All Forum Posts by: Lior Rozhansky

Hey Mark, awesome that you are thinking of making the big jump! I guess my question would be why are you looking to go into a rental shop instead of going into sales? Depending on what your long-term goals are, the way to build a long-term business in the brokerage game is through sales. You might take a bit less "guaranteed" income your first few years as a sales agent, but the potential is much higher. I think it's a bit of an old myth that you need to start in rentals, then graduate into buyers, and finally into sellers. Just my 2 cents. 

@Nick Cecchini welcome man! So most common "back of the napkin" rules that you hear on BP just dont translate over to Boston at all. You can't really compare the cash-flows of mid-west or even most southern markets (where a lot of these podcast guests tend to be from lol) to that of Boston, which has been one of the strongest economic markets in the US the last decade. Apples to oranges. 

That being said, there are still plenty of solid rentals plays to be made. Looks like you are from Dot, so even though a lot of the 3 fams you may be looking at are pricier (aka 800/900), the rent rolls on can hit 8-10%+ CoC returns because the rents are so strong. You can even look at 2 fams that have large bedroom counts, like 3-5 bedrooms, which can also really push your gross rent roll.

I've personally house-hacked twice as well as bought other rentals, and there are plenty of other success stories. The trick with the Boston market is you have to understand the different pockets and the risks/rewards that comes with each one! 

@Gaurav Agarwal There are plenty of markets around the area where you can push 7-10% CoC. If you look at mutli fams in areas like Dorchester, Roxbury, Roslindale, Hyde Park, you'll be able to find deals there. Areas like Everett, Malden, Medford will typically get you a bit lower, like 5-6% CoC though you'll see exceptions to the rule.

I think you'll also need to tighten your criteria a bit. What kind of assets are you going to be looking at, as well as how turn-key vs distressed you'd be willing to look at. Good luck! 

@Elena C. your numbers look pretty solid. The only 2 cents I have is regarding underwriting property management. I learned this from a great BPer, Ben Leybovich, that you need to be careful about underwriting that. Should you theoretically do it? Absolutely yes. But if you are truly going to be competitive, especially in a nutty market like Boston, you may have t get comfortable with assuming that you'll manage the property. In fact, you can think about it as your "competitive advantage" as a small local investor vs maybe a bigger fish who will need to throw PM on the property right away. Also, realistically, for one small multi fam building, there is really not that much too it anyway once you know what you are doing. Just food for thought on that. 

As for areas like Everett, Revere, Medford, Waltham etc, there is still opportunity where the numbers work. You may need to look at a lot of places and get creative, but it's out there. I just checked out a 2 fam that was listed as a 2 bed and 3 bed units but was actually more of a 3 bed and 4/5 bed unit, the listing agent just really messed up the listing. Good luck!

@Martin Vilarino this is where personal investment philosophy comes in (as well as your goals). Do you need your real estate to throw a ton of cash of every month so that you can enhance your retirement? Or are you looking to buy assets that may not throw off as much monthly cash but will be golden in 5-10+ years down the line. You need to think about your risk tolerance as well as personal goals to figure out the right market to go after. Hope that helps!

I think the way @Russell Brazil phrased it was gold. Cash flow and market selection all comes down to risk tolerance. It's very unlikely to find 1% property around Boston, but you are trading that in for investing in a very stable and growing market. You can certainly move 45-60 minutes (or even further) away from Boston, but the further you move away to chase cash flows the more market risk you take. Real estate is not like a bond, where the only function is cash yield; It's a lot more dynamic!

All that being said, you can still find solid returns if you know how to look. And it doesn't even have to be "off market", I've purchased MLS deals where the returns have been good. Good luck!

@Darryl Jennings First congrats on the decision man. I woudn't worry too much about the pre approval, once you get pre approved they tend to last for up to 6 months (and even if it expires, worst case the lender updates it for you lol). 

But like most people said, winter time is probably the best time to get a deal. You have more limited inventory, but if you can find something you like now is the time to pull in the trigger. THough you are right that it might take you a bit longer to rent anything out as a general rule of thumb, there is quite a bit of market variance. If you are getting into areas that are very 9/1 heavy (i.e Boston, Brighton, Cambridge etc), sure it would be tougher. But there are plenty of areas around here where you can get a rental done quickly, even in Jan/Feb. The trick would be also to underwrite an extra month's of holding costs so you are prepared for the costs. Good luck!

@David Toro. For 203K contractors, I believe there is a closed list of contractors that are licensed and approved to work for these loans. I think if you just google 203K approved contractors, you should be able to find it!

As for finding "reliable contractors", unfortunately that is just the name of the game. You'll need to screen plenty of contractors (kind of like tenants), and once you get in business with them need to keep a sharp eye on them. Good luck! 

@Martin Vilarino Welcome to BP! Easiest way to break the market is definitely house-hacking. Even though the prices are high, you can get into small multi-fams using a owner occupant FHA loan for 3.5 or 5% down, which will allow you to get into 600-700K properties for ~20K +/-.

Happy hunting!

@Elena C. congrats on getting ready to make the move, it's a big step! In terms of house hacking strategies, you are going to need find a balance that you are comfortable with from a few perspectives, including location, condition of the property, and bed count/cashflow. 

From location perspective, Malden/Everet/Revere are all great areas that are changing by the day with all the development that is going on. Areas like Waltham are a bit different, and you could call them more "established". This will also impact the type of tenants you can expect, and if you are going to house-hack a single family and rent out a bedroom or two, you'll want to take that into consideration. 

The other thing to consider is condition of the property. You talked about breaking even if the area appreciates over the next few years from the equity gain. Very true, though the other thing to consider is do you want to force appreciation through taking something that needs a bit more work and creating sweat equity though upgrading the home. 

Finally, I would say take a look at the market for 2 families. Though getting a 2 fam in these areas in the low/mid 600s is not easy, its not impossible, and the cash flows there would certainly be a lot better. Especially if you going to hunt over the next few months in the winter when everything is a bit slower, there's a good chance with enough offers you could land one. 

Good luck!