All Forum Posts by: Christopher Quinn

Rates are usually 1 point higher than residential rates, amortization 20-25 years, term is typically 5-10 years with a balloon. 

For a commercial loan they're going to want the borrowers to have a net worth equal to the loan amount. I syndicated a deal and didn't meet that requirement so added others until we did. Some lenders may want anyone with 20%+ equity on the loan as well. A big value-add to an investor is not being on a loan, so I would speak to the lenders first and ask their requirements for who can and can't be on a loan. I was raising 500k on a deal, had one high net worth co-GP on the note to satisfy the lender and had investors contribute up to 99k for the remaining funds to stay under 20% equity and keep them off the loan. 

Hi Leo,

I was faced with a similar situation as you a few years ago. I had been living in Cambridge and wanted to continue living in the city. I looked into buying a cash-flowing multi in places like Lowell, Worcester and Brockton, places where you can get a solid cap rate and I think are ripe for organic rent growth and appreciation (though markets like Worcester have gone up quite a bit recently).

Places in Boston hold value and tend to appreciate, and the rental market is great. I also think the biggest advantage of living in a place is the ability to put down less than 20% as an owner occupant. I ended up putting down 10% on a 2 bed condo in South Boston and using my excess cash to buy a cash-flowing asset outside of the city with a 25% down commercial loan. With rates as low as they are you should be able to come close to cash flowing the condo or at least covering your carrying costs with less than 20% down if you move out, especially if you buy in a neighborhood like South Boston, Jamaica Plain, or Charlestown where you can get a 2 bed with low HOAs for under 700k. Obviously this wouldn't work in Back Bay or many parts of Cambridge. 

For cash flow you'll have to look further out than Dorchester, Revere and some of the other neighborhoods you mentioned unless you put down 30%+. Those are more ripe for condo conversions than buy and holds in my opinion. I can recommend other towns based on your target investment metrics if you'd like, cheers.

Christopher Quinn