All Forum Posts by: Lior Rozhansky

@Mugdha Joglekar

Well I think one key step you are missing before selecting markets is looking at our goals (as corny as it sounds, its true). Somerville/Medford is a drastically different market than say Lowell. Is your goal to produce another income stream? Or are you in a position where you just have some cash lying around, you don't really need say another $500 or so dollars a month, and you would rather go for an appreciation play? 

You also want to think about quality of your tenants in each market. More than likely you will get a much higher quality tenant in Somerville/Medford than in Lowell, which could mean less headaches/management. Not guaranteed but likely. 

So, if your goal is to create that other income stream, than look for those other markets like Lowell---there you should definitely see higher cash flow. If you want a more stable asset and bet on some appreciation, then medford/Somerville is the way to go, but expect to breaking even or even maybe losing some change here and there until you sell. 

Depending on your goals happy to recommend other towns to check out.

@Himanshu Yadav I think for your budget some areas to realistically consider would be Malden (though your range is certainly on the lower side), Revere, and parts of Dorchester. Other areas to consider that are not directly on the T but close would be Everett and Chelsea.

2 BD certainly has a high demand, since it can be used for a young couple, young family, or roommates, so its very diverse in terms of customer range. But if you can find 3BD in your price range (this will likely be in areas like Revere), I think you will still see plenty of demand for your unit. 

In terms of finding new deals, there's a variety of things you can do. Most obvious is just hunt the MLS like crazy --its a volume game. Other place that I've seen condos for sale is believe it or not craigslist---the real estate for sale section has lot of different inventory that you can search by city. To be honest I wouldn't recommend doing things you may hear on the podcast like letters just because its just because the technique is really over-saturated in the greater Boston Area. I would really look to form a strong relationship with an agent who works with investors that really knows the areas--probably your best bet.

Christian, this is a tough one to be honest. If your true goal is pure cashflow, then this is going to be tough to achieve. I agree tat you are not accounting for any maintenance and bigger capex (like you said, bathroom remodel etc)--it really adds up quick. 

That area is defintely a great rental area, you'll see a lot of grad/young professionals priced out of downtown, but its still going to be tough to meaningfully cashflow. Even if you use your numbers above (which I dont think you will realize), if you pull 200 a month or so, which is 2400 a year, compared to the 40K you have to put down is ~5-6% CoC. Yes you should look at IRR, but I think that tells you a lot of the story.

If you are really looking for cash flow, I think you are going to have get out of the "T" areas--just too competitive honestly. To really get that clean ~300 per unit CF, unless you find an awesome off market deal, I think you'll need to look a bit north (or south)---can be areas like Lynn, Wakefield etc. Not saying you can't money in Dorchester, but cashflow is tough.

Hey Daniel, I'm on the hunt for areas where I see sustainable economic drivers. Obviously Boston as a whole is one of the most diverse economic cities in the US, but I think finding the right pockets is essential. It's tricky here, because any area that's close to Boston that's not an A area is supposedly the "next Somerville", so I think it's really important to understand what's driving your market. My buy and hold is in Everett. No, I don't know if the Casino will explode the real estate values in the city. But what I saw was that it will create close to 3,000 new jobs in the area. Those 3,000 jobs translate to tenants in search of nearby housing. So regardless of what the value of homes may be, my units will always be in demand. I think there are other pockets of opportunity like that in eastern Mass. 

@Joe DeFarias this looks like a great project. I'm also curious what city this is in and what the high level numbers look like. I'm also looking to add to my rental portfolio, I like the idea of going after short sales to avoid cash buyer competition though i've heard from many its a huge pain 

@Taylor Johnson He works with investors all the time, call him and see how he can help you!

Congrats @Chris Roche! I got mine back in October, and as soon as I closed I was thinking how to get the next one. The one trick I've seen that is helping me get my second one (getting pre-approved now) is to talk to EVERYONE about what you are doing. I kept talking about my investment and the returns I'm seeing, and people naturally just get interested. I got a family member ready to invest because he has no other good place to put his money. And besides this, I think partnerships are great. My approach at it is to provide great deals for investors (I'm doing heavy direct mail marketing), which first allows me to A. wholesale to raise additional capital and B. if there is an opportunity, I can try to bring it to more experienced investors and see if they would be interested in partnering. So my value-add is finding deals --yours doesnt have to be the same, but as long as its valuable to someone, you could get things done. 

@Chris Roche And regarding the downpayment, its just the price of the game here. I had to save up for a bit as well to afford to get in to this market. And make sure that even with the downpayment and closing costs on a loan, you still have a significant amount of cash left over to cover any emergencies or whatever once you own the house. My goal was to have at a minimum ~10K left over after all the acquisition expenses. 

@Chris Roche I think in theory, this is a really great idea, and this was exactly my plan for my first property (I read all about it, including some of the threads here that were previously mentioned). However, I think the reality in the Boston market that at least I found to be was any property with leftover equity (i.e needs to be rehabbed) is getting picked up for cash or wayyyy over asking price. I made many such offers on potential fixer-upper 2/3/4 families, but none went through. So I had to change strategy based on the environment. FHA loan is not a competitive offer, so I changed my goals for my first property to try and find something a bit more towards the retail end where at least theoretically I would have just a bit of cash flow. By no means do I want to be a retail investor, but my thinking is the play is to just get in the game somehow; doesn't have to be a home run deal. Now, with a property under my belt and something to write on my resume, Im concentrating on value-add projects. Im sure people will tell you keep going and try to do it with 203K and I would agree, but after a while, if you see that FHA (especially 203K) is just not a competitive offer in a crazy market like Boston, may be time to pivot. Not to mention the few lenders I talked to were distraught when I brought up 203K with all the crazy logistics (and they were considered 203K "experts").

@Peter Pezzano fair points about Medford and Malden-though this logic really applies to all of Boston; if you bought a duplex essentially anywhere (give or take) on the greater boston area market two years ago you can cash in a nice check today. From what I understand, besides banking on general market appreciation, there are other local market factors to evaluate i.e economic stimulus through jobs, government funding etc. My property was a cash flow play, I just thought that the casino coming in can be nice icing on the top if it really boosts the city's local economy (or it can drop my value, who knows lol).