Boston Area newbie - Multifamily rental analysis

[Ed Clare]

Hi everyone, I'm looking to get a good idea of how to analyze deals on multi family units around the suburbs of Boston - the 2% rule of thumb mentioned in Brandon Turner's book - Rental Property Investing,  doesn't really seem to hold true especially with the prices as high as they are. I was thinking that maybe a .5% rule is more appropriate, but wanted to get the opinion of other investors in the area...

Here is my situation: I'm single, 38 and my primary residence has around 115K of equity, which if I took would leave me at about 80% LTV. I have very good credit and only a small amount of consumer debt (less than 10k). I only have around $20,000 in liquid funds at the moment, but I could build that up at the rate of about 1K a month.

I've been looking through a lot of multifamily rentals in the 400-500k range (need some updating), all located at least 30 minutes drive from Boston all the way out to Worcester. 

A little bit about me:

Growing up my parents had a summer rental on the cape that I rented out to weekly renters, so I've gotten pretty good with professional interfacing with renters, that's how I know I'm ready to make this step... I'm extremely proficient in IT since I do that with my full time job with 15+ years experience.

[Avery Heilbron]

@Ed Clare Welcome to BP and congrats on getting started! As @Jonathan Bombaci said rules of thumb are just that. In my opinion it's too bad that the face of BP had a real estate investing path  where he was buying $60k homes and where those rules of thumbs make more sense. It doesn't give newbies a good sense of reality in most markets - especially Boston. That being said my 2 multis are not anywhere near the 2% rule, but have already made me wealthier than I could imagine and I am not even 2 years in. Feel free to PM me if you have any questions and good luck!