Young Investor From Boston in Quite a Pickle, Share Your Tips

[Mingze Wang]

Hello everyone, I been into real estate for the past 3 months. Seems like everyone here also like real estate, so I figured I'd ask for some tips.

A little background - I work full time in tech field, but I ALWAYS had a passion for investments. My dad is an accountant and real estate investor in a college town in Western Massachusetts, so I guess that rubbed off on me. In beginning of 2018, with an ambition, no knowledge, and a gun-ho mentality. I made my first offer on a house I can barely afford as a primary resident (3bd, 1.5ba close to Tufts University), I am glad the owners went with another offer, I would of paid close to 2.5k a month in "rent" for a single room assuming I rented out the other rooms at a near optimal price.

Since then, I've read Rich Dad, The Book on Rental Property Investing by Brandon Turner, lurking daily around BP, and I've started listening to BP podcasts. I realized the market is way out of my league around me (Greater Boston Area). People would pay 750k for a 2bd condo ~650 sq ft in Cambridge, some would offer cash with no contingencies. I know it's nuts.

Which bring me my question, what can I do? As a novice investor living in an area with one of the hottest housing market. Here are the things I been looking into:

1. House hacking, in a B-/C+ area that still has access to easy public transit into the city. Extremely hard to come by though, but they do exist

2. Summer vacation rentals in Cape Cod, this create an issue where these are treated as 2nd homes or investment house, where I would not get the best APR and I can't use my ROTH IRA as a down payment for my first home.

3. Get a fix-her-up. I only swung a hammer once or twice and my college degree got me good at googling things. Bank is less willing to finance this as well.

Any one has any tips doing the ones mentioned above around the area? I'd love to listen

I am also looking to join some real estate investment groups for networking purposes. I use meetup and I was able to find a few. If you know a good one, please let me know!

[Jim K.]

@Mingze Wang

Boston is tough. We looked briefly into moving there before we realized we weren't really happy with the idea of living permanently anywhere in the USA. Finally, we realized that we were in one of the best cash-flow rental markets in America and decided to go ahead with getting into real estate through fixer-uppers. I too did not have a degree that prepared me for any sort of manual labor. But I learned that the work really doesn't care who does it, as long as it gets done, and eventually I became a rather good handyman and parlayed that into DIY landlording as a way to break into the market here.

If you're determined to stay in Boston, I cannot recommend getting out to local real estate associations and talking to other local investors highly enough. I have NOT been able to do this as much as I would like to here, and it's hurt me a bit so far.

I would further recommend Option #1 on your list, and I would recommend @Craig Curelop's approach to house-hacking (IMO, his podcast on the BP Money Show and the straightforward approach he lays out is pure gold for anyone thinking about househacking in an expensive metro area).

I would buy my first book on basic home maintenance before I bought my first property, specifically How Your House Works by Charlie Wing. From that point on, I would plan on spending money on Amazon on three different kinds of books: personal finance, real estate investing, and basic home maintenance and improvement.

Mingze, househacking from the start is just one way. I wish I had done it grom the beginning, and it's what I know a bit about now because I'm working on it. I'm sure there are other ways. I'm also sure some of them work. But I've lived through the success of local real estate investing, careful saving, and investing in SFR and small multifamily. I know my way is working for me and I've seen others fail.

I wish you the very best of luck.