All Forum Posts by: Brian J Allen

It will be super hard to buy a cash flowing 3 family in Worcester within 45 minutes to Sudbury.  This limits you to the East side of Worcester and there isn't much inventory.  Currently there are 77 multi listings in Worcester and very few, 13 under $400k, and only 4 of them are 3 families.  It is hard even under $450k but you have a shot if you are willing to do work.  The best of these is 30 Esther St, which has NO PARKING, and steps to the first floor for $400k.  at $450k things change a bit and at $500k things change dramatically.  Keep in mind that the cost of borrowing $100k more is in the neighborhood of $500/month and your neighborhoods, parking and size of the property and building change as well which changes the $$$$ you can make.

I agree with Jonathan about using the WE.  There are always people behind the front man.  You can be accomodating and when you have issues, always say I will have to check with the owners and get back to you.  This gives you time and them time to step back from anything contentious and you can delay giving them a response.  For example they say their fridge is having issues.  You can say i will check with the owners and get back to you about fixing or replacing it.

Congrats again.  Good location, solid property.  Good luck with the adventure

Thanks for the shout out!  Perhaps you can share some of the difficulties you encountered and the value of having a Buyer Agent representing you!  Congratulations

There are a lot of deals all over New England.  But the most important thing is to find something that works for you.  Keep in mind you are likely looking for both CASH FLOW and APPRECIATION.  Some markets offer one or the other, few offer both.  Over time Worcester, MA has had a solid mix for those willing to wait to buy appropriately and hold long enough.  Keep in mind that management eats into a lot of your income.  you could pay $225/month for management of a 3 decker which is $2700/yr.    If you find something close to where you live and reduce that management fee you can make more money.  

another trick you can do to get rid of humidity is to get a hybrid electric hot water heater that will work as a dehumidifier.

. You can also use a normal dehumidifier and keep it on constantly and draining into the whole house P trap, or use an ejector pump like on your FHA heating system to pump it outdoors

It is not necessarily the town/city that gives you the best investment return, but how you go about the process. You can explore cities that have different levels of cash on cash return, or appreciation but these are linked to risk. The best way to mitigate risk is to work with people who you trust in the markets you are looking for. Find yourself an agent who works with investors and knows the questions you are going to ask! I work Worcester, but if I were to invest somewhere else I would rely on someone with local knowledge. You should explore a couple areas in MA and see if that is where you want to put your money, then find the right agents to help you make things work. Some of the best CAP Rate locations in MA are, Springfield, Holyoke, Worcester, Fitchburg, Lawrence/Lowell, Southbridge, Brockton, Fall River, New Bedford. These give you the highest return on your investments, but they come with Risk. There are other markets like Boston/Cambridge/Somerville which give extremely low CAP rates, but the investments appreciate faster as they are tied to demand for housing not tied to the rents that the properties command. In the HIGH CAP RATE Cities, the values of the properties are typically more dependent on the rents, then any other factor.

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $294,000
Cash invested: $75,000

Bought for $294k, appraised at $350k on Day 1, will hold, raise rents then sell to one of my children to recoup my cash.

What made you interested in investing in this type of deal?

I picked it up when i was the agent for a 12 unit building

How did you find this deal and how did you negotiate it?

It was a throw in I needed to buy to make the 12 unit purchase happen

How did you finance this deal?

conventional small bank, portfolio loan

How did you add value to the deal?

raising the rents

Lessons learned? Challenges?

Make sure you confirm current rents

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

yes, ME

Sam,

if you are doing worcester, MA then refinish the floors or vinyl plank.  You should be able to refinish hardwoods for about $3/SF and plank for $4/SF.  PAINT everything neutral, tan or grey.  Make sure the BATHROOM is nice and clean, nothing fancy, just home depot quality clean and new.  replacing the tub is probably the best thing you can do, and get a big vanity with a cabinet mirror so people can put their stuff.  Kitchen you can do granite or solid, but make sure the cabinets are clean even if you just paint them white.  If you want to spend $, then maybe a dishwasher, and W/D in the unit always gets you a better tenant.

@Tony Alvine. I typically do not recommend home inspectors. That being said make sure if you hire in inspector they have been doing it for a while so they know where to look. Also if you know something is wrong. Get someone in that trade as well. Think of thr inspector as a general practitioner and you may want a surgeon