If you were in my situation what would you do?

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Joe,Here is what I wished I would have done when I was in a similar situation. Get a realtors license and by your own place. If you can afford it buy a duplex. If you can afford a 2 bedroom rent out the other room. I never got a real estate license until recently. My last personal deal was 750k and I found the deal myself but the realtor selling it would not take a lessor percentage. So I got a real estate agent. That commission would have been the down payment on a small house for nothing I had not already done anyway. If you buy a 200k home and get 75% of the 3% buyers commission that is 4500 bucks. Now you can go to one of those restaurants you seem to love so much. When you do go out to celebrate your awesome deal and your bright future, get yourself a margarita and think "man I am glad that guy from bigger pockets gave this sweet advice."

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@Maureen F. Thanks for clarifying the difference between a coop and condo. I honestly hadn't really heard of them until Michael A. mentioned it. I guess that makes sense since they're not as common here.Where abouts in Dorchester did you purchase? How has it been working out? I'm so interested in the financials for your deal considering dorchester has more properties at my price range than any other area. I've started coming up with a few banks that I want to try to get pre qual from last week actually, any recommendations? I was recommended by an agent to check out eastern bank and FBC home loans. I can't help but to question recommendations though.Thanks for all your advice Maureen, -Joe

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Michael A. I like that approach. Secure a property to live in in a smart, economical way then move on towards real estate goals. How long did you look for your property? And ultimately where did you find it? Was it publicly listed or did your agent bring it to you as an off market deal?I'm working on trying to find an agent right now actually. I've worked with a couple in the passed but it seems when I explain my goals they loose interest in me. I know people that have had real estate agents bend over backwards for them even though they had almost no money to put down. The buyer was also not nearly as picky as me. Any tips on finding a good agent?-Joe

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Michael A.I really appreciate your long reply and it's awesome hearing from someone located in a city environment. You're right, I want to be in this for the long haul so a tucked away savings account seems like a must. It's funny you mentioned studios, one just popped up on the market that was priced in my budget but I hesitated in going to see it. I went to finally contact the agent a week later and it had already sold. Lesson learned! When you say in NYC you can't rent out studios, do you mean that the contracts you sign do not allow you to rent them out or that there is no market for them? Congratulations on your first home! It must feel amazing to start to see the plan to come together.

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@Joe Burns -- We bought the condo in 2007 and sold in 2015, on Dix Street near the Dot Ave end. It appreciated in value by 18% (despite a moderate downturn in the early years), and also the principal payments on the mortgage increased our equity, so we consider it a success. We bought as investors, so had to put down 25% and endure a higher interest rate than an owner occupant would.For a lender I highly recommend Bonnie at Rockland Trust; she recently helped my son buy a multi-family in Dorchester. She works with all the first time buyer, etc, programs, she's very responsive, and she and the bank are fast. It was very difficult because of the crazy market, and other things that can happen. For buyers agent I recommend Eric Gould of Gibson Sotheby, he cheerfully stuck with it through many showings, rejected offers, failed inspections, etc.For those affordable units, Brookline also has an Affordable Housing Opportunities mailing list.

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@Joe BurnsJoe, I was never actually able to purchase an affordable unit myself, but I did enter one lottery and bid on one resale opportunity (wish I had gotten that one!). I have a friend who has been actively entering lotteries. She has probably entered 4 total in 2 years. She was drawn as #2 in a Somerville lottery, but unfortunately for her the person who drew #1 did move forward with the deal. She was very close though. From what I hear, the Somerville lotteries are much less competitive, so you're drawing against a smaller pool of applicants. One detail I forgot to pass on...you don't have to move out if you later make more income or build your asset value above their limits. You just have to qualify when you apply to purchase. Then you're free to become ultra successful while continuing to enjoy your affordable unit indefinitely. The best way to learn more is to call up the guys from Maloney. They are the experts. I've talked to them before with questions and they were helpful. Get on Maloney's email list and get on the Somerville one too. Arlington also has one, but their offerings have seemed few and far between. Only seen 1 or 2 in five years or so. Newton also has an email list and a reasonable frequency of offerings. Cambridge does have a program (so they say) but I've never been able to see listed units or even find someone who was helpful to talk to. They seemed to enjoy making it difficult, in contrast to the other groups, who are wonderful to work with.

