All Forum Posts by: Lior Rozhansky

@Tim ODonoghue congrats on your first investment! Some things I would think about based on what you said: 

1. Do you have to sell your current property? If it's cash-flowing well and doesnt require too much monthly maintenance, can you leverage a HELOC. Just a thought, why not keep a cash flowing property if it still makes financial sense.

2. Based on your downpayment amount, it sounds like you are going to be doing some low downpayment owner occupant loan, like an FHA. On those mortgages, you are technically saying that you'll be living in one of the units (though of course this is a gray line and I know plenty of people that just go ahead and rent all units --everyone has their own risk appetite).

3. In terms of a rental, going back to the second point, why wouldn't you just move into one of the units in the 2 family that you buy? If you go rent another apartment, then from a pure financial perspective if your rent is higher than the rent collected from the second unit, you'd technically be losing money. 

Just my 2 cents on this. Also, as a heads up 550-600K for a two fam today around the Everett area is going to buy you a pretty dated and small 2 fam. Make sure you account for potential upfront work you'll need to do and make sure you are pulling proper rental comps. As @Avery Heilbron said in his post, 2 bed/1 bath units are doubtful to get 2000 in rent. I've got a 2 bed in decent shape that I'm getting 1650 for (prob 50-100 below market, but still). Good luck! 

@Sal A. welcome to the group! Definitely get your criteria pretty tight as you begin your journey of investing. The Boston market is completely different then the other out of state markets you mentioned above from many different angles including cash flow, appreciation, and management. I'd definitely prioritize your financial goals from whether you are really looking for another stream of income or if you're ok playing the appreciation game in an A class market. 

There are also a number of syndicators around the area who invest locally and out of state, so definitely connect with them if you are looking to be a private investor. Happy investing!  

@Philip Vidal just throwing my 2 cents quickly. Agreed with the comments above Somerville is going to be very tough to do this in. I'd check out the city of Boston's Additional Dwelling Unit program, which allows you to add an additional dwelling unit to a single fam, 2 fam, or 3 fam without a zoning process. There are a few restrictions, such as it must be for owner occupants and you are not allowed to change the "envelope" of the building, nor would you be able to sell of the units as condos down the line, but if you are approaching it from purely a rental perspective, that might be the play. Obviously you wont be able to live in areas like Somerville or Cambridge, but this would work in official Boston neighborhoods like JP, Roslindale, Eastie etc. 

More info here: 

https://www.boston.gov/housing/additional-dwelling-units

@Calvin Lin Awesome that you were able to raise those funds. Development in Boston can be profitable but tricky, as you need to really master multiple components including understanding the zoning feasibility, the permitting process, land entitlement, and construction management. If your investors are more conservative, then going head first into a development project may not be the move (unless maybe you partner with or fund an experienced developers project). 

That being said, 7% CoC is not too hard to achieve through your typical apartment investing; even with turn-key buildings close to the city you can get pretty close to these returns. As you climb up the ladder of risk towards value-add projects, you can get your investors (and yourself) higher returns.

The other factor to definitely consider if you are going down the apartment game is how much leverage you are going to use with your deals. If you are planning on buying with just cash and no financing (which would be the least "risky"), then again your expected returns would go down. If you are comfortable levering up and using these funds as a 25% dp on commercial notes, you can again begin to realize higher returns. 

Good luck! 

@Christian Nachtrieb This is one thing I would definitely not try to do by myself. We are going through a similar eviction in Dorchester, and it's really a sticky process. We gave the 30 day notice to quit in person, but then hired an eviction attorney who did the rest (including going to court, doing all the paperwork etc). 

To be honest, if your tenants decide to stick out the eviction process, it's very unlikely they will be out by April--it's going to take closer to 3-4 months. Definitely hire an attorney though!

@Chris Munichiello Dito what others have said. Looking at about 1900-2000 for 2 bedrooms, 1600-1700 for 2 bedrooms, and 1200-1300 for 1 bedrooms, though of course true condition of the unit has great impact. 

@Michael Zack First regarding your numbers, those are actually pretty solid. Any non-Boston is obviously going to scoff at our monthly cash flows here, but obviously if we buy around the Boston area it's because we see the long-term growth potential here. I underwrite my deals with similar numbers for capex, vacancy, and repairs. Your rent to purchase ratio is pretty solid for Quincy, and realistically you won't do much better if you buy within 5-6 miles of Boston. 

As for the whole noise issue, honestly I would leave it as is. I actually have had a similar complaint in my property in Everett, so you have to make judgement call. I dont think I'm being a bad landlord when I make the decision not to spend potentially up to $5-$10K on something that adds very little value to the building. I also know that the tenants wont do better at other units, so from a competitive standpoint I'm not worried as well (plus I'm very responsive with maintenance calls, so if they want to wait for a week before issues are resolved they can be my guests). Long story short, unless a contractor/vendor can find a cheaper solution or it's truly a major, major issue, I probably wouldnt sweat it. 

Plus I really hope this doesnt make you sell and go back to renting! 

@Shayne Mahoney Boston area is an expensive market but you have to put that in perspective. Yes, a 2 or 3 fam can run you $700K or up depending on the area, but you are also getting gross building incomes of $5000 or higher. You're obviously not going to cash flow around here compared to other areas in Mass, whether its west (Worcester) or south (south shore etc). The question on whether to invest here really becomes do you believe in the Boston market for the long term (you're investing in local economies just as much as you are in concrete!). So, if you think that Boston has more room to grow economically, then investing here is a good bet. I look at the business news all the time to see which companies are coming here, who is thinking of doing what around the area etc. 

Especially if you are going to house hack, you obviously want good numbers but need to understand what you're willing to spend. Around Boston, house hacking on a good deal can typically allow you to live for free or close to it (maybe losing a couple of hundred bucks a month). But, if you feel like cash-flow is a higher priority for you (which typically is not primary driver of returns on an investment anyway, but that's a different topic), then you would need to expand the radius of your search!

@Matt H. Really depends on what your goal/gameplan is. Are you looking to become a flipper or look to buy multi family? Either you are going to have to connect with private lenders if your own capital is short, but of course the pitch is different for a flip projects vs buy and hold, so you just have to get comfortable with your avenue. Getting your name and face out there is definitely key. 

Other avenues you can look into (depending on your exact balance sheet) could be helocs on your primary residence, cash out refinances to pull some liquidity out, or other forms of credit lines. 

@Justin Cyr welcome to BP!