All Forum Posts by: Tom Wagner

At this meetup we will cover the basics of buy-and-hold real estate investing:
* Identifying properties
* Analyzing cash flow
* Estimating repair costs

The format will be a 20-30 minute structured presentation, followed by 20-30 minutes of open discussion -- bring your questions!

Monthly meetup to discuss real estate investing and house hacking in the Greater Boston metro area!

All topics welcome for open discussion -- bring your questions / ideas / strategies!

Great question, Nate -- and I think this is a question a lot of people in MA wrestle with. I don't think there is a one-size-fits-all answer and my advice would depend on a number of factors:

* Are you interested in self-managing or do you plan on hiring a property manager?

* How much do you plan on investing / have available for a down payment?

* Are you open to properties 1-2 hours from your house? (Worcester for example if you live in Boston)

* What are your goals financially?

* Are you deeply familiar with any out of state markets?

Depending on your answers to the above investing out of state vs in state could make sense, but I generally think investing in an area you know very well is the safest option. Each city, neighborhood and street is unique, and market knowledge is important in order to make sure you are investing in an area you will be comfortable holding for the long term.

Quick reminder about our meetup on Tuesday!

Really looking forward to seeing everyone next week!

When considering an improvement I would suggest evaluating it from a Return-on-Cost (ROC) perspective. If the improvement costs $50,000 and adds $500 to your monthly rental income, your annual incremental revenue will be $6,000 and the repair will be accretive. However, if the $50,000 improvement only adds $200 to the monthly rental income then I would consider whether the repair is truly necessary and reconsider my plan. Good luck!

I agree with others that a 3-7% cost of living adjustment is completely normal and expected by the tenants, particularly given the rental market is on fire. And on that note I would also do an analysis of what market rent is: go on Zillow / Rentometer and look at comps to determine what market rent is for your unit. If you're charging them $1,700 but market rent for a similar unit is now $2,000 (a 17% increase), then it is very likely your tenants would be receptive to a $100 (6%) increase because the alternative is moving + paying $2,000.

In this scenario you could probably get away with a 10% / $150 increase, but if you have good tenants I think your instinct to focus on retention is a good one.

Come chat about real estate investing and house hacking. This is an informal meetup focussed on house hacking, but many attendees are active real estate investors as well.

Schedule:
7pm: Beers and pizza
730pm: Greater Boston market update + presentation on FHA loans and FHA 203(k) loans

Location:
We are trying out Bone Up Brewing as a potential recurring venue. There is plenty of parking available and I hope the location is convenient for everyone.

To me the value hinges on the value of the rear lot. If you are able to sell individually or build a triplex in that area it has significant value, and if not I would pass on this property at ~any price. Having done a full-gut rehab of a fourplex previously I have virtually zero interest in doing that again without significant ($200k+) in day one equity upon stabilization.

Hi Edwin, may I ask why you are specifically limited to $400k? You will be able to use rental income to qualify for your mortgage, so you should be able to qualify for a bigger mortgage depending on the underlying property.

And to that point, let's take a quick look at two houses: H1 is $400k and rents for $3,000/m while H2 is $800k and rents for $6,000/m, the same 0.75% ratio as H1.

H1, year 1: Maybe $5k in cash flow, ~$6k principal paydown, $8k appreciation (at 2%/y). Total "return": ~$19k.

H2, year 1: Maybe $7k-8k in cash flow, ~$12k in principal paydown, $16k appreciation (also at 2%). Total "return": ~$35k.

Everyone's circumstances and risk tolerance are different, so there are definitely arguments to be made for the $400k house. But the median outcome/return on the $800k house over a 10+ year hold is much higher IMO.