All Forum Posts by: Jason Bee

Thanks Chris!

Hi BP,

How do you get out of a timeshare? My friend's parents have had this timeshare for probably over 15 years, the agency keeps raising the price, sometimes not provided the room they purchased and given lower quality accommodations, as well as messed with their rental dates. Is this something they can just cancel & get out of or do they need a lawyer? Any input would be appreciated, thank you. 

Hi BP Community,

I purchased a SFH a little over a year ago and have been watching my neighborhood and home values go up in the area. I bought the SF for a discounted rate and know there is probably 20%+ of equity in it already. I know everyone talks about refinancing their home to pull out their equity and buy their second home, but has anyone ever done a re-evaluation with their mortgage co? Also, do your taxes go up after the evaluation is completed? I figured if the house gets re-evaluated, I can drop the pmi, pay a lower monthly mortgage and save the extra cash for investing but also later on refinance it, and use both my equity and money I've saved to purchase my next property. Any help would be much appreciated, thank you.

Hi Bob, these are truly unprecedented times and the Massachusetts market is different from other states. I have been trying to buy a muli-fam in the Boston area for 2 years and it is crazy what people are asking for. Houses we were competing for last year we can't even compete for now. I have talked with numerous Real Estate agents and they all seem to have never faced anything like this. Follow the economists, they predict the market and are the best way to gauge our economic future. I like many others thought this was a bubble and so far have been proven wrong. There is a housing shortage in our area (NE), period. Not enough new houses being built because there is a shortage of skilled labor. The cost of lumber has gone up because more people want to do home projects which is continuing to drive up costs. So we are left with the people who already own, that supply chain has been tight for the last 2-3 years because of people's concerns with awaiting the next recession. Now with covid it made that problem more exaggerated. You have people who would sell but are worried about where they will live after because of the housing shortage so they won't sell until the market gets better. We also have a waiting baby-boomer population, ready to retire but can't go anywhere because there are no homes to buy in the retirement communities like in Florida. All of this made our New England housing market crazy. I would focus on our area of New England, one of the most sought after areas in the US. Mass bounced back quicker than most of the states in the last recession. We are a different animal than the rest of the country, lots of people are moving & want to live here. Our market is different. If you are going to buy in Mass, I would use it a long-term investment but I'm not into flipping and short investments. We may have this problem for years and inflation will happen, just a matter of when. If you have the finances to do a quick flip and do your math out, allowing for decrease in value and if you feel comfortable, whether you have to stay in the house for a cpl years or not, go for it. I think other states may face a bubble sooner, and if we are in one, it won't pop here until more people retire and we have a lot of those retirees homes hit the market. Also should see if once covid is over, will people relax more and stop panicking. Instead of immediate gratification, will people calm down and actually look at the house they are buying and start being more sensible with their offers. It's tough out there no matter what. All the best of luck. 

Thank you everyone for all your input, I really appreciate it. This helps me out a lot.

Unfortunately I don't have enough capital saved up to do a hard cash offer off market. I am using a conventional loan and we were trying to be competitive around the $600-650k price point for the property but from the summer till now, we seemed to be getting out bid for properties that didn't make sense financially. We were competitive
summer 2019, and for the same type of house this past summer, we weren't able to compete. I saw a MFH in Malden, summer 2019 go for $630k and came back on the market this past summer asking for an additional $75k. It was a small home with updates needed, and when I saw it again, nothing was done except painted cabinets & walls. Has anyone seen a drop in how much homes are selling for due to the rental income in Boston declining? I thought that impact might start rippling out to the value of prices. 

Hi BP community, my dilemma is a 2 fold questions. My wife & I have a nice real estate agent who is a friend from high school but he has not delivered in bringing us houses from the MLS listing nor homes before they go on market. I know Massachusetts, specifically the Boston area is very competitive. We are looking in Boston and in the North Shore (Wakefield, Malden, Andover...etc) and I seem to be searching & trolling all the real estate websites and asking our agent to see houses. We don't get MLS updates nor suggestions for houses. Is this normal for an agent or is it because of the scarcity of available multi's in our market? Should we try and find an agent who has connections to get deals before the multi goes on the market and is that even possible in MA? If anyone knows an agent who can do that for us, that would great.

