All Forum Posts by: Matthew Brenner

I some areas of central and western MA you can find properties that seem to do better than the 50%/2% rules. Be careful and look at the age of the properties. Many houses are 100+ years old and would require exceptional reserves for CapEx and repairs. They can still cash flow, but those rules are very general and do not apply universally.

I have had repeated success with mortgage brokers in the past. You and I can shop one lender at a time, but a broker has a database full of potential lenders.

I have found that I can evaluate a lender within five minutes now. I let them know I am an investor, and I ask directly about their standard terms on the type of loan I am looking for. Most understand 100% when I say if it sounds like their products are not going to meet my needs. Frequently, they have volunteered to give me leads on other lenders who might be of more help! 

My wife and I are on the road to purchasing our first investment property (buy and hold). The plan has been for us to jointly purchase the property in our own names and then DBA as "Surname Properties" or similar.

How do you handle investing with your spouse? Do you form a formal partnership? Do you make a  sole proprietorship and do a joint venture for federal taxes? I know that structure in general is a question for a CPA or attorney, but this is a step that I feel many investors must have already gone through.

Thanks for responding!

Update: After some back and forth, the seller has accepted our offer of $60k, which places the property at ~22% RoI after updated expense numbers were crunched. Assuming this drops a little due to unforeseen circumstances, and also assuming we do not walk away dues to home inspection or building code contingencies, we should still have a solid RoI.

Thanks to everyone who chimed in. This thread was a big help on doing the math for our (hopefully) first property.

Greetings from beautiful Fitchburg! It always makes me happy to see people invest in our city. 

Thank you for you replies.

I adjusted my numbers and viewed the property. It was solid, with very little work beyond painting and some light handy work. We plan to make an offer, assuming I get good word back from the building inspector about exit locations of the building.

Our goal is to have the property have acceptable cash flow with property management, and great cash flow without management. That way, using management does not hurt us if we find it necessary.

Thanks again for your feedback.

Thanks for taking the time to read and comment!

We are looking into buying our first property, and we have $40k with which to begin our investing. My wife is very fiscally conservative, so she does not want to use up the full $40k and rely on our regular savings for reserves.

The property is a ~100 year old duplex in good condition in north central Massachusetts. It has newer windows and roof. It has a letter of lead abatement and is theoretically in overall good condition. The neighborhood is a C on an A-D scale - poor, but not especially crime ridden.

Asking cost: $69,000 (let's assume for now I cannot get them to budge on price)

Initial Investment: $17,475 (25%)

Rental income: $15,600 annual ($650 per month per unit)

Assumed Annual Costs: $12,076

• 10% vacancy - $1560
• $1900 Property Taxes (estimated increase from previous year's actual)
• $900 Insurance (this is really a guess)
• $1000 annual snow removal and "landscaping" (no yard)
• 5% repairs budget and 10% capex - $2808
• $720 water bill (estimated)
• $3188 mortgage (30 years @ 4.5%)

Cash Flow: $3,524

RoI: 20%

CAP Rate: 10%

Can you see any obvious errors in my planning? At what price would you purchase this property?

Thanks again for taking the time to read and review.

Thank you for the welcome, Michael and Lydia.

I am a dad and contract technical writer taking my family's first steps into REI.

After reviewing several options, my wife agrees that buy and hold real estate in our community looks to be the best investment we can make for our children's college fund. Our family goal is to be able to use our real estate investments to pay for at least of each of our children's college costs starting in 15 years. My personal goal is loftier than that, with visions of passive income and accrued wealth we can use to ease our lives and give our children an extra hand up when they start out as adults.

My general plan is to buy and hold within our city, rolling over all cash flow and refinancing when appropriate to increase our number of properties. Multi-families seem to give the best ROI in our city, but I am not adverse to single family properties, especially if we can BRRRR.

I would be happy to connect with local landlords and other professionals in the area.