All Forum Posts by: Adam Conrad

I am part of a condo that I believe is experiencing structural damage as a result of an abutting property digging out more earth, causing some cracks and shifting.

It has been oddly difficult to find a suitable structural engineer to do an assessment on our 4-unit free-standing property. Can anyone recommend any structural engineers (or firms) that handle this size work in the greater Boston area?

If Cash on Cash Return is...

CoCR = (Rent - Operating Expenses - Loan Payments) / (Down Payment + Closing Costs + Renovations)

And I'm using a 1031 Exchange to upgrade from one property to the next, does that mean my Down Payment is 0 if nothing comes out-of-pocket for this property? What if I use the loan to handle renovations, so it goes into my loan payments, does that just mean I increase the Loan Payments section and Renovations = 0 as well?

@Charlie MacPherson good to know - that actually gives me a ton of peace of mind, I've always had a lingering worry about the sloping in the house. I already have comps as I did a refinance so I know I can make quite a bit off of a sale, but I do want to retain cash flows, which seems very plausible in the current place. But I did find a place in East Boston where it looks like I could live in one of the 3 units and then rent the other 2 out and likely have it cover the mortgage and expenses and still cash flow $1000/mo, and that cash flow will only increase once we move out. Thoughts?

@Andrew Kerr yeah I'm not seeing too much right now but I do have my eye on one multiplex and running the math I found I could get this place at a discount, live in one of the 3 units, and maybe get $1000/mo cash flow and live rent free until we moved out and then turn that cash flow into closer to $3000/mo. That's why I'm considering trading up.

Was reading 7 Years to 7 Figure Wealth on this site and I'm at Year 5 - basically he takes roughly the same equity I have and trades up his 3 properties for a multiplex, that got me thinking about my current situation:

I got very lucky buying an undervalued property in a red hot market (South Boston) that has market appreciated over 42% in the last 4 years. I also timed my refinance perfectly, so my expenses are about $2100/mo while rents in my area go for in excess of $3200/mo. My property isn't the nicest, but I imagine with even $10k invested in my property I would further increase appreciation as well as increase rents to the median. $1100/mo cash flow for a 2+ bed sounds incredible, but I'm worried about a few things:

• South Boston is post peak. Housing prices are set to fall in 2018-2019, rents might level off/drop?
• My house has had structural issues in the past. We've had 2 structural engineers come out in 2013 and 2017 and have said things are fine, but it's got a serious grade heading toward the back of the house. Whether it gets worse or not, it's noticeable for sure, and could scare away renters.
• CapEx is looking pretty steep over the next 10 years. 10-15 to replace roof, likely re-side the exterior walls this summer to increase curb appeal and better protect the exterior walls. That alone would probably be $30k out of pocket for me over the next 10 years.

So taking a page from 7 Years to 7 Figures, I'm considering a 1031 Exchange: rent my current place to have it be considered an investment property, then 1031 to trade up for a multiplex. The problem is that when I look at most advice here, they advocate cash flows of $100-200/door, and for 4-6 beds in Boston $1200/mo cash flow would be great for a 6 bed, but that's basically the same as my current condo, with 3 times as many people (and x2 the units) to worry about...I guess that could be looked at as a hedge against vacancy, but what I'm getting at is:

My current property seems like a cash cow, but might cost me a bit in the future. Would trading up be smarter than making my current property great through forced appreciation and hold for the long term?

Hi there,

So I've been on the fence about how to assess my 3-5 year plan for my current condo that I live in.

I purchased 2 years ago a condo unit that was undervalued for the area (South Boston, near the beach, extremely up-and-coming area in this city) based on $/sqft. I put 10% down with a 4.25% 30 yr. I refinanced this year down and timed the market perfectly: 3.37% 30 yr fixed, erasing PMI because my property appreciated 29% in this time (avg. 12.43% YoY). I know the property has appreciated this much because the refinancing company paid for an assessor who gave me a very thorough property valuation which I believe to be accurate based on comps in the area.

In about 3-4 years I will be on the market again to purchase a single family home, but I'm not sure whether to sell or rent out. Here's the analysis I've done:

Reasons to sell:

• Incredible ROI already ($200k+) just on market appreciation alone
• Market appreciation unsustainable (12+% YoY is wild, and Boston is now more expensive than pre-2008 Bubble prices)
• In a few years, further appreciation could allow me to be debt-free (this condo could likely pay for a single family home in the burbs with no debt, with all of my extra income going into a REIT or passive index fund rather than another property)

Reasons to keep and rent out indefinitely (20+ years):

• If I put it on the market right today, based on confident, conservative comps for rent, as well as my real-world expenses that I know would stay consistent (i.e. I know my mortgage, HOA, repairs, and 15 years of cap-ex is already built into our HOA since I am the treasurer) I could get a Cash-on-Cash ROI of 7.7% even with having a property manager. The S&P 500 did 6.9% in the last 10 years, so it's a wiser play assuming rents don't go down, which they haven't in Boston for a long time (excluding luxury and ultra-luxury condos, which there are too many of right now, and my place is not a luxury condo). Additionally, if rents go up 5-10% like they have been for the last 5 years, that CROI% only increases with every passing year!
• Aside from a sustainable, above-average CROI, the appreciation is still remarkable, and has already appreciated enough in 2.5 years to combat any market corrections. For example, the market corrected 38.5% in 2008 on average. My property has already appreciated 29%. Assuming we hit another bubble of similar magnitude, I'm likely to lose little to nothing, even in the wake of a correction and that it never corrects back (which seems supremely unlikely in such an urban hub like Boston). And if the market corrects and then recovers, which may happen multiple times if I decide to keep this over the course of the next few decades, it will still likely net in appreciation due to the market I've invested in.

My gut is telling my that a buy-and-hold strategy for my condo is the right move. I will still have enough money to purchase a second property as my primary residence in 3-4 years, but I do have some paranoia about the solvency of this unsustainable rocketship that is the Boston real estate market appreciation. Thoughts? This is my first property so I am curious to know if there are any flaws in my analysis or logic.

Own a condo in South Boston, looking to turn it into a rental when I move out and find my own single-family home. Just trying to learn as much as I can now before I start renting, picking up a few books (Millionaire Investors by Gary Keller and the sort) and just trying to read as much as I can.

One question I would love help on: 555/37. I've owned my property for 2 years at around 4.06% 30 yr fixed + PMI (tracks T-bills, a bit above 4.66%). Now I'm seeing rates as low as 3.46% fixed for 30 yrs, and given that my property has appreciated more than 20% in 2 years, I would imagine if I refinanced, I could effectively drop my PMI altogether, and because of the lower interest rate, pay less per month. The only problem is, I don't really know where to begin. Do I go email my old loan officer and ask for a refinance. Do I shop around online (which places are reputable?), or do I go with a local bank? I already know what my break-even would need to be, but obviously I need to know what the closing costs would be all over again, but I'm pretty sure if I'm dropping over 50 basis points, I can't imagine this would be a losing situation. Any ideas or suggestions?