All Forum Posts by: Adam Sankowski

Hey @Brian Crimmins I own a 2 family in Somerville, got lucky with getting in before things got super crazy.  But anyways, here are my Boston MF tips... first are you local yet?  I think that you're going to have to travel those neighborhoods yourself to really get a sense of what a good mix of crime/ gentrification is.  Roxbury is expensive yet Roxbury center is weirdly super sketchy and a mess. I work in Dorchester and bike to and from work and always go out of my way to check out new neighborhoods and look at MF's for sale just for fun.  There are def. some invisible lines between sketchy and safe family areas and weird pockets of amazing neighborhoods that you just have to kinda discover.  You might have to start looking yourself for a while to really find what you're looking for. 

I would check out Mattapan too, especially anything along the Milton line.  Hyde park and Roslindale MF's are rarer but are usually less $ than JP. 

I know that its farther away from your school but Everett is ok and I think Malden is going to be a solid area in the long term. 

I haven't used a VA loan (thank you for your service!) but I know when we bought in Somerville 5 years ago anything less than 20% wasn't even really being looked at and we had 20% and were beat out by all cash offers all the time :(

The one thing I'll say that I don't think is unique to Boston but things def. slow WAY down in the winter and I'll def. see properties that look ok sitting for a longer time. I think using a VA might take you a while to find something but if you time your search with the colder months and maybe are flexible and target properties that qualify but have been sitting on the MLS for a bit you can make the VA work. Things def. sit in Dorchester and Mattapan longer than they do in Somerville so its good your looking in those areas.

As far as gentrification my feelings about Boston in general is that at some point it will all be gentrified to some degree?  Boston is growing fast and its so small that there just isn't anywhere for it to go, which is why you see sketchy places still selling for top dollar.  You have the ocean to the east, Newton is already million dollar homes to the west, Milton is million dollar homes to the south, Cambridge is north... my point being that the city has no where to grow except upwards and taking over all of the sketchy areas.  This isn't Indianapolis (where I also invest) or las Vegas or Phoenix where you can just endlessly keep expanding the city limits.  My point being that anywhere you buy in Boston is going to be worth more in a few years, no matter where it is! 

Here's my tip to look out for with MF's in Boston.  Since there isn't any space... if you do have a choice of properties, really consider the lot size for the future.  We had no idea what we were buying in Somerville or what size the lot was.  I had no idea about anything at the time ha!  But... here we are 5 years later and it looks like Somerville is about to change its building codes and we are going to be able to build a single family home behind our current 2 family.  Considering new SFH's in Somerville are starting around 1.4 million this is a pretty nice accident.  My point being that if you can, and have a choice of two properties, consider the long play of going for the one with the larger lot.  As the city and the area grows, building codes will change and who knows what the future holds but the bigger the lot the more future possibilities.  Good luck!  Update with how it goes! 

Looking for a lender referral in the Capitol District!  I'm doing some research for my mom who is looking to downsize from her current house.  She's currently in Saratoga county and looking to stay close to there (maybe moving to Glenville- Schenectady area).  Inventory for what we are looking for is pretty scare... something single story, smaller (less than 1500 sq. ft)... no condos really are around that are decent, and anything really nice is pretty much a new build situation. 

So me being a real estate investor from Boston I'm thinking I should help her build/ rehab a dream home since nothing really exists... and while we are at it BRRR (minus the repeat, this is a one time primary residence).

The catch is that she's retired, so living on a teacher pension and social security.  Can you even get a loan with that?  She's got great credit, current place is paid off etc.  So looking for a creative/ solid lender who can work with someone on a fixed income to refi a place after rehab.  Any suggestions for who you use who I could talk to for more info?  Thanks!!!! 

@Alex Johnson Glad it was helpful! The FHA loan thing was really specific to Somerville at its a "hot" market these days. I think if you set your favorite RE app to a higher days on market setting, and only look for the properties that have been sitting there for bit (probably with somekind of issue) you'll have a much better chance of finding one that would accept an FHA offer. Keep in mind though the other trick is that the property has to be in decent condition to use an FHA, I don't believe you can use it on a fixer upper. Maybe you could look into a rehab loan- like a 203K or Homestyle for that. I'm not an expert on any of these things but just mentioning some things that I would be researching if I was in your position.

