All Forum Posts by: Ross Williams

I've used Bob Madden several times; has been on time and on budget; (781) 953-1673, [email protected].

Michael, I am a Boston area investor and returns superior to those you mentioned can still be had here. My concern is that at this late stage in the cycle (my opinion), smaller, peripheral markets like yours tend to be the first to decline. More importantly, your first deal is your most crucial deal of your career. A successful first deal will give the the confidence to do your next one and so on. This cannot be overstated. So make it a great, not good, one. I recommend you target minimum 10%+ cash-on-cash returns, 8+ cap rate and 1.3+ DCR to be safe. These metrics are getting harder and harder to achieve but they are out there if you dig. I would also recommend a property with below market rents as the simplest value-play to start, as in your example. @Kenneth LaVoie makes a great point using a very conservative 8% vacancy number; this leaves you room for evictions and turn-over which can kill a properties return metrics very quickly. As you get more experienced as a landlord you will be able to reduce this number towards ~5%, but I still model 8% even in my Section 8 properties which re-rent immediately. Best of luck!

Rare 9 unit cash cow located in Lynn, MA. New deck, many new windows and renovated units. Convenient location across the street from the supermarket and transportation. $105K NOI with low rents. ~20 cash-on-cash. $850K.

Brian,

You make great points as usual.  I currently have ~40 units in the Boston area and thankfully the market has been strong.  The reason I have not moved to so-called emerging markets as you mention is I don't feel comfortable with how the properties would be managed without my being there for oversight.  I had severe problems over-charging problems with my previous property manager here which has perhaps exacerbated my concern.  How did you get comfortable with finding trustworthy managers in your markets?   How often do you visit your properties?  Also, what cap rate and cash-on-cash returns do you target?  Thanks again.  You are a great and generous resource for BP which is what this site is all about IMO.  Ross Williams.

9-unit apartment building for sale in Lynn, MA. New deck, new water heaters, many new windows, vinyl siding, several newly renovated units. $71,700 NOI. ~20% cash-on-cash returns. $850,000.

Brian,

Great posts and thanks.  Are you concerned about where we are in the cycle, reflected by near record-low cap rates in many markets?  Equity Residential, who is the largest apartment landlord in the U.S. for example, bought no additional properties in the first quarter.  In the Boston area we are seeing a marked shift in the marginal small apartment building buyer to first-timers and owner-occupants away from seasoned investors.  This combined with rates starting to move up has many of us concerned.  Thanks for your thoughts.

His address is a UPS store in Colorado.  Enough said.