return every month, but its all in how you lay out the deal / whats important to you. The cap rate in Boston on average is like 4-6%, so, they still make money. There are also still deals to be had out in this market. Lastly, often brokers are over pricing based on the shortage of housing and potential for redevelopment too.

Just my $.02

Go talk to a local bank, anything over 5 units will finance itself with its debt service coverage ratio and P&L, meaning, its way less dependent on you personally, and as long as its a good investment and you have the liquidity ( or the capability to access it thru your paid off home ) for down payment they will take it. They do take a peek at your personal finances, bank depending, to make sure you can handle it. You should be fine, get your ducks in a row & make a play at the place pending financing. Good luck. PS, why does it take 4-6 mo to reno a mobile home? 

@Victoria Coleman depending on how it is set up yes. I think @Roy N. makes valid points too. Multiple ways to skin a cat. If you are always in peril about what will / might happen, you’ll never buy. Dive in, you’ll live :) 

I would imagine the total cost of build out and sell out will be hefty, maybe try and just get a point or so from the investors, or raise the rate and get a kick back if it’s all legal. Lastly, get involved in the sell out, some big money in the back end there, maybe connect the agent and take a referral fee off each deal etc. could truly be some nice passive cash. Once you’ve inked something stay out of it tho and let everyone else do the work. 

Just make sure you do your due diligence, and set your prices high to make sure you can accommodate an expensive winter with snow removal and potential repairs. Additionally, probably worth raising rents higher and including heat, and getting WiFi in the building and installing WiFi thermostats to verify remotely temp is high, ive found this stops frozen pipes from happening. Lastly, emergency / cold weather manual or notice goes to all tenants on what to do , when snow removal is coming, keep temp extra high to prevent freezing pipes. 

Good luck, 

Really vague post, can you provide more details? Rents, area, expenses, purchase price etc. 

Not sure about the area, but certainly a practice. However, pay close attention to tenant quality, often Ive found lower quality tenants might not pay this bill, and the last thing you want to get into is water shut offs / back debts, and dealing with that. Im in one of the most expensive water communities in Massachusetts and I still have not sub-metered for this reason. I pop coin opp in the building and it makes up the revenue. Just my two cents. Lastly, my local plumber said he could do it, so Id check with peeps locally before trying to do some other company, its not like its 100 units. 

Hey Matt; I’m also from boston and recently structured a similar deal, ultimately it depends on what each party really wants out of the investment, I can send you the deal I brokered if you’d like hit me up direct and we can chat or meet for coffee 

If you look for type of building, then yes, IE 4-8 unit, 5-9+ , at least thats how they are coded on public record in my area. Since im an agent I have access to more systems, but again, its pubic record. So if you can search for those style of buildings you are looking for, you can look up owners, and their contact info. Additionally, if that doesnt work, a search filter for high bathroom count will usually result in apartment buildings too. IE, more then 10, you are either pulling buildings or mansions lol. GL. 

-Seth