My second dilemma is my wife wants to get into a SFH soon and start our family, I still am holding out for a multi because in MA you have to put 20% down to buy a second property as an "Investment Property," is there anyway not to put down 20% on your second property in Mass? I also know if we can find a little fixer up single and house hack it, we can re-fi & use the equity to buy the second home. Any thoughts on this would be helpful. Thanks BP Community!

@John Freed I'm glad you read it! it's much more than a book about finance & investing, it's a mindset. Hope you have a Happy Holiday, Merry Christmas, & Happy New Year! 

I actually have been trying for 3 years to break into the Boston market. I even switched over to looking at condos in the city to see if there are any good deals, there are a lot more now being offered in Southie for reasonable prices (around $575k). But the numbers aren't working for me, you get a 700 - 800 sqft place that offers you terrible parking. lol The SFH (single fam home) market in Malden, Everett, Revere, & Chelsea aren't bad now either, I am only looking for a MFH (multi fam home) 2-4units in those areas but they are tough to find for a reasonable price. My goal is to live rent free if not close to it, to save and then rent out my unit for a small monthly gain. I made offers in Everett & Malden summer 2019, came close, got out bid by an extra $10-20k for ok homes, but that was already after offering $20k over asking. It just didn't work for my numbers. This past summer 2020 I was outbid by sometimes $60-80k for MFH's that were not worth it at all. Even for ones that needed work in both units and you could BRRR it but the money you put into it, wouldn't generate the equity to justify the costs. One major factor I found, is that families were competing for the MFH also besides investors, and families would pay way over asking because they were not going to use it as an investment. I should also mention, check out Dorchester and south of the city. If you don't care about traffic, the south shore, areas like Quincy, Weymouth, Braintree are good spots to find reasonable MFH's. Quincy & Braintree have the T (Red Line) subway system & commuter rail options for people who work in the city.

Welcome John to the BP Community!

Have you read Rich Dad, Poor Dad yet? If not, it's a great read & highly recommend it. 

Boston is a tough market and you either need a lot of money to put down or a great job that provides you with high income or a combination of both. I don't want to sound like a downer, but a lot of these books and even conversations in BP don't apply to Boston. It's like trying to invest in Manhattan, the market has already been bought up and you need to find the surrounding areas that will be the next hot spot (think Brooklyn or Bronx NY). There are stories of people getting great affordable homes here, but they got them back in the 2007-2012 recession. You can't buy a home here in MA for really under $300k and if you look at some of the discussion groups, people are buying homes in NC, Georgia, Maryland, Ohio, & places where you can buy a MFH or SFH for really cheap ($150k - 250K). The rules they use don't really apply for Boston, but they can work outside of the city in other areas like; Haverhill, Lowell, Lawrence, Worcester, & Fall River. You can house hack and do the BRRR strategy in MA, it is tough to find and even harder to bid on & get one in Boston though. A lot of contractors & developers buy up all the MFH's and turn them into condos. Boston gets a lot of investors from all over the world and even covid hasn't seemed to slow that down. You can try close to the city like Everett, Revere, & Chelsea. Again, even in those areas, the homes are still pricey but you can find deals (around $550k - 600k).

First thing would be to talk to a bank / mortgage lender and find out what you can afford and what loan options you can get. Based on the loan amount & down payment, come up with a plan, research the areas you can afford and figure out what your goals are. Do you want a nicer 2 fam that you can live in almost rent free in a great neighborhood for a long time or do you want a 3-4 unit, cash flowing MF that might not be in the best area, a little further from Boston but you can move out of it quickly. You also don't have to go at it a lone. You could get a partner and see if you both can tackle your first investment together. 