There was also a BP podcast a while ago, with a Boston investor, who gave the excellent advice (sorry I'm forgetting who it was) that you look at a MBTA map and figure out where all of the commuter rail stops are and target properties that are a bit farther out but within walking distance of a stop. Not a bad idea either... good luck! Stay with it and just keep your eye on things. Even with how "hot" everyone says the market is I'll notice random months or several months, especially in the winter, where a good deal pops up and just sits on the market for a while. Part of the key is just keeping an eye on the entire greater Boston market for a while so that you know when you've found a good time to buy or deal. Def. doesn't hurt to look for investor friendly agents on here either. And yes, also an LLC probably won't work for any type of financing. If you're worried about asset protection just load up on umbrella liability insurance!

@Alex Johnson Hey great idea on the house hack.  I did the same thing with a two family back in 2013 in Union square and without doubt the best decision of my life.  But, a few things to keep in mind that might add a few extra challenges...

@Dan K. brings up an excellent point with the purchase limits. I don't know what they are for FHA but 881K sounds about right. Unfortunately whoever makes these limits for the government clear don't live in an expensive coastal city.

Here's the other problem that you'll run into quickly with an FHA, especially in a "hot" market like Somerville. No one will accept them. We were going to use one when we bought but every reasonably priced property in Somerville is going to have multiple offers. Especially since a developer can turn a 900K two family into 2 - 1 million dollar condos. So you're making offers with an FHA and others are offering cash. You'll lose everytime which is what happened to us. We eventually had to go back and beg borrow and steal to get a larger downpayment together.

Also in general you'll run into developers trying to scope up any Multi family in Somerville.  You can try for it but I really like Medford and Malden center.  Everett is a good option too and there I'd focus on this small little neighborhood that's close to the casino and right near nightshift brewing.  Google night shift and look at that area.  Malden center is gonna be big in a few years and a lot of people are already moving there and Malden schools aren't bad where as Revere or Everett still have a ways to go. 

Here is one little tip that might give you the edge in Somerville and might even make a single family just as good as a house hack.  Here is the link to the Somerville proposed zoning changes: https://www.somervillezoning.com/

If you read through everything carefully it basically looks like they are proposing that if you have a large enough lot size or enough frontage you can build an "accessory dwelling" behind your house. This means that you might be able to build a single family behind another single family in the future. You used to be able to do this and you can see these types of houses all over Somerville but they outlawed them at some point... Considering that there is barely a SFH in Somerville for under 1.2 million and new construction is maybe $250 a square foot in the city, that's almost a 600K new build profit... Now they've been trying to pass this for years but... things are moving. This info might help you in finding something that might have real future potential. Medford and Malden might have their own versions of this.

Also, Airbnb is BIG money in Somerville and although they are very lax on their enforcement of the code, technically you can't Airbnb a stand alone unit but you can Airbnb a room in your house, making a SFH Airbnb-able and a 2 family less so FYI. You kinda need some creative options to compete against developers there. Good luck!

Also, just a prediction but in ten years I think we are all going to be talking about "remember the time when Mattapan was sketchy".  That's the most underpriced area of the city if you can't find numbers that work in Somerville/ Malden/ Medford. 

@Teho Kim looks like that’s south of sacred heart/ old south side. But that is it’s own little pocket of a neighborhood so you can’t really compare it to old SouthSide. Your Realor could have a property in old SouthSide, which is two minutes away, and it’s not the same thing. 

I get the sense that you haven’t visited Indy yourself and walked some of these neighborhoods? I’m not saying you have to fly to Indy to check out every house, I certainly don’t, but you need to go once and check out the neighborhoods that your looking at, at least once. That’s required. Seems crazy to me to buy something where you have no way to actually confirm what your realtor is saying. At least for the first one, get on a plane and see what you think of that neighborhood yourself! Just my 2 cents. Then in the future you can feel confident about any other purchases there.

I’m gonna suggest the opposite in here and say hold it?!? A beautiful property in a great location is priceless and “holding out for the long haul” is gonna be like 5 years when market rents have gone up and up every year. 

First off it looks beautiful, nice job! 

I’m OCD about my house hack too but could care less about the properties I don’t live in, when you move out you’ll relax on that. 

You need to stop paying utilities! Someone earlier had a lot of good advice around that- that’s a must! 

If this really is a good location is Airbnb an option? That would immediately increase cash flow a ton. 

Also I suspect your rents are under market? I don’t know Minneapolis but $1,350 a piece on a 450k property seems low. I randomly googled market rents for Minn- I know, google... but it said 1450 for a 800 sq ft place. Yours looks really nice too. 

Just my thoughts but I would hold?  This seems like a long term potentially stress free rental that gets better and better every year. 

