All Forum Posts by: Ethan McRae

With the new Affordable Homes Act , come Feb 2nd 2025, you can build an ADU by-right and also use the ADU as a long-term rental in Massachusetts. Said differently, you won't need a special ADU permit to create an ADU.

I'm interested in potentially purchasing a single-family home in eastern MA (Norfolk or Middlesex county), and doing this exactly. The ultimate goal would be to live more affordably with the help of rental income, and then to cash flow after moving out. However, I have some reservations about buying a house before seeing how things shake out after Feb 2nd for a few reasons: 

- Towns seem very unclear about how they will adopt this new law. Many towns don't have any ADU ordinances. The towns that do have ADU guidelines could completely change their rules. I wouldn't want to buy a house today with an ADU plan in mind only to find out that it wouldn't work once guidelines change later on.

- From what I understand, just because you can build an ADU by right doesn't mean you can build whatever structure you want. It seems like towns could dictate if you can build an attached vs detached adu for instance. I worry that towns might make the zoning requirements for ADUs so specific that it would just be too cumbersome/costly to pursue this.

- Towns could potentially challenge the law if they don't love the idea of people living in the backyard of SFHs. That would make it tough to pursue this for obvious reasons. 

Really seems like the smart move is to just hold on and wait to see what happens in early spring next year, but if anyone feels differently, I'm all ears. Is anyone planning on taking advantage of this new law? I'd love to hear about your general strategy. 

 Really appreciate this. Thanks

I'm a first-time home buyer interested in house hacking. I'm interested in getting a conventional loan and considering using a credit union. 

With rates as they currently are, I'm looking for every angle to get the lowest rate possible, and from what I understand, credit unions can offer rates slightly lower than traditional banks. 

Curious to hear about investors' experience with credit unions. Have you secured considerably lower mortgage rates with credit unions compared to traditional bank rates? How would you go about looking into credit unions? Is there an efficient way to compare APRs between credit unions?

Many thanks

@Aaron K. excellent, and yeah good tip. Many of the costs I believe are probably a little unrealistic but assuming the property can cash flow with these numbers, hopefully it can do much better once purchased 

@Aaron K. three units total- two are two bedrooms and one is one bedroom. This is an fha loan and 5 percent is the best I can do at the moment. Yes, for the first year, this will be a house hack and then I will move out after. This analysis is taking into account how the property will perform once I have moved out and filled the empty unit. 

If I could just get some feedback on this analysis/opinions on whether or not its a worthy investment, please let me know. The property is in Lynn, MA- which is close to Boston. 

I know the roi doesn't look super appealing, BUT I believe my numbers are pretty conservative. For instance, I don't believe that 15% rent will go to capx and repairs every month. That being said, if it can barely cash flow with conservative hypothetical numbers, I believe it can do well in real life. Also hopefully I can lose the PMI once enough equity is built.

Thanks!

@Kenneth Garrett just to clarify- when you say "additional bedrooms do not necessarily equate to income at the same ratio per bedroom" do you mean that if there is a difference of 600 dollars in rent between a two and three-bedroom, then there might not necessarily be a difference of 600 dollars between what a three and four-bedroom unit rents for? Like it could perhaps just be 300 dollar difference?

@Maurice Selva I see. Sounds like young families that wouldn't want to move out given financial circumstances is the sweet spot. Thanks for the tip 

@Account Closed Oof, yeah I wouldn't want random bathrooms popping up all of a sudden in my units. Thank you

@Craig Sloan Thanks of the advice Craig