Investment Info:
Condo buy & hold investment.
Purchase price: $291,000
Cash invested: $12,000
I always knew what I would do with this property. It isn't big enough for raising a family, but it would be ideal to someday work as a rental in an area with exceptional rental value. Dorchester was a long-standing area most folks Downtown Boston never ventured into. It was viewed as dangerous and unattractive. But it has what those closer to downtown dream about...actual diversity - in people and food, bigger spaces for outdoor dining without the huge prices, and homes/condos with actual grass back yards, yet only 20-30 minutes on the red line from downtown!
Boston was developing so rapidly that everyone was getting quickly priced out of the once neglected (now extremely trendy) South Boston area, and pushing buyers and renters into the even farther south areas of Dorchester and Quincy. I knew I needed to pounce while the reputation for moving there was still seen as risky by many.
But I wasn't having any luck beating out the cash offers. At the time, every property was selling in days after listing, with dozens of offers, and for well over asking. Then, a friend of mine introduced me to a couple that needed to move out of Dorchester for work an hour north of the city. I did something crazy. I went over to their house, met them, and told them without any real inspection that I would buy their home guaranteed ASAP - and do it all FSBO without a buyer agent - and for full price - to help them save on all the closing costs. We shook hands right there on the spot and I moved into the house 3 months later.
During my 5 years living there and before moving to Nashville, I personally built a retaining wall it frame-out, and level the once downward sloping front yard. Also, Ipainted every wall, did a custom closet re-org in the guest bedroom, updated with new lighting and fixtures, knocked a part of the bedroom wall out to extend the master closet (and added addition slider door storage space above the closet), saved a dilapidated pergola, and did a bunch of stone work and landscaping to create a backyard oasis.
In the now 7 years I've owned it, the home has increased in equity from original price by ~$150k. We have used the equity for cash-out refi twice! Once to buy our live-in home here in Nashville, and again to fund the down payment on our first investment LTR (also listed here in BP).
We started renting the condo in 2018 and have great tenants who pay $2,300 a month, while also tackling all the mowing and leaf cleanup spring/fall. After twice refi, it is still giving positive cash flow of $200/mo.
What made you interested in investing in this type of deal?
South of Boston was turning fast. I knew that if I could find a condo that just needed a little lipstick, and that was within a 10 minute walk to the subway, that the place would always be a good rental or perhaps and STR someday.
How did you find this deal and how did you negotiate it?
An intro from a friend to a motivated buyer. I realized I needed to sweeten the pot. I offered to purchase without a buyer agent and have them manage as a FSBO. And I told them that I would move in at whatever pace they needed, so they didn't feel any pressure to find their new home.
How did you finance this deal?
Traditional 20% down
How did you add value to the deal?
Paint, increased closet sizes, added major curb appeal with wood retaining wall and landscaping, new fixtures and lighting throughout.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Compass property management has been really affordable and responsive.
