Do I buy the old family house?

Question

Hi guys,

I've been meaning to get into real estate for almost a decade. I wanted to buy a house in Seattle in 2012, but gave up when I couldn't find a co-signer. Oops. Then I got distracted building my little tech company.

Now I want to finally get started in real estate. I have some experience being a semi-landlord in Seattle, renting out the other rooms in the house I've been renting. I definitely have some relevant experience from growing and running my company, in managing people, finances, negotiation, and marketing.

I had been looking at stuff in Seattle and where my parents live in Montana, but now all of a sudden my grandpa is selling what was my great grandpa's house in Massachusetts. It definitely has a lot of sentimental value. My great grandpa built the house, and both me and my dad had been visiting it my whole life.

I would definitely like to buy the house just for the sentimental value, but I also don't want to derail myself financially. If I buy this house, it would make buying anything else a lot more difficult for a while. But I don't know the market in Massachusetts, I don't know how much I could rent for or how difficult it would be to find tenants.

So I would love to hear opinions from you guys on what would make this a good deal, with your impartial opinions. Thanks!

https://www.zillow.com/homedet...

Sherief Elbassuoni · Answer

@Orion Bukantis, I would recommend you to invest in the place that makes financial sense. If grandpa can offer you owner financing, or a price cut, and the market there is pretty strong, you should consider buying his house.

That said, the Seattle market in here is a pretty strong rental market. It leans a little towards appreciation, but I still see deals that generate very good positive cash flow.

I am an investor-friendly agent and investor that owns my own properties. Let me know if you got questions and we can have a call or coffee to discuss your long-term real estate plans and how I can help you achieve them.

Thanks!

Nathan Gesner · Answer

Find a professional REALTOR in the area that can tell you what it's worth. Find a professional Property Manager that can tell you what it will rent for. Or you can do a couple days of research and get this answer yourself, even from a distance.

If you bought it for the right price, you could meet your financial goals AND maintain the sentimental connection. Is grandpa desperate for top dollar or would he be willing to take a price break to keep the farm in the family?

What's grandpa's ultimate goal? If he sold the property today, what would the tax implications be? Would he be willing to owner finance the property to you with terms favorable to you? This would reduce his taxes and give him a steady income to live off for the rest of his life.

Time to pull out your thinking cap and see if there's a win-win for all parties. At the same time, don't throw away your future just to hold on to the past.

Erin Connors · Answer

Orion - this summer you couldn't find a rental down the Cape it was so busy with people staying in MA during Corona.  I don't think you will having any problems renting.  Depending on how close you are to the beach/ how many beds etc. your rents vary drastically.

I assume you already know most people will try to find a winter renter from October to May - for market monthly rent and then they rent by the week in the summer.  I have a friend who is doing a winter rental in Falmouth right now and the rent is $1400 a month in the winter and starting in June it rents for $5000 a week.  If you are getting the family discount this would likely cash flow well.

Mason Hickman · Answer

@Orion Bukantis

I am an active agent here on Cape Cod and the south shore and operate an STR of my own. From the sounds of your description, this property is actually in the Buzzards Bay area of Bourne. Short term rentals on the "other side of the bridge" are going to have lower demand and lower average daily rates.

@Erin Connors is correct that demand on Cape was very high this summer. However, the location of the property with a 4/2 is not going to get you $5,000 per week in the summer. I realize Erin was using this as a point of reference, but I want to set your expectations appropriately. You could probably do well depending on how you furnish and outfit the place but it won't be as high as Erin's example.

The market is very hot right now in MA with very low inventory. This has been driving prices up considerably. I'm happy to talk more about your specific situation; feel free to PM me if you'd like.

Orion Bukantis · Answer

Wow Erin, those are some crazy summer rent numbers! I'll definitely have to look into that more. Thanks for the info!

Theresa Harris · Answer

You can't completely remove emotion from it, but how much would it cost you to hold it and what could you get for rent?  Look at the numbers first and see if it makes sense.

Orion Bukantis · Answer

Thanks for the replies, guys! Finding local professionals to get the local info makes sense as a great place to start.

Erin, it's in Bourne, right on the inland side of the cape cod canal.

Erin Connors · Answer

In general the MA market is on fire right now, with every house that goes on the market getting multiple offers well over asking.  Rents are also really strong, and I don't think you will have any problem finding tenants.  I sold my house on the south shore this month and moved 90 miles west of Boston, which is a very different market. I could answer better if I knew what town in MA?

Do I buy the old family house?

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