All Forum Posts by: Connie H.

Thanks a lot for every reply and I read each closely. I appreciate it a lot for your time to read it.

Our current residence is a single family in natick MA. 

Hi there,

I posted here as a new member 8 month ago. Basically, we finally sold our negative cash-flow condo in south MA and at least got our loss stopped. We plan to buy a single family in a very expensive town - Wellesley in MA and sell our current residence.

My question seems dumb - should we risk to buy a 1.5-1.7M newer SF and to be bound to the mortgage forever and work our whole life to pay for it, or should we buy a SF around 1.3-1.4M which has much worse condition comparing with the above? While we could potentially save to get a multi-family for investment much sooner with the option 2?

With the first choice, we will have a 1.1M mortgage, and work very hard to pay for it. About $9000/month. If one of us loses job, we will be under a lot of pressure and even may need to sell it - or we need to sell our only investment property a multifamily in Boston to save it. Of course, you can say that WHY you need to buy it? You can live comfortably in other towns with a much less expanse on primary residence and focus on investing...That is also what we have been asking ourselves for a while. The first reason is for the public school district. The second is commute. The third is for investment purpose. Properties in Wellesley and Weston are roaring high in the past decade and sometimes makes more returns than a multi-family, and it is easier to keep its value when there is financial down-turning.

I understand that it is totally a personal choice based on the financial situation of a family, personal preference, and personal understanding and sense of risks/benefits with regarding to such choices. It is like walking in the fog and not sure what is the correct option.

Thanks so much for your input.

Hi All, thanks so much! I am so glad to hear from all these informative replies. We really appreciate it.

Yes, what you all said make sense. We plan to sell the rural condo next year when the current tenant ends her lease. It is not possible to sell it when there is a tenant in it since even vacant ones are on market for months to be sold. We hope she will be willing to move out on time...God bless. We are inexperienced landlords and hope we would not get into much difficulty in that process.

Yes, we are focusing on Medford and Somerville. Thanks for your input in Malden. We are still a little hesitant. 

Let's say, IF we have the money (this is too much a prerequisite), we spend up to $720K in a two family in Medford or Watertown now. That is the current conventional loan limit for 2 family, which is $543K, divided by 75%. That is the maximum usage of cash to get the most loan, in my eyes. I do not know other non-conventional loan means. 

For a $543K loan, we will get about cash flow even in the current renting market in Medford or Watertown. It would be better in Somerville, but even less chance to find such deals. 

In 5 years, the tenants help to pay about $50K equity in the property. These three towns - Watertown Medford and Somerville will likely see some appreciation in the coming years, slow or fast. Then it is possible that one would expect about $80-100K rise of value in the 2 family.

It is still possible to get a three family MF in Malden with the price range of $720K-$800K. The cash flow will be about $1500/month. However, I doubt Malden will see much appreciation comparing with the above three towns.

The above is all based on expectation that the economics continue to be strong.

Let's say secondly, the opposite, we may have another blow of 2008. We bought the rural condo just before the downturn started. My impression was that the property price in places closer to boston, like Brighton, Brookline etc, actually did not drop much. It just stopped growing for a while and then starts to grow crazily again. If the market crashes, I think Malden may crash faster than Medford and Watertown - Just my gut feeling.

About flipping house, yes, it is a fast way to realize the appreciation of value and may be less risky than long-term holders in some ways. However, you have to have a lot of cash to do it. You have to have the downpay of 25%, the money to pay mortgage during renovation, and the renovation money too. And you have to hold it for a year to sell. And you have to go through legal documents to convert a MF to condos. And then you have to sell it while the market is still hot - However, that is just through my narrow angle of view...haha.

Thanks for listening.

We bought a multifamily property in Watertown MA last year.  It was a good decision.

If you live in Greater Boston area and pay attention to multifamily investment, you would agree with me that 2017 has seen an average of $50-100K rise in the price of multifamilies in this area - i.e. Watertown, Medford and Somerville.  

I have two questions to ask for your kind input.

1. We have a small condo apartment in rural Boston. We had to pay about $50K of cash for it due to updating requirements forced through by its HOA a few years ago. The market price for it now is unfortunately the same as when we bought it 10 years ago, around $210K.

Should we sell it next year and claim that loss now, or should we hold it for 2-3 more years?

It is currently rent at $1300/month, but the cash flow is still negative considering the mortgage and HOA fees. We get about $6000 worth of value every year counting the principal that is paid. If we sell it, we will claim that $50K loss immediately, but we can get about $100K back and we can use it for MF investment in area closer to Boston.

2. Which one is better - To invest in two families in Medford or Watertown (Somerville has totally priced us out and we cannot afford three families anymore), or to invest in a potential 3 families in Malden? My husband thinks that Malden is traditionally considered a rundown area to live for young professionals. For the prior two towns, we probably will not have any cash flow.

Flipping house or converting multifamilies to condos are not something we can do. We both have full time jobs.

Thanks for your input. We really appreciate it.