Not enough money for my area?

Question

Hello all,

I'm looking into starting an investment portfolio by purchasing my first MFH within an 8 month timeline. I live in MA, which is a notoriously expensive state, relatively speaking. Most of the duplexes and triplexes etc... in my area fall into two categories. They are either A) Built pre-1900 and pretty beat up... or B) Very Expensive *400k - 600k* for something half decent.

I'm looking to owner occupy for a year or two within one of these investments, so I don't want to be forced to living in a dump just because I may not qualify for a mortgage at the higher level. I'm 21 years old, and I have about $20-25k available in the bank for my startup.

Investors in MA relate?

Thoughts?

Mike Hurney · Answer

@Christopher Johanson  Welcome.

I agree with @Eric Popso "I  think your first step is to see what you qualify for, I think with   $25k to put down at 21 years old you might surprise yourself."

The quicker you find what you qualify for, the quicker you can focus on what you can buy and where!

Mike Hurney · Answer

@Steven Tierney Yes, I've had good luck with grad students down near Pickering Wharf.

Steven Tierney · Answer

Hi @Christopher Johanson @Taylor Grabus , I just wanted to add my .02 - A friend of mine at work made out really well with a 2 family property in Salem, MA.  Salem State University has recently been revamped.  It might be similar in Worcester considering the $ Massachusetts is putting into Worcester State U.  My friend got into the 2 family home (yes, an older property) as an owner occupied, but because of the adjacent university, has never had a problem renting out the other unit, and actually rents at a premium because of the demand.  He purchased using an FHA 203k rehab loan, total investment w/improvements was under $300k.  I've read (and friend confirmed) that doing a 203k can be a rather intense, drawn out, and at times a frustrating process, but if you're willing to put in the time, stay organized financially, follow the rules for inspections/contractor draws, it can work out really well... or so I've heard at least.  Thought this might help, there's a lot of info on BP about 203k's.

Christopher Johanson · Answer

I've been working since I was 14. I've treated myself to a few nice things here and there but its good to have at least SOMETHING to sit on.. $$

Mike Hurney · Answer

@Cal Mitchell  Do you know how much you qualify for?

Elizabeth Colegrove · Answer

Welcome!

Everyone has their own opinion. We couldn't find a multi-family that made sense  so we invest in single family. It has done us very well. We rent hacked but we have had many friends that have rented out all their rooms and it has allowed them to live rent free. So there are tons of different options and ways.

Also remember that there are 5% conventional out there. So your 25k will buy you approx. 500k of house.

Cal Mitchell · Answer

I too am looking to owner occupy a MF around Boston (Maybe Allston). Maybe we could combine resources in some way.

Javier Diaz · Answer

Have you tried Queens? I live in a very nice duplex. But yes, it's Woodhaven Queens.  Not Williamsburg Brooklyn or even Bushwick. But we have a Trader Joes and a Pool!

Christopher Johanson · Answer

Moving creates a new world of issues. Leaving behind work, family, and going to a place where (maybe) there's better markets for house hacking, but at the same time you aren't as familiar with those markets so it becomes a challenge

Steve Wilcox · Answer

Many areas do not work for house hacking. Where I live it does not, last year we moved and spent over a year looking for one of these duplex, triplex buildings that we could owner occupy where we could live rent freeish, or at least would be a solid investment once we left. For all those that live around NYC, SoCal, North NJ, you just can't do it.

We ended up moving from a large house to a smaller place in the same time to lower expenses but house hacking just does not work anywhere my lady would consider living in.

Investing is highly localized and some strategies work better than others in different areas, and you have to be honest about where you live and what your goals are. We consider moving to a cheaper part of the country as we would be years ahead of where we are now, but because of high paying jobs in NYC and family we are tied to this area.

Not enough money for my area?

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