All Forum Posts by: Maureen F.

Wow, this is very interesting.  It's going to be spectacular!  Thanks for sharing with us Ricky.

@George White --  I agree that the market in the immediate Boston area is overpriced, although you don't need to cross state lines to find something reasonable (Brockton, Worcester, Attleboro etc).  You mentioned Vermont and Rhode Island -- I take it your work location is flexible (work-at-home)?  Anyhow, Boston has a home center with resources about mortgages and homebuying, and many other cities do too.  In Massachusetts we found the MassHousing loan to be the best product, however it has an income limit, and they include some of the rental income in determining whether you're under the limit, so it doesn't work for everyone.  The OneMortgage from MHP also has an income limit -- it's lower but they don't include the rental income in determining program eligibility (they do include part of it in determining debt/income ratio).  However, the big disadvantage of the OneMortgage is that you're required to permanently owner-occupy the home; if you move you have to re-finance.  Also, your credit score generally should be at least 680 for most mortgages.  If you'd like to PM me on this subject please feel free.

As for meeting people, once you start going to the groups mentioned above you'll make contacts, and you can find people on biggerpockets too.

Good luck!

Welcome @George White.  Let us know more about your initial plans .... what kind of property do you plan to buy, and where?  Will you owner-occupy?

The best quote we got is $3K annually for hazard insurance, replacement cost used is $695K.  Will be owner-occupied.  Is this a decent price, and if not, anyone have a good lead on an insurance broker?  Thanks!

Looks great!  Do the repair costs include any of your partners time managing and helping with the rehab?  How many hours a week did he spend?  Or do those costs come out of the profit?

Craig, the Boston Home center is having an info session Monday May 7, 5 PM to 7 PM, East Boston Library.  More info on their website:

www.bostonhomecenter.com

Thanks Ann, I'm so glad you took the time to address these issues.  

Re point #2, I agree that the Boston market is approaching the top of a bubble.  The question is not IF it will burst, but when and how much.  But let's say an owner-occupant buys a triple today for $600K for a long-term hold, let's call it five years.  Each month he's out-of-pocket $1K (due to living in one of the units).  He gets favorable financing for first time home buyer (3.5%, 30 years, and just to make it simple let's say it's 100% financing).   And let's say the alternative to buying is renting for $2K/month.  So he's ahead by 1K/month.  At the end of five years the loan balance is $537K, and he's saved 60K versus renting, so he's in for $477K,  20% less than he paid.  So if the market is down 20% he's at breakeven.  What is the likelihood of that being the case, who knows?  If he simply rented, we can be sure that he'll be out of pocket $120K after five years with nothing to show for it.  

Re point #4, the idea is to try to mitigate risk by buying at a price below the regular MLS market (although it has other risks).

Thanks Ray -- great stuff!  

Exactly Andy, and that might be what we do -- buy something from the MLS with an all-cash offer and six weeks to close. Such an offer would be much more competitive than a financing contingency. We just need to be sure to have back-up plans in case the 1% chance of not getting the regular mortgage happens.

Thanks Sam.  Step #1 is done, and the sellers that we've come across seem interested in getting the best deal from their perspective.