All Forum Posts by: Lior Rozhansky

@Victor Ramirez welcome and congrats on making the decision--it really is a big step! In terms of finances, I'm assuming you'd use an FHA loan to get into your deal, meaning you would need only 3.5-5%. That part if pretty straightforward, especially if you speak with a good lender, but I'd say most important is to make sure you dont drain your cash at closing--you want a good chunk of cash left over to protect yourself from unexpected costs (I bought my first multi when I was 23 and within a month had a furnace go out).

As for cities, Middlesex county can be quite large, so it depends on number of factors including what you can get pre-approved for, where you would be ok living, your commute etc. I would first tackle getting pre approved, because that will help define your scope. From there you can start analyzing deals in specific markets and see how the cash flow numbers differ. Let me know if you have any questions! -L 

@Brendon Kerrigan feel free to DM me to add to your list. 

@Andrew Mowe to give you market specific answer, it depends where you are buying. If you are buying within 20-30 min of Boston, then I would say its very difficult to find something that breaks even completely while living in the property (when you really account all expenses beyond PITI, such as maintenance, vacancy, utilities, snow etc). On 3 families you could get pretty close, but still most likely it will cost a couple of hundred of dollars.

When analyzing house hack numbrs I would look at both scenarios of owner occ and full rental, and priortize the latter since I'm assuming your goal would be to turn that into a rental prop ASAP. As long as you can hit $200-$300 per door in cash flow (again, for markets within 30 minutes of Boston), then you are on the right track with the property. 

My suggestion would see how the appraisal comes out and then do your own due diligence about market pricing. Typically when people sell to neighbors, they almost always take a % discount to what buyers on the market would be willing to pay. Unless your neighbor is coming in cash/clean/and very strong price, you may be leaving more money on the table then saving. 

Yes all my deals are BRRRR deals. Its hard to pull off a clean BRRRR in Boston, where you can get the entire down-payment refinanced out, but on a good deal you can get a nice chunk of your money out.

The way I underwrite my deals is 5% vacancy (used to be 3-4%, now 5%, though does depend on the market you're in), 5% maintenance, 6% PM (though again depends on your market), and then another 2% for landscaping/snow/other. I think 10% for maintenance is probably on the higher end and a bit of overkill, but if you can get an offer accepted with that underwriting all the power to you! Water/sewer I usually go about 50-75 per door, depending on unit size. I also have $50 per door capex budget as well. 

Good luck! 

@Patrick McKinney I think there's a lot of value in what everyone else has said. One other thing to kind of shift your perspective on market timing is that its never going to be perfect, and unless you are planning on flipping the property, I probably wouldnt let that impact your decision too much. If you're gonna hold the property long term, than the sooner you get in the better your returns will be, especially in a market like Boston that I expect will be pretty resilient over the next few years anyway. 

That being said, most multies that are not over-priced or are not dumps are still pretty competitive. You'll have to take many stabs, but eventually you'll be able to pull it off! 

@Charles Murphy welcome! You are definitely on the right path. I house hacked my first 3 fam 4 years ago, which was the stepping stone to growing out my portfolio. Big fan of Dot, I think there is still a lot of upside left in the market plus the rents there are still very strong. 

In terms of actual steps, I would first talk to a lender to know what kind of loan size you are looking at so you know what you can afford. Then, it's a matter of looking at a ton of properties, running the numbers, and submitting tons of offers. You're going to be a less competitive buyer as an FHA buyer, but as long as you are willing to grind out the process you can definitely land a solid multi fam!

@Khalid Khan lol that last sentence is gold. Welcome to greater boston! 

As for your question, as others have mentioned, right now you are not really "bankable" until you get your job and can show consistent w-2 income. Also with FHA, you can certainly do that but do know that there are county limits for max FHA purchase price--I dont believe there are counties that will allow you to buy a $2M multi family on an FHA loan, you would really have to go jumbo loan.

So in terms of what to do, it depends on your strategy. You obviously have some strong feelings about a possible correction, so up to you whether you want to invest now or wait for this potential correction (though Im on the camp that even if a national correction where to happen, I think the impact in boston would be negligible). If you wanted to do something today, honestly your only real play would be to passively invest in someone else deal--that way you can make some good returns on your money plus learn from an experienced operator. I would network and speak with different people to find good opportunities. Happy to answer any q's you may have! 

I'm all about Section 8 (of all my units I only have one market tenant). It seems like a decent deal on paper here based on the numbers, those are pretty solid rent projections. Of course it does depend on where in Quincy this as well--if its in one of the more desirable sections then pretty solid. Only concern would be the non split utilities, your bills are going to be pretty high for gas and electricity for all those units. Also depends on condition of the property and how much work it is, but overall sounds like it has decent potential.