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@John PaulerJohn, thank you so much for the great advice. It's great to hear advice from others in the Boston area. I just checked out the lottery website and they're sending out applications very soon. Sweet timing!Is this something that you or people you know have done? I'd love to hear about the position someone was put in after winning the lottery (literally) and buying one of these properties.Thanks again! -Joe

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@Pete Perez Thanks Pete! I appreciate the encouragement. Do you think it could be a long term strategy to repeat this again and again to build up a portfolio of properties?

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@Joe Burns -- your ideas are very well formulated and it sounds like you're getting well-prepared. Re @Norm A. 's comments about coops, New York is full of coops but they are rare in Boston. A coop is similar to a condo, but IMO, the structure is more complicated, and the coop board can be more difficult than a condo board. If you buy a condo, check the condo docs (they might be on file online via the Registry of Deeds, if not you'd need to check with the seller) to see to what extent they allow rentals. The one we owned allowed rentals as long as it was for at least 30 days (in other words, no transient rentals) and the renter agreed to abide by the condo rules and regs. Ours was one unit in a three-decker in Dorchester and the condo fee was very reasonable, probably because it was self-managed and the owners pitched in to do basic tasks like yard maintenance. You could also look into buying a really small house, then you wouldn't need to be concerned about condo fees and rules. You should also look into the Boston Home Center for info about mortgages etc. Some mortgages are only available to first time buyers, and some do not allow you to rent the property at any time. And get qualified from a lender, find out if you can buy a single or multi and for how much.

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@Joe Burns - glad to see you getting off to an early start. One thing any ambitious young guy in Boston should absolutely look into is affordable housing. These are income-restricted units (people over a certain income cannot buy them), which typically sell for about a third the market price initially. So you get to pay very little per month, while living in a place 3X as nice as your expenses would suggest. Additionally, in Boston specifically (it is different in Somerville and Cambridge), when you want to move, you can "appreciate" the property by exactly 5% per year. This is not a hopeful asking price, but rather the exact price you will sell it for. Example: $600k property on open market, you buy it for $200k. You live there 5 years. After 5 years, you can appreciate it 25% (5% x 5yrs). So you list it for $250k. It was a $600k place 5 years ago, so people line up to buy it at that $250k max allowed sale price, which is still a fantastic deal. Do some quick math and calculate your guaranteed ROI if you put 5% down. You get a cheap place, with guaranteed appreciation, and no risk - you can predict with perfect accuracy what it will sell for at any point in the future. There are some drawbacks...1) you can't ever use it as a rental, so it's best use for you is as a really cheap primary residence with guaranteed appreciation. This is not a way to buy an investment unit. It's a way to cut expenses and eventually build a lot of equity when you sell. 2) obviously anyone reading this thinks "too good to be true". Well, it is true, so a lot of people apply for the lotteries. You could apply to every unit for 5 years and there is no guarantee you'll ever get one. But if you do, you're in great shape. Here is an example of 4 units available via lottery right now in a new development: http://www.maloneyrealestate.com/allele-bra-afford...You can see the income limits - 80% AMI means 80% of area median income. 100% AMI means 100% area median income. Different units have different restrictions, so at some point you'll be disqualified from 80% AMI units, but you may still qualify for the 100% units. The site I linked to, Maloney Properties, handles most of the affordable housing units in Boston (maybe all of the new construction units, and at least some of the resales as well). Get on their email list. Other towns also offer affordable housing programs - however, the median incomes in those towns will be lower than in Boston, so you disqualify yourself at a lower income amount. You might still be okay for most of them today, but maybe not in the future, so don't delay doing your homework! The other major thing to distinguish various towns' programs is their respective appreciation rules - while Boston's 5% per year is very generous and allows folks to build wealth quickly, other towns favor keeping the costs lower indefinitely, and will dictate a TBD cost of living adjustment when you sell. This will be less than 5% per year, maybe less than 1% per year, as their goal is to maintain the unit's affordability for the next owner. Newburyport also has a 5% rule. Somerville has a TBD COL adjustment. Do some research, and figure out which towns' rules favor a young guy trying to build wealth. In Boston, Somerville, Cambridge, etc, you are typically going to be limited to 1 or 2 bedroom units. If you would be willing to go further out, there are often 3 bed units available. Now we're talking about buying a house that will be big enough to hold your future family, on expenses you can afford (by definition) when you're 20 years old. Talk about a game changer. Here's a great resource for *all (sometimes the Boston proper ones don't make it on this list, but I think all others do) MA affordable housing properties. Mass Access Housing RegistryGood luck!