Stay positive & never give up, always keep pushing and moving forward. There is never a bad time to invest in real estate, people will always need a place to live. Biggest thing is, do your numbers. Always run the math & give yourself a cushion for decrease in monthly rent, vacancies, repairs...etc

Good Luck! 

The one thing I have taken with me from my Econ classes in college is that the economy is always cyclical. Now how much the market will drop is another question and depends on where you are ( I'm not talking about the stock market). For my area, during the last (2007-2012) recession in Massachusetts, we got hit hard at first but bounced back quickly. Mass had one of the lowest unemployment rates in the country but we also have the Universities, Hospitals, & Companies in our area, that really kept our market stable & going because we are a marketable state to organizations all over the world. Mass really treats their residents well with the social programs. That leads to higher taxes though and higher housing costs. Right now houses jumped in the greater Boston area about $100 - $150k in one year. Houses that we were able to compete for last year, we can't anymore. That's a good thing and a bad thing, why, good because our state is desirable for people to live in which will keep our market stable but bad because it sucks to try and invest in. Boston itself has seen a decrease in rents but it's really a market correction. The average 2 bedroom apartment was renting out for $2,900-$3,000/mo. The bigger corporate apartment complexes driving that rent got hit and are now offering discounted rates on the first year & free first month. It's hurt smaller landlords who over-stretched themselves and thought they could buy that extra property and pay more than what it's worth, without doing the numbers and accounting for less monthly rent (10% decrease). That is a good thing to me because I can jump in when that smaller landlord has to get rid of that extra property but there is still huge demand which can affect that, but I am also willing to buy a property that I can live in for 5years or longer. 

Now that's just in my state, so it depends on where you're looking. If you're looking to buy out of state or live in the property. Does that state have desirability for people to move to where businesses will stay & has the infrastructure for it's residents even if there is a recession to keep their local market going. A big factor will be the future stimulus packages the federal government does. My local government still has moratoriums besides the federal ones, to help tenants not get evicted & landlords as well as families with mortgage payments.

With all that said, it is never a bad time to invest in real estate, people will always need a place to live. BUT you have to do the math & give yourself plenty of cushion. Also what are your goals? If you find a deal on a house (2-fam) that will meet your criteria, like living rent/mortgage free or close to it, go for it. Or is it to try and get a 3-4 unit property that will make you extra money & cash flow. The interest rates will stay low for probably the next 2 years, and I have found that even with PMI, it offsets the costs if not makes it negligible. Do your research on the area & do the math, that's the biggest thing. Use the BP community and ask questions, we are all here to help each other. Good Luck!

I am also searching for a multifamily north of the city, I have been doing it for a year and a half now. I have had offers come close, but it seems there are a lot of cash buyers who offer well over asking. Is anyone else having that same problem? I have been pushed out to places like Haverhill, Lawrence, & Lowell for cost wise but also would still really like to be in the Malden, Everett, Melrose, & Medford areas. What do you guys think about the real estate climate right now in Mass? Seems like still too little supply for heavy demand...any thoughts?

Emily, depending on your budget,and if this is your first house, you can use an FHA or 5% conventional loan for your first purchase of a MF home because you will live there. MA banks will make you take a first time home-buyers class as well as a Multifamily class. Talk with a bank, get your pre-approval letter and take those classes to get them out of the way. Then based on your budget/approval, start looking in some areas you wouldn't mind spending a year or more in. You can def check out areas you like now, but your budget will be a good signal to where you can afford. I am looking at MF's that have at least 1 unit ready to move into or partially ready, and the other unit I can live in & fix up to generate a good amount of equity to re-fi out of PMI and use some of the equity to buy another house. Read some books also (BP's rental property investment book, Rich Dad Poor Dad, and Buy it,Rent it, Profit are some I like). I've talked to plenty of Real Estate agents and the consensus is on locations with a commuter rail. If you can find one not only with a commuter rail but a college or university, doesn't have to be a big university or college, it can be a small commuter or private school, those are the best spots (like Salem MA).