Boston Sweat Equity SFR or Owner Occupied Multi-Family

[Jeff M.]

Hello everyone at BP,

My fiancee and I currently rent near the Allston/Brighton border and plan to live here long term since we can both walk to work, the grocery store, and entertainment. We have $300k in liquid assets, but would prefer to only put 20% on a SFR fixer-upper with asking price under $400k and I would enjoy doing the rehab myself.

Since a lot of the houses in the area are multi-families in the $600k's, we would consider owner-occupying one. If this is the case, it seems difficult to get good cash flow, but I am okay with that as long as it is not negative.

I check the MLS daily and have a good feeling for the market. I am not in any rush to purchase until the right property comes along, at which point I will act quickly.

I look forward to feedback on any part of my situation, but specifically I am wondering whether to use a buyer's agent or just an attorney to look over the paperwork since I am doing the searching. If I should use a buyer's agent, I would appreciate a recommendation from the myriad of choices in the area! Thanks in advance.

[Shaun Reilly]

Hey Jeff,

Welcome to BP and good luck with finding a great place for you and your fiancé.

I will say that finding a place in Brighton for less than $400K listed is going to be tough. Quick look at the 02135 Zip there is a grand total of 1 active listing that low I decent looking 2BR 938sqft place. Probably would have to go off market to find a fixer without a feeding frenzy. BTW don't see any active SFH in Allston at all with the only recent sold near your criteria was $410K.

The multi might be a better way to go to get a little more house and get some supplemental income. One thing you should be aware of is that this isn't a "Live for free" by getting a duplex. If you get a decent deal and solid rents you can probably cover 60-80% of the mortgage to start which will probably get you a property for well under the cost of rent.

If you eventually move but keep the rental the hope is that rent appreciation will make it so it cash flows decent in the future. If you moved a little after a year you will probably make a small positive cash flow if you still self managed or a small negative if you didn't.

The play around here is usually appreciation. The area has always done well, even during the recent crash of the millennia it didn't go down much and is roaring past the previous peaks.

Like any place in the country you CAN find rentals with great cash flow but this isn't a plucking one off the MLS areas. Definitely need to find a good off market place with creative financing to do it.