Should I focus on 1 Area or multiple?

Question

I'm first starting out and would like to know if it is better to focus on one specific town or multiple. Right now, I'm very interested in 2 towns that are literally next to each other. However, I am also interested in a specific part of Boston that is on the rise. Is it better for me to focus mainly on the 2 towns next to each other or include all three when I am analyzing?

Alex Cwiakala · Answer

@Patrick Wheeler We reno most of them ourselves. However we have a JV with Doug for the one he found. We're always willing to partner up with other investors on deals if it makes sense.@Peter Pezzano We currently have two multi family/condo conversions scheduled to close. Both came from the MLS. They just don't sit long. And we have 2 single family knockdowns with a permitting contingency that we found on the MLS. There are deals on the MLS, you just have to be FAST! It's competitive but we don't mind that.

Thomas S. · Answer

It makes no difference where the property is as long as you know and understand the specific market and the numbers work in that market. But knowing multiple markets does take more effort to stay on top of. Beginners beware investing in income properties takes a lot of time and effort to do right. There are no guarantees of success in business.Do it wrong and you can face bankruptcy.

Peter Pezzano · Answer

Thomas S. Thanks for the advice Greg, I have a good understanding of all 3 markets.

Mike Hurney · Answer

@Peter Pezzano I'd like to see you master one area first.What's your favorite City/Town (say Somerville please) and how many houses are there?@Lior Rozhansky Good call on Eastie, I agree unless you master it.

Patrick Wheeler · Answer

@Alex Cwiakala also, are you guys now going through with the rehabs yourself? I know Doug is helping out with one, but what about the other two?

Peter Pezzano · Answer

@Alex Cwiakala are you buying your deals in Eastie on market or off?

Alex Cwiakala · Answer

Hey @Peter Pezzano! Welcome to the area! So much of the city and the surrounding areas are just blowing up right now. I live in Quincy and we'll work an hour radius outside of Boston. Honestly, I don't know if you have to focus on a specific market unless you have a target price range. Being an agent or having an investor friendly agent is necessary to determine good deals. You can determine a neighborhood in any area based off of comparable sales. Once we check the comparables in the area to our subject property, we call a couple of the top agents in that community. The agents are the "experts" and they know the market better than anyone. Deals are everywhere, no reason not to go get them. @Patrick Wheeler Eastie is blowing up! We've got 3 underway there and the market continues to appreciate!

Patrick Wheeler · Answer

@Lior Rozhansky its hard to imagine any of these markets not increasing overall. Everyone will seemingly continue to get pushed out of places until everything stabilizes. I know a developer that will say East Boston is already well underway to appreciating. He has seen a pretty significant demographic shift since the beginning of the year.

Lior Rozhansky · Answer

@Peter Pezzano fair points about Medford and Malden-though this logic really applies to all of Boston; if you bought a duplex essentially anywhere (give or take) on the greater boston area market two years ago you can cash in a nice check today. From what I understand, besides banking on general market appreciation, there are other local market factors to evaluate i.e economic stimulus through jobs, government funding etc. My property was a cash flow play, I just thought that the casino coming in can be nice icing on the top if it really boosts the city's local economy (or it can drop my value, who knows lol).

Peter Pezzano · Answer

@Lior Rozhansky I consider the Medford market getting strong due to the overflow of people being priced out of Somerville. Just like people were priced out of Cambridge, those same people went to the next market. The tufts market is one thing but the Wellington areas in my opinion are starting to take form due to the train being so close. As for Malden, the rents have grown strong there. I could have bought a 2 family in Medford for 500 or less 2 years ago. I'm now seeing the averages 2 family in Medford between 6-650K. I feel like Malden 2 families are in the same boat, the average is about 550K. It's more likely to find a property in Malden that cash flows better than Medford in my opinion. It will be interesting to see what happens in Everett. Did you buy there because of the Casino, or was the property just a solid cash flow/ appreciation play?