All Forum Posts by: Jeffrey R.

Congrats Askel - so good to see someone grinding it out and making things work in this market!

I'm just starting down what I hope will be a similar path, looking to do a 203k rehab and house hack, ideally in Dorchester.

203k seems like the way to go but I want to be sure I'm working with a lender & agent who have experience with this type of financing.

Sounds like you've found a lender who is working out well? Did you work with an agent? Any referrals you wouldn't mind sharing would be huge.

Again, congrats - eager to see the finished product! 

Thanks for all the insight folks. I didn't mention specifically where this property was - It's in Chelsea, which partially accounts for the lower price - but for a 3 family in what looks to be very good shape with no major issues disclosed up front, it still looks to be a reasonably good deal. It's an old building, typical for the area, so of course I'd expect that circumstances could change significantly with an inspection.

I think the biggest variable here - and where I should probably spend some time being more methodical - is on the rent. I'm relying mainly on rent-o-meter and some of the comparable properties I'm seeing listed on Craigslist. (Units that appear to be in older multi-family buildings, not the newer construction in Chelsea.)

The property has since gone under agreement, but this has been a valuable exercise nonetheless. 

Thanks for the quick feedback folks. A few quick answers to the questions above - 

@Adrian Chu, I agree that 8% vacancy seems high in this market, though I see a lot of people using that as their rough estimate. In reality I'd guess that it would be closer to 4%, but I'd rather be cautious.

@Ann Bellamy, property taxes & insurance are rolled into the debt service number above; I should have clarified that. After taking a closer look at that, I think it may in fact be higher by ~$250 ($2000 on principal & interest, $650 on property taxes, $180 on insurance.) This obviously changes the math quite a bit, but it still looks relatively good in contrast to other things I'm seeing.

@Patrick Hopkins, there is in fact only one heating system in the building.

Hi fellow BP-ers,

I’ve been lurking on BP for a while, trying to learn as much as I can in the process, and I’m planning on making a purchase in the next 3-6 months. My goal is to find a 2-3 family in the metro Boston area that I can house hack in. I’ve tried to get into a regular pattern of analyzing deals, and I’m at a point where some outside feedback on my numbers would be really valuable.

In terms of location, I currently live and work in downtown Boston, and I’m primarily looking to buy in Dorchester or Chelsea. I wouldn’t rule out other parts of Boston proper (though I’m guessing I’m priced out) and communities just north of Boston (e.g., Everett, Malden, etc) are on the table as well. Further out, Salem is also appealing.

I’m pretty realistic about the state of the market in the Boston area, and that it's tough to find anything that cash flows or allows you to live purely rent free. That being said, if I could find something that would cash flow if it were fully rented, and at least take a bite out of my mortgage payment while I’m occupying 1 unit, that would be a pretty significant improvement over my current reality of renting.

Anyway, here are some numbers for a 3 family I came across pretty recently that looked interesting.

• Initial investment = $550,000 (mortgage $440k, putting 20% down)
• TTL income = $5,300/mo (units 1 & 2 are 1BRs I estimate would rent for $1,500 each, unit 3 is a 3BR I estimate at $2,300)
• Debt Svc & Expenses = $4,605/mo (debt svc @ $2600, prop mgt @ 11%, vacancy @ 8%, repairs @ 8%, capex @ 5%, + reasonable amts for heat / hot water / water / snow removal / landscaping)

This nets out to $695/mo in cash flow with all three units rented, or -$250/mo if I’m occupying one of the 1BR units and managing the property myself while living there.

I’m mainly wondering if my analysis looks sound, and in general, if this looks like a worthy deal to other folks who have experience in the Boston area. (It looks better than most of the properties I’ve seen lately from where I sit, and it seems like a worthy move in contrast to my current reality of paying $2,400/month in rent.) 

Any thoughts or feedback would be hugely appreciated!