Househacking in Boston

[Remy Bonser]

Hello, I am currently a tenant in East Boston living in a 3-unit multifamily house. I am interested in starting my real estate investing journey with a house hack. I would like to get some input into how difficult or challenging that may be, particularly in the Boston area. Also, would doing a house hack with a friend be a good or bad idea? Any advice or pointers would be great! Thank you!

[Andrew Kerr]

@Remy Bonser if you can qualify for a loan on your own, I would say skip partnering with a friend. Do the deal on your own, then have your friend rent a room or unit from you.

I don't do deals in Boston, but do deals in several MSAs. The basic principles will apply. You want to make sure that when you buy the property, the rent you will receive will cover all your costs (mortgage, T&I, maintenance, capex, vacancy, etc..). Run the deal through the BP calculator and make sure the deal works if all the units were rented. The one challenge I have found in higher priced markets is that rents, while very high, are not high enough compared to the sales price, so the deal doesn't make sense.

[Blake Denman]

Perhaps see if your landlord would be willing to do a lease-option with you (assuming he'll sell at a reasonable price).

If the owner is an investor, ask him to lunch and talk to him/her about how they got to where they are.  Talk to local agents and investors and see where in the area a househack may make sense (won't be easy to find around Boston, be prepared for that).  Research property costs and rental rates in your area and see what price you'd have to buy at to make the numbers work.  And most of all, continue to educate yourself, and that will help you see where you need to go and what you need to focus your research on.

[Lior Rozhansky]

@Remy Bonser It's certainly possible, but you need to figure out and understand the different sub markets within Boston you want to tackle and how to evaluate those deals. East Boston is pretty tricky for rental as multies are more valued based on condo potential rather than "true rental property". It'll be tough to make numbers work if you are buying a three fam for 900K+ that needs updates. 

There are other pockets of opportunity within Boston though, from pockets in Dorchester/Roxbury to areas like Roslindale. At the end of the day, you just have to learn prices and rents in these areas and how to evaluate them. Also, if you are buying older, non-renovated multies you'll want to thoroughly assess things like current condition and needed work (since such a large % of inventory here is from early 1900s etc). Hopefully that made sense, but house hacking is definitely the path to get in the game!