All Forum Posts by: Paul Brockmann

That seems like an exciting strategy.  It will probably be tough to get a winter renter in those areas.  I suggest being careful and keep up your tenant standards.  I would hate to have a professional tenant move in for the winter, then refuse to move out during the in-season and take big hit on your yearly income on the property.  

Hi. I've been thinking and saving for real estate for a year now. I don't have much spare cash that I can invest at the moment. As a young 25 year old living in Boston, what kind of strategy should I consider? I have a great credit score and probably some untapped loan availability.

Also I have read that when buying a multi-unit property, you can use the other units suggested rental income along with yours to prove you can afford it. Can I do the same for a single-unit investment property? Can I use the suggested rental income of the current state property towards the loan? I don't own any other property.

Would you think it is worth looking for a business partner in my situation?  

Thanks! 

Congrats!  I think it depends on what you want to do.  

Do you want to trade up in the rental "scene" and do a 1031 exchange?  It would probably entail more management since it will probably be more doors/tenants.

Do you like this property?  It seems like it is treating you well, but why is its value increasing?  Is it a long term positive changes?  If so, maybe take out the additional equity and purchase another rental property or other investments (no parties allowed, lol).  

I think I would certainly take advantage of the low interest rates and the additional equity.  I would diversify my money and split that "earnings" across several sectors.  

I have been thinking of doing something similar, but with my parents and I would be the owner occupying the unit.  

I am thinking you would be 66% owner of the property and your friend being 33% owner.  The fact that you are paying the mortgage benefits you both, just not equally.  Define that when you are renting, what happens to the "cashflow" and how to choose a tenant (no relatives allowed, perhaps).  If you were to sell, you would get 66% of the profit/loss, and he would get 33% profit/loss.  Trouble is when there is some sort of expensive maintenance.  It's your home, but his investment property.  Maybe you can straighten that in writing as well.  

Don't forget to include some sort of selling clause.  Have a way that he can buy you out or that he can buy you out, in case the relationship gets sour.  Something like a shotgun clause or bringing in two real estate agents and finding the average appraisal.  

Aaron, I'm currently renting out of Watertown/Belmont line in a duplex.  With my sister just a 10 minute walk renting in Belmont.  If you want some marketing or market advice, for what it's worth, I'd be happy to help.  Feel free to message me. 

In investing, you need to take risks.  However, being a successful one, you know the risks and can prepare for it.

You make some good points.  If it doesn't quite cashflow, maybe that's good.  With rent appreciation, mortgage ammortization, and property appreciation, maybe it is worth the "negative" cash flow.   A 1% gain in value in a year on a 50k property is only 500 dollars, while an increase of 1% on a 200k property is 2k.  That's like another $125/month in theoretical cashflow.  I guess it could go down just as much.  (Sorry, I'm thinking out loud and working this  out.) 

Looking back at my analysis, my budget usually breaks with the property management 10%, where I would be paying myself.  I would still have enough for expenses and budgets, just nothing left over for me.  A possible plan could be to manage it myself until I am able to get a positive cashflow out of it due to a refinance or rent increases.  

I have to do more thinking on this but maybe this is what I have been missing.  Maybe this market is too rich for cashflow, but great for appreciation.  

Hi Keith, I know what you mean.  I am also living in Cambridge at the moment and having a tough time finding any potential Buy&Holds in this area.  All of the one's I am analyzing, I don't quite break even.  

I think the key to this market is to skip the MLS and find deals by using a Wholesaler or being one yourself.

Why does she want it power washed?  Is there mold on the siding?

You are on the right track.  

You have several ways to look at this decision:

1) What kind of rate of return could you get for your money?  Depending on your market and your experiences, you could be in a hot market or not.

Knowing that:

2) Is that rate of return higher than your mortgage interest rate?  Remember that there are tax benefits and right offs of owning a home so that if it is close, you are probably better investing into your own house.

Depending on those answers, you can see what would be smarter for you and your family.  

I think from my own opinion, I would put it down in the house.  Having a small and affordable monthly payment could mean you paying for your children's college faster, retire sooner, or having more financial flexibility to pursue your dream job.  Plus, you can always take out a home equity line of credit and use that to invest when opportunities arise.  

well maybe you can get creative with it.  

After a couple more properties, your "well" might be Nearly dried up, but realize that you should be cash flowing.   The more properties, the faster your next down payment fund will grow.  Also, after more and more experience, you might meet other investors and partner with them on other deals.   Another possibility is getting a line of credit over your properties and using that as a source.