All Forum Posts by: Brian J Allen

Rents in Worcester keep going up.  That is what is driving the home prices.  People don't have to go to work every day, so they are moving further from job centers like Waltham, Framingham/Natick,  Marlboro/Hudson,  Lawrence/Lowell.  These people flock to Worcester because it is a small vibrant city.  Everything sells right away because people want the conveniences and location that Worcester provides.  Don't shy away from a property due to low current tenant rents.  They will go up.  Buy the neighborhood/lot/condition.  A good agent will walk you through the cost benefit of that decision.

Julie, Wow that is a saga.  You appear to have a lot of things you want to avoid.  But i agree you need to determine what you want so you can focus in on that.  I also agree with you there are great neighborhoods in Worcester and you can do well there.  You need to spend time determining who will live in certain areas due to location, traffic, proximity to shopping/jobs and if parking is important to the potential tenant.  That is why it is important to have a local agent that specializes in rental properties, so you are able to ask them these questions and they can help you tailor your searches.  In Worcester I go out with a buyer group on weekends to show houses, and explain traffic patterns.  It is amazing how much of a difference this makes to create an understanding of the city and its neighborhoods.

Understood, that is why I always refer out of my market so I can focus and provide the best service possible.

Much better to buy vacant and pick your tenants then get stuck with the tenants that come with the house.  Second to location is the tenants.  As mentioned above, the banks will use projected rents for the loan as long as the vacancy rate of the area is low.

Jason your numbers are correct on about 8k multis in Worcester alone.  I have been in 1300 of them in the last 3 years and i figure 2500 in my lifetime, and there are just more and more coming.  But keep in mind that only 3000 of them are on flat lots.  Location is KING and in Worcester, knowing the city and the neighborhoods can lead to a win over time or serious losses.  In the 20 years that i have done this, there have been ups and downs, and certain areas over and over again have all the foreclosure activity, and others continue to appreciate.  MAKE SURE IF YOU INTEND TO BUY A MULTI IN WORCESTER, YOU WORK WITH SOMEONE WHO REALLY FOCUSES ON MULTIS IN WORCESTER. 

So true Andrew, There is so much money chasing Worcester right now, since rents have jumped so much over the last 3 years. This is depressing the CAP rates from 10% 3 years ago to about 6% now. But also keep in mind, Location and Quality are the big drivers of RENTS and QUALITY of TENANTS. If you are in poor access locations or you have lame/tired units, you will never get good tenants who will stay.

it is typical not to see the units prior to making an offer.  But your offer should be subject to seeing all the units.  Honestly there are buyers who are willing to buy without even seeing any units.  I am not one of them.  Most of the money is in the basement.  I have put in offers on buildings with only seeing the outside and the basement, and they usually work out.  In a Worcester 3 decker the units can be terrible and you can overcome that.  If the outside and the basement are terrible, it is hard to overcome that.  Take the pricing this way.  Figure you have a $400k 3 decker.  These are the things you can price from the outside and the basement.  Roof $15k, Siding $25k , Windows $15k, Doors $10k, steps/decks $30k now in the basement. Heating systems $30k, Electrical $30k, just the cast iron soil stack $10k. THAT is $165k of stuff that can be done or partly done.  you can redo a whole unit for $40k and make it wonderful.  Let me know if you want me to show you the difference in Worcester. Im out every weekend

You can get a 5-7 CAP Rate on decent places in Worcester, you can stretch to almost a 10 on Properties that need a lot of work

Thanks for the kind words guys. There is a lot of off market small multi in Worcester, honestly there is a lot more for sale OFF MARKET than on the MLS. Currently there are 27 Multis in Worcester on MLS. We work with property owners who individually own more properties than that. Keep in mind that OFF MARKET DOES NOT MEAN A DISCOUNT. Do not confuse these things. Simply put you can have a conversation on price instead of bidding against yourself. That is what off-market does for you.

saidah you should look for financing and a realtor in parallel.  both are easy to do, but take time to find the right fit of skills and personality.