Starting out in Massachusetts

[Khouri Rice]

Good Morning, ever since I have stumbled across BP I have spent countless hours reading and learning, and really stoking the fire. This is such an amazing community.

I am looking for some advice on which way to go, and was hoping some people either in my area (Eastern Massachusetts, or in a similar market ($$ wise) might be able to help focus my direction a bit.

A little background about me, I hold a full time day job (and make pretty decent money) which provides me with good health insurance (have an 8 month old at home) and also run a contracting business on the side (which makes pretty decent money as well), but am really looking to begin investing in real estate to provide me with the flexibility/reward for hard work, as I had when I owned another business 10 years ago. I have many years of property management experience which I know will come in handy.

So here is where I need a little advice...

As most of you know the real estate market in Mass is pretty high, and acquiring an owner occupied multifamily (2-4) property will be my first purchase, but then I am not sure whether to purchase another multifamily property (as an investment property), which typically go between 250k-600k or to go the single family rental route (could probably pick up some REOs or properties that need work for around 75k-95k? Maybe look for single family homes in some semi-distressed areas (Lynn, Lawrence, Brockton) that need a little fixing up (I will save huge labor costs by just using the guys who work for my contracting company) and then slowly build a portfolio that way.

One of my main contracting clients has also been really after me about going together on some properties where he basically just puts up the money and waits for his return (whether it be via flip, buy and hold, or cash flow), because he sees how quick, and efficient we are able to turn the work around, and we have built up quite a great relationship.

I know I am getting ahead of myself, because I havent even bought my first multifamily yet, but I like to always have a goal off in the distance that is just a bit further than the next.

Thank you and I look forward to your comments.

[Justin Silverio]

Hey Khouri Rice. I agree with Ann - finding multi's in good areas that are cash flowing is very difficult. There is a lot of competition in our market which is pushing up prices. Have you thought about finding multi's and converting to condos? This is a good strategy for some areas and may enable you to purcahse the property at a high price than other investors who are looking to buy for cash flowing purposes.

I think you have a good skill set for either flipping or holding so it's up to your comfort level and accessibility to capital.

I actually have a deal I just closed on in Beverly this week. It's a 2 family that we are either going to wholetail or convert to condos. (Ann Bellamy - yes, we finally closed on this). I'm having an open house on Sunday to get all the contents out of the property that the previous owner left behind. If your interested in stopping by, PM me and I'll give you the address.