All Forum Posts by: Brian J Allen

there are always opportunities. I am working with a wholesaler/flipper to create enough equity in a property to gift the down payment to the buyer and still have the wholesaler/owner happy in the end.  We will also do a closing cost credit so this may be a no down payment scenario in Worcester, MA where inventory is tight.  We are saving 2% for the seller on commission and reducing his hold time by 45 days by purchasing before the flip is complete.  If there is a will there is a way.

There are always good properties to purchase in any market.  The key is being comfortable with your target type of property. In Worcester you can get good properties with upside that will do well in any market.  You can also buy properties that look good in this UP market, and do not fare well in times of higher vacancy.  The key is to find an agent that really knows multifamily as most do not have enough experience.  You need to have someone who can explain to you the economics of the city as well as the specific neighborhoods.  You need to know transportation patterns, topography, and school districts.  You also need to know the quality of the property, not just the rents.  If your analysis of properties is just based on current rental income I think you leave yourself open to lots of pain and suffering.  Make sure you work with people who are committed to just helping investors like yourself, not just agents who are now dabbling in multi family because the prices are up and buyers are there.  Make sure you know who your target tenant is and where they intend to work.  Best of luck in whatever city you pick.

These 0 lot line properties in Worcester with a garage rent at about $2k a month.  I don't think changing the bathroom makes a big deal in rent.  I have clients who have similar places. 3 BR 1.5B and 2 BR 2 BA and they rent about the same, just different people.  There are plenty of people looking for these.  you might be able to get $2200/month from the right tenant.

Worcester has a small community of agents who have been doing this for a long time, along with a small community of investors. They typically do everything off the MLS. It is great to bid up the price, but almost every offer is contingent on appraisal so even if someone offers $450k for a house that is worth $375k, it will still sell for $375k. Why go through all the trouble when everyone knows the final price. Also, most MLS offers have inspections and other contingencies. The good stuff sells for CASH with local lawyers on both sides of the transactions. If you watch the MLS you will see properties that go under agreement then back on a month later. This is typically related to either an inspection or an appraisal issue. Off market those are not issues for the most part.

As for delivering something vacant, that would be great, and I am seeing up to a 20% premium for vacant properties.  In the past people wanted tenants, now everyone wants the place vacant which drives the price.  There is a lot of money out there to help tenants pay back rent through various City,state and federal programs.  The bigger issue is not people who are late in payment, but people who have been paying super low rents for years.  There was a property this weekend, on the market for $400k with $2,350 a month in rent, $1200, $750,$550. Each unit should have been at $1500/month. How can you get someone paying $550/month to ever get to even $1300?  it is not going to happen.

Best thing to do is try to get properties at a discount due to low rents, and wait them out. That is what the seasoned investors do. Don't get caught up in CAP rates, but focus on the LOCATION and QUALITY of the property and you will win long term.

I hope this helps.

Andrew, The market for College Rentals in Worcester is Fierce and ultra competitive. Almost everything trades off market, but there are opportunities. Most deals are done sight unseen and there are few players. A lot has to do with 1031 action. If someone has something they can buy, they then become willing to let something go. The biggest problem with worcester is that there are SO FEW LARGE MULTIS in WORCESTER, so there is little to trade up to. Competition for the Small Multis is big, since there is SOO MUCH MONEY chasing real estate as to try to hedge against inflation. Anyone with $100k can buy a 3 decker and have the leveraged appreciation they want. The key in Worcester is to know exactly where and what you are buying. Most of this activity takes place off the MLS, and by agents. These are not pocket listings or something fishy, but sellers simply don't want their tenants to know they are selling. I have a seller who was able to sell(we close this week), and only showed 1 unit and the basement, and will not let the buyers meet the tenants until closing!!! The market is odd, but there are solutions. The college market is even more complicated as most sellers want CASH commitments, for over 3 months so they can go shopping for something better with YOUR CASH. You can't make this stuff up. So basically in order to buy something, you have to wait until the seller has SOMETHING BETTER THAN WHAT THEY ARE SELLING YOU!! Fun Stuff

The key is to find stuff where you can finance them after you have fixed them up.  Are you going to be using cash or financing to do the purchases?

Congrats Kyle on beginning your journey. There is a lot out here in Worcester that fits the bill for you. The key is to educate yourself to the neighborhoods and the market. I figure that takes about 3 months until you have a good feel for the quality you will see and what that commands in terms of pricing. I go out on Saturdays with a socially distanced group to get folks educated. Shoot me a PM if you are interested. Most of the good stuff trades off the MLS, so once you know what you are looking for, and have an understanding on price you are ready to jump when something comes up.

I am also a fan of the older houses.  the locations are typically better since they got to choose the locations first.  It is important in Worcester, and in the surrounding towns to really know your location.  Remember. YOU CANT MOVE THE HOUSE, YOU CANT MAKE IT BIGGER, BUT YOU CAN MAKE IT BETTER.  Make sure the lot and the location justify your purchase.  I would be glad to help you on specifics if you like.

As a buyers agent in Worcester, i feel for the other agent. However, there is only so much the market will bear in terms of investment. As you rightly state, rents is $1200 in some place and $900 in another. And it can swing even more than that around WPI where the rents might be $1800 and around the corner $1200 for the same 3 BR unit. Keep in mind a couple of things. Who is managing the place? You can write off the expense of visiting your rental property, so maybe a trip to TN might be fun a couple times a year. Also, you have appreciation. Worcester multi family appreciation has been crazy over the last 3 years for a number of reasons and the major one is rental appreciation. Will you get rental appreciation in TN? Worcester rents still have a ways to go before they catch up to where they should be, especially if you only have to drive to Boston 2X a week off hours. Why would you live in Framingham if that is the case and pay 75% more than Worcester. Also, keep in mind that a lot of deals in Worcester are done before they hit the MLS. If your agent is tied in to the Worcester Wholesalers, and the agents that do the bulk of the transactions then you are good. If your agent doesn't work at an office that does at least 20 Multis a year, you will have difficulty finding anything. There are under 5 offices that do more than 50% of the multifamily volume, and that is what you can see on MLS. I bet if you counted what they did off MLS, they would be closer to 60% of the total volume of sales. Best of Luck. Worcester has great opportunities if you know where to look for them!

keep in mind, there are various investment profiles depending on the house. if you purchase something that is in need of repair, in the short run you may show better cash flow, but in the long run, perhaps not so much. you can get a 3 plex in Worcester with a vacant first floor for yourself for $375k and market rents of $1200 for each of the other floors. and you can buy one for $450k which has market rents of $1500 per floor, in order to really see where you are at, you need to be out in the market actively working to see what is there. There are gems that come up, you just need to be educated and ready to pounce when it hits your investment objectives. Also keep in mind that in a multiple offer situation the seller may choose to take a 25% down offer over yours. For that reason it is best to try to get something prior to it going on MLS.