All Forum Posts by: Michael Morton

Hi !  I'm looking to connect with a couple of agents in my (very) local area.  Thought I'd reach out here as one avenue.  

I'm looking to purchase multiple buy+hold properties in 2016 I'm sure coming from various leads. Both SFH and small MFH (2-10 units). I plan on growing a mix of both for cash flow + appreciation.

Anyone have a good recommendation for an agent(s) in this area?  Ayer, Boxborough, Acton, Harvard, Littleton.

Thanks!

Mike

@Jim Mullane - I was just chatting with a friend today about Hudson! I'm just up the road in Harvard. I like Hudson a lot, I think it has good long term potential. Haven't found much there yet (just poking at MLS so far) worth pursuing but I'm sure there are opportunities.

@Russell Brazil -- Great call, thank you.  I had one do a walkthrough and need to make sure I "take care of him" because of this potential problem.  Thanks for the heads up.

My long-term goal is to own a portfolio of cash-generating rental properties.  As I start out, would you recommend purchasing MFH with <4 units (conventional lending possible) or jumping to >4 units (and commercial loans)?

I have funds to start either way (say, price under $1m) - but will need to get cash out (BRRR?) to continue to grow over time. My background is starting/running startup companies, so I'm not afraid of jumping in "big" and getting this going as a business.

Just interested to hear others experience.  If I want to eventually own many units, are there pros/cons starting out at a particular size MFH?

Thanks!

Ralph - I'm always looking for opportunities.  Especially on the 495 loop between Milford and Chelmsford.  Fix+Flip or rehab+hold MFH.  Let me know if something comes across your screen.

Hey @Aaron Stone -- welcome!

I just met a good contact in your area last night.  Dave from Real Property Management in Framingham.  I don't have his contact, but I'm sure you could call.  http://www.rpmmetroboston.com

He's obviously been in the business at least a while and located in Framingham.

Good luck!

@John D. - I would plan on doing that - and it'd cost quite a bit.  (but save a lot too).  Good return on investment for that, but obviously out-of-pocket at the start.  I don't know the numbers, but obviously would have to in order to proceed.

@Jack Chamberlain - Great comment, thank you.  You have read it pretty well.  Although I also recognize my enthusiasm and will NOT let that overtake me.  Neither will my (reasonable) wife.  Thank you for the reminder.

@JT Spangler - Great reminder of a reasonable future.  Having not been through it, having to rely on others experiences and definitely appreciate it.  Thanks.

I'm going to call the agent (local) and let him know my interest is only at a MUCH lower price if the seller is interested.  I'm not pushing or pursuing, will see if it plays out over the coming weeks.  No big deal - lots of other properties to look at.  

Thanks everyone.

Welcome!  As others stated, listening to the podcast and setting keyword alerts has really propelled my learning in the last 6 months.

I'm always interested in connecting with wholesalers in my area.  If you find anything west of Boston - give me a holler.  Mostly interested in multifamily or fix+flips.  

Keep in touch and good luck!  I look forward to hearing some successes.

I really appreciate all the comments.  I've learned a ton during this exchange.  Thank you everyone. 

Here's my latest review on this property, still running the numbers given the feedback above. 

• Price: $300k (about $80k less than asking).  $5k initial repair, $3k closing.
• Income: $5500 / month (5 units + 2 garages).  That is current rates, which are low by $100 / month / unit.
• Utilities (yearly): Water ($5k), Gas ($800), Elec ($3k), Oil ($6k), Snow/Lawn ($1800), Garbage ($600)
• Other Expenses (yearly): vacancy (6% / $4k), CapEx (5% / $3330), Insurance ($3k), Repairs (5% / $3330), Management (8% / $4k), Taxes ($5k)
• P&I: $18k -- 25% down / 20 year loan / 5.5% (just using numbers, have not looked at local financing yet)

Yields:

• Income: $66k (potential rent) - $4k (vacancy) = $62k
• NOI: $62k (Income) - $36k (expenses) = $26k
• Cash Flow: $26k - $18.5 = $7.5k.
• Cash on Cash ROI: $7.5k / $83k = 9%

Thoughts: 

• To me, this seems like a pretty conservative plan.  However since I'm new, and based on comments above, I'm reading this as "reality" and not conservative.  Great feedback from the community.
• I feel at this price, it's a really good opportunity because the rents are low and the utility expenses are high.  Therefore, there's great potential for upside.  
  • Raising rents by $100 / unit and putting oil/elec on tenants yields ROI 23%.

Thanks to everyone for their comments on this thread!

@John D. - I'll keep evaluating this property and come up with a target offer price and re-post soon.  Thanks for the encouragement.

@Ben Leybovich - Ha!  Yeah - I should crunch the numbers myself.  I will do that.  Mostly to confirm and also to continue to learn by doing some math myself.  Good call.

@Ross Williams - I really appreciate hearing about the local market, so thanks for that feedback.  I'll see if I can find a price to make an offer on this place that would fit better numbers.  Really nice to hear about what to shoot for in the Boston area, thanks.