All Forum Posts by: Andrew Freed

@Chelsea Owusu - Water heaters came up as old during inspection (but not broken(, however when you're facing multiple cash offers above asking, it would hurt your chances of getting the property is you haggle on such minor items. The gas leak was missed but was super minor, only cost $50 to fix.

Yes, I've owned a condo for about 5 years and revitalized a condo association in disarray. The HOA is the major line item that will make or break your deal. Investing in a condo unit is very much putting your trust in other individuals. You want to be wary of the following issues with HOA fees:

1. Association -  Having the right people leading the association is critical to your units success. If they are not fiscally responsible and don't put the proper money aside / look for cost saving measures, you could be hit with a "special assessment" for a large capital project. In my particular case (I'm actually the one that enacted this to bring our finances into a good situation), I had to pay $3,000 out of pocket and there were 12 other units. Good management of your condo association can make or break the deal.

2. HOA - This is lost money that you will never see again. If a unit has a super high HOA, run the other way. What I've seen as responsible based on keeping the property in good condition are between $150-$300 per unit. I've seen HOA's charge as much as $600.

3. HOA - Not all HOAs are created equal. Some cover more items than others. For instance, my HOA only covers water, overhead, and common area electricity. Some other HOA's cover more or less.

In my opinion, condos are probably the hardest to cash flow b/c you are putting the trust of maintenance of the property in other owners hands, essentially giving away some aspects of control on the deal. And as we all know, capital expenditures / repairs can turn a great deal into a bad one really quickly. 

Thank you for the feedback everyone, it is truly appreciated! 

@Scott Winter - I am currently looking for a buy and hold strategy on a SFH. I would like to hire a property manager and utilize a rent by the room model since rental demand in Austin TX is through the roof. I do truly believe in the market and the appreciation likelihood however would like to enact a strategy where I can still cash flow (or at least break even) while the market appreciates.

Additionally, my father retired there (I am currently located in Boston MA) hence it would be nice to have options in case I want to be closer to him. 

Thank you everyone for the great insights! Super tough market but I'm hoping some of these tactics will give me an edge.

@Allen Wu - I was considering the San Antonio market as a backup option. How do the cash flow opportunities look there? Any properties able to meet the 1% rule? 

I am about to start putting in offers in a super competitive market, Austin TX. Does anyone have any real life examples/tips of how I can make my offer stand out? I most likely will be competing against dozens of offers. 

@Tom Wagner - Welcome! MA is definitely a highly priced market, but with that comes a higher appreciation likelihood so there's always a give and take. Feel free to reach out if you have any market related questions on multis. Happy to provide guidance in anyway I can. 

@Chelsea Owusu - It's going well, have all of my units rented out (I also have a condo in Boston) but a ton of unexpected costs upfront. I feel like whenever you get any new investment, there is always a saturation period where a ton of costs occur up in the beginning. Water heater broke, had a gas leak, but all in all happy with the decision.

Regarding off market or for sale by owners, the only way you would be able to find deals like this is if you have solid financing, either a hard money loan or cash. If you are utilizing conventional loans, it would be very unlikely that these opportunities will be available to you. They tend to like fast closings.

Additionally, it is a super competitive market so off market is a very hard find these days in the MA market. If you are restricted by financing and still want to seek these opportunities, the only way you would have access to such deals is putting in "sweat equity" meaning direct mailing campaigns, driving for dollars, etc. If you do not plan on going that route, the MLS is probably the best bet for you.

@Chelsea Owusu - I'm in the process of house hacking in Worcester currently. Closed on my 3 family in December 2020 using a FHA loan 3.5% down. I will mention that if you do make offers with FHA financing, you most likely will have to go above asking. Super competitive market and high price is the only thing that will make a fha loan stand out among the many full cash offers. But with the low out of pocket costs, solid cash on cash returns and a long time horizon in mind, it could make total sense. I am happy to provide insight into the Worcester market. Feel free to reach out.

@Dan Miklosz - Congrats on the purchase. I use RentRedi software to collect rent (it is a very minimal cost per year) and stessa to track my expenses (this is a free software). I recommend finding a great CPA that specializes in real estate investments. It's better to have your team established early so you can expand your portfolio and not have to worry to much about your infrastructure.

In addition, I'd recommend trying to identify some good contractors that you have available in case you need any servicing done, e.g. a good plumber, electrician, handyman.

Lastly, I would advise you to create a separate gmail email / google drive for your real estate portfolio as well as set up a landlord number (this is a completely free service) on google voice. You can utilize google voice to forward to other individuals in case you are on vacation as well as maintain some of your privacy by not giving out your direct number.

I hope these tips help!

@Matthew Drouin - Inspirational story! I love how you tackled every unknown with a go-getter and get it done attitude. Great work and I hope to see a lot more success stories like this from you in the future. 

I am renting out my 1 bedroom condo in Boston and need a good handyman on the ground that can help with basic fixes. I am currently living about an hour away so I am trying to avoid the commute for the small stuff. Have any good contacts fellow investors?