All Forum Posts by: Tom Wagner

Congrats Rob! Missing Brandon, but looking forward to listening to the new dynamic duo.

Best of luck to you and David.

When you RBTR you are implicitly taking a more hands-on approach in order to juice cash flow and generate a larger return, so if the 4.5% cap rate you mention is the RBTR cap rate then the "true" cap rate is likely closer to 4%. As conventional interest rates push past 4% (or even 4.5% if you're planning to do a 3.5% FHA loan + 1% MIP), it will become clear when you run the numbers in detail that this strategy is risky.

However, I still think it is worth pursuing overall. I would just encourage you to aim a bit higher with your entry cap, perhaps 4.75%+ longterm and 5.25%+ when RBTR.

Good luck!

Is NJ considered out of state?? Lots of good opportunities across the river in Hudson County!!

IMO this is a deeply personal decision that only you and your family can decide. Some things I would consider:

- Weather

- Job prospects

- Housing market and cost of living

- Culture and diversity

- Whether the market supports real estate investing (ex: it's difficult in San Francisco or Seattle)

If you provide some more context on what you like/dislike I'm think it might be easier to hop in with an opinionated answer!

I often hear people saying "it's impossible to buy with an FHA loan in this market" and anecdotally, I really don't think that's true. Sure, you may not be able to complete against 20+ offers on a SFH or a duplex. But on a 3-4 unit the buyer pool is much less deep, and I think a competitive / well-positioned offer will have a good chance, particularly if the unit has been on the market for a few weeks (or more).

Anecdotally, a friend of mine is an agent in Jersey City, NJ (a very competitive market) and said that about 25% of their brokerage's volume is FHA-backed. So if it is working in Jersey City I see no reason why it can't work in Boston / MA.

Hi Reynaldo! There are regular meetups in Lowell run by a local firm called Candor Realty that you might enjoy. 

+1 on small multi over condos. The HOA will likely kill cash flow for condos, and with small multi you own the land!

Hi Helen! Lots of options on your plate. I would definitely argue that house hacking with an FHA loan is the best option, and while it may be difficult to make the numbers work in Boston proper, there are a lot of areas in the suburbs where the numbers pencil.

Tricky situation! I would consider reaching out to a lawyer who regularly presents in front of the Zoning Board, as they would have a good idea as to whether your variance will be approved. Usually zoning board minutes can be found online but in this instance it doesn't look like they are available electronically

https://www.fallriverma.org/zo...

Additionally, you could consider putting a condition in your offer that the rezoning needs to be approved before closing, but that would weigh down your offer and may dissuade the seller from considering it!

Hot take: The 1% rule is an antiquated rule of thumb that should be ignored by all investors. Every market is different, and what a "good deal" looks like varies significantly from market to market. In New York / San Francisco / Boston / etc, the 1% is unheard of and anyone searching for a property matching that hurdle is fighting a losing battle -- it is more like the 0.5% or 0.6% rule depending on the city.

Likewise, in some markets a good deal will be 1.5% or 1.6% and the 1% is also useless in this instance.

Underwrite 25+ deals in your market, determine what a "good deal" looks like in your market (in terms of cap rate or 0.X% rule), then go from there.