Hey @Alexandra Fisher , no offense to anyone here but yeah, you def. don't have to start with 100+ units ha.  You can find plenty of excellent PM's who would love to take on a duplex.  Especially if this might be the first of more purchases.  I LOVE Providence as a possible investment,, and have been looking there myself, but a duplex or triplex there would be more in the 200-350K range I would think, depending on how much work you would need to put into it.  If you're looking for basically a "good to go" property I think you're probably in the 350K range.  Same for anything in MA outside of Boston.  Frank who commented above would be the expert on Providence though!

If you're looking for 80-100K you're probably looking for the mid-west. There are plenty of places in the Midwest where you can find that price point but I'd avoid any areas with negative population growth (Cleveland etc). I personally started with investing in both KC and Indy and since have fallen in love with Indy and focus there now. Now, I'm sure that you'll get some advice from folks to avoid small multi-families in Indy because a lot of them are in rougher areas. To me that's advice from five years ago... I think the younger generation is cool with MF housing more than older folks. Still I see the logic/ concern in why would someone want to live in a $600 a month duplex instead of a $800 a month SFH? That class of tenant for small MF's in the mid-west might be something that you would want to avoid. It's good to remember that the midwest isn't like NYC (or Boston where I'm from) where everything is a multi-family building and living in a single family is something only for crazy wealthy folks or the suburbs. In the midwest cheaper single family houses are right close to the down town so you do have to consider the difference in your tenant base if they really can't spring the extra $200-300 a month so that they don't have to share a wall with someone else. But... I think you can mitigate that risk a bit if you buy as close as you can to downtown or the "hip" Indy areas- Bates/ Hendricks, Garfield Park, Fountain Square (you won't get in there but you can get south Fountain) for that price you'll be ok. That might be more like 120-140k though if you can stretch a bit higher.

I think the key is to go side-by-side verse anything small MF where people are living above/ below each other as that will have lots more turn over. Indy has tons of great side by side duplexes.  David Greene's book is great.  I would first focus on finding a great realtor and seems like many in "investor friendly cities" are also hooked up with PM's as well so that's an easy way to build two members of your team.  Look for a realtor that also has contractors they use.  Almost every realtor has a lender they recommend too and bam there's your team!  Regardless of where you end up make sure you visit in person for a few days.  Stay in Airbnb's right in the neighborhood that you're considering and try to live like the locals for a bit and see what you think?   That's what I did first, flew out and met a ton of realtors.  Although the main property that I looked at in person ended up falling through I met some great team members and now I feel like I can buy from afar with confidence. Ok, this is long enough, hope this helps and good luck!

Hey @Luther 

@Luther Wilson III Def sounds like you know what your talking about and I'd def. be interested in talking more about the KC sweet spot in the future.  Maybe I'll give KC another try?  Let's stay in touch.  Do you currently work at a PM or have one that you would recommend? 

There is always someone decent who is willing to work with you, even if they are difficult.  Indy will be easier because you have multiple properties so someone will be interested just cause your bringing in like 4-5 properties.  I don't know how many you have in Jacksonville.  

REI is emotional. I have really great properties with a great PM and still I had a hot water heater go out last month and a garage door issue and was like, I wanna sell! But then I ran the numbers at tax time and both houses made like 10K each in appreciation and even after repairs made a few thousand in cash flow, and the stock market freaks me out too so I guess I'm staying with real estate. But even with solid properties its a rocky ride so I can't imagine what your going through. Now, I don't want you to hold on to a bunch of stuff that isn't working but try to find the best PM you can in both markets and see what they can do. I think in your last thread on the Indy ones there was even a property manager who responded so maybe first reach out to them?

Hey @Georgie Coote I saw your Indy thread too.  Man... first off I feel for you.  I was in a similar situation at one point and reached out to and looked at Morris.  I didn't end up going with them but I could see how one could and I'm really sorry. There is a special place downstairs for someone who repeatedly does this to people.  

With that said.  I know that you just want out and to run but I wonder if you just really worked to find the best PM that you could and maybe get some section 8 people into some of the not better properties if it would make more sense for you to hold them.  I just hate to see someone sell at a lost.  

I invest in Indy as well and I've had nothing but an excellent experience... so it is very possible! You have one SFH that has been stress free right? Just model all of your future purchases after that one but see if maybe you can work to stabilize these first ? You just lose so much between closing costs.. I know that vacant properties suck but I know that there are quality PM's in Indy that can fill these. I know its easier said than done but try to hang in there but maybe work to stabilize rather than sell?