All Forum Posts by: Tyler Munroe

 From what I'm seeing most listing agents are still paying buyer agent fees, so likely would be free to use an agent as a buyer. If they aren't you'd be responsible for paying the 1-3% that an agent would charge, however you can negotiate that fee now. Either way, an investor friendly agent that knows the market will be extremely beneficial given that you're coming from out of state and may not be familiar with the area.

Hi Eder,

Typically the closer you live towards Boston, the less you'll offset your mortgage when house hacking. For instance, if you bought in Medford/Somerville/Cambridge you may still be still be paying quite a bit out of pocket for your mortgage, but if you pushed out further to Lowell/Haverhill/Lawrence, the income from the other unit(s) may cover your full mortgage.

Either way, it's a great wealth builder and I highly recommend it to all my clients if they can do it. Feel free to connect if you'd like to chat more about it.

Hi Linda! If you're looking for those returns in the greater Boston area you will definitely have to push out a bit - think Lowell or even Manchester, NH. Anywhere closer the CoC is looking like max 5% for on market deals, if they even cash flow at all these days. I feel a better metric in this market is total ROI which will factor in CoC, mortgage paydown, and appreciation. Happy to connect and send you my property analysis spreadsheet if it helps.

Hi Misola! Congrats on your first project. I'm also just north of Boston and have been investing here since 2013. This area is an amazing place to live, and for that reason highly competitive in terms of real estate investing. Happy to chat with you more about any questions you have about growing your portfolio in this area, feel free to connect!

I think you're on the right track with Lowell - that's consistently been one of the most affordable markets in the greater Boston area when you consider price to rent metrics. If your goal is to offset your mortgage with a house hack then Lowell would be a good bet, but if you're looking for a longer term appreciation play then the areas closer to the city would be better, although the offset from cashflow may be lower than what you're looking for.

A good step for you would be to dig into specific areas more as @Lien Vuong noted above.

One thing I would add here is to check prior landlord references, not just from their current one. If they are difficult, the current landlord may not give you a straight answer because they want them to find a place and move out. If they don't have prior landlord references, that's a valid excuse for not moving forward with their applications - you simply want more rental history.

Came across this thread while researching investment HELOCs and just wanted to give an update on my search. I coincidentally was looking in NH like the original poster, but ended up calling banks throughout all of New England to no avail. I even called around to DSCR lenders and they weren't even doing them. Seems that lending standards have tightened quite a bit since these posts (that's what most bankers were telling me on the phone). I did, however, have some luck with a unique mortgage/HELOC combo through Mascoma Bank. I'm currently in the underwriting process so it's far from funded, but it was the only bank who would even consider some type of investment HELOC. They're letting me take the smallest mortgage possible (around $75K) and then have the rest in a HELOC.

I was originally looking for a straight HELOC because I intend to use the funds on a SF flip, but I'm not sure when I'll find the right deal, so having access to the money without a monthly payment is advantageous for me.

I came across ONE bank - Washington Trust out of RI - that is actually doing investment HELOCs, but only in the southern New England area (like south of Concord, NH). So if anyone has property there I'd try reaching out to that bank.

Hi BP - I'm actively looking to connect with wholesalers in Massachusetts. I'm a broker at a large cash buyer of distressed properties basically anywhere in MA. We are currently buying around 20 properties a month for our investors and looking to work with anyone who can bring us discounted or off market listings.

Thanks!

Tyler

Hi Lewis - let's connect. My office buys deals from wholesalers quite often so we can be a great resource if/when you find a deal.

Thanks!

What's up BP?

I have a few properties around Boston and one of them is a prime condo conversion candidate. Problem is I'm a die hard buy and hold investor so really only like to sell property when it can give me significant gains over holding. I'm trying to rationalize making a decision between condo'ing it and holding, and here's where I ended up with it. I'm evaluating both options over a 10 year time period. Would love some feedback if I'm missing something here!

Scenario 1: Condo conversion

I'll skip all the renovation details and get right to the point - reasonable net profit from this project would get me around $863,000 which, after LTCG tax would be around $733,550. These are luxury, townhouse-style units so that's why the high dollar amounts. I would then safely reinvest this in a low risk option (high yield savings, ETFs, bonds, etc.) and am assuming a relatively reasonable 5% return. After ten years compounding at 5% that amount would be worth $1,348,602, which would really be $1,256,344 after accounting for LTCG @ 15% (1,348,602-733,500 * .15).

Final amount for condo conversion: $1,256,344

Pros: After money is reinvested, passive income

Cons: Taxed twice, once on sale, once when investments are sold, no real control over money once invested

Scenario 2: 10 year hold

I pasted my numbers at the bottom of this post so it's easier to see, but my thought process was as follows:

1) Calculate value based on reasonable appreciation trends, plus cash flow. Yearly cash flow is post tax for simplicity. This amount is fairly predictable year over year, even with repairs.

2) Calculate my loan payoff @ year 10 to find equity at the time of sale.  

3) Multiplied this by LTCG of 15%. I know this would likely be a touch lower since I'd be deducting any renovations or selling expenses, but just left this for simplicity.

4) Added together my after tax sales proceeds and cash flow to arrive at a 10 year number of $1,255,274.

Considerations:

I found it coincidental that both numbers were within $1,000 of each other. If this analysis is accurate enough, in this case I'd most likely hold, since I could 1031 the gain at the sale instead of straight selling. I also prefer real estate over stocks, even though I manage the property myself. I will say having that passive income is tempting but it would come at the cost of doing a full blown condo conversion to free up the capital.

Anyways, am I thinking about this right? Anything else I should consider here? I'm not the best at math so am using, what I think, is a more common sense approach, but seemed to make sense to me. I guess I could probably work in ROE as a metric here but not totally sure.