All Forum Posts by: Brian J Allen

Amen Phil!  lots of good info

There are only 51 multis for sale in Worcester right now. Most of them are 2 families.  This particular property you discuss is one of the lower priced 3's for sale, and as you know it is a short sale.  The asking price of $272k is the approved price.  It is possible that you can get it for less but it is unlikely.  There would be a line out the door at $250k.  This would probably sell at The $272k if it did not require a cash buyer and close in 10 days.  That prices is likely close to market price.  I hope that helps.

B

Cameron,

Best of luck to you.  It is good to run the numbers, but the most important thing is to know the location you are looking at and what sales prices and rents the neighborhood can support.

• The price for this place is $272k and that is the short sale price, i have spoken to the agent and that is the best they can do.
• Rents are likely between $1200-$1300 per floor, no real need to improve the units as the neighborhood is unlikely to support higher rents at this time.  There are 2 BR units within 10 houses away that rent for $600-700
• This property is also in a flood zone, it is in the firm remarks so $2500 for flood insurance, not only that but your basement is stressed from the various floods over the years
• probably $2200 for insurance if you live there, and higher if you don't
• 2017 Taxes are $3701, 2018 will be higher as 3 families assessed values in Worcester went up 9% on average
• keep in mind that when this place is "fixed up" the market value will be about $310k as there are 4500 of these in the city and this is on a 3810 SF lot in a RG5 Zone which requires 5000 SF so it will be hard to ReFi out of whatever hard money you use.

Let me know if you want a tour of Worcester before you spend too much time running numbers.

i would call a local Worcester bank and chat,  DCU, MCU, Millbury Savings bank, Bay State Bank,  all carry portfolio loans and can do what they want and not have to worry if Fannie or Freddie will back the loan

Amen to @lisakatternhorn . Worcester rentals have destroyed a lot of outsiders.  You need to know street by street what you are investing in.  Sometimes the "blue chip" stocks work better long run then the high flyers.  You can make $1200 on a 3BR in Worcester in almost any neighborhood as that is the going rate, but you can make $1500 in better neighborhoods and not worry about getting your rents.  Many of the landlords in Worcester go for Section 8 rents as they are more stable, but then you are subject to inspectors determining if your house qualifies for their programs.  When you look at places for sale you will often see (below market rents) but those tenants likely have been there for a while and pay their rent and the current landlords are only selling since the projected rents are higher then actual rents.  Let me know if you want an insiders tour of Worcester 3 Deckers.

@ernest partin PM me and we can get together.  i agree with the others on this thread as well, it is good to have a goal and 1000 units works well, you are looking at $80k-150k per unit in worcester, maybe you can get smaller ones and improve them but often that takes more cash then buying ones that are generating income from the jump

@Earnest Partin Worcester is a great market with tons of rentals.  With the prices for auto insurance going up, and buses in Worcester most of the rentals are in worcester.  Worcester has 5 distinct rental markets,  a. High end in downtown,  b. Distinct college rentals, HC/WPI/Becker/Clark/Mass College of Pharmacy, c. East Side for people who work in Shrewsbury/Marlboro/Hudson, d. Working class worcester folks, e. Section 8 subsidized rentals.  These are spread out in different sections of the city and have different price points.  Let me know if you want a tour.

there are still lots of buyers for particular neighborhoods in Worcester, but as you know when the prices go down, buyers will trade up to those better neighborhoods.  if you are in a 1 off neighborhood your prices are trending down more quickly . 

You mention that you are from worcester.  Keep in mind that worcester has 35 elementary schools and the value of the house is greatly impacted by that.  if you went from one of the 4 school(based on High schools) quadrants to another you would not have a reliable comp.  make sure that you use comps from the same elementary school district.  another big issue in worcester is traffic, you need to know the traffic patterns and how a prospective buyer would get to and from work.  there are multiple roads which restrict traffic in the AM hours and do not allow left turns etc.  make sure that you are aware of all of that.  the surrounding towns to worcester are more homogeneous so that is not as big an issue, except if you are talking about Holden and the towns West of worcester which traffic makes a huge difference in where people want to live.  i hope this helps.

sure PM me, that works, the Mass housing has PMI, but the key is that you can appraise out of PMI, with FHA you need to Refi to get rid of PMI, also PMI is higher for the FHA loan