All Forum Posts by: Rachel Feng

Hi, fellow MA investors! I just purchased a two-family in Watertown and plan to rent them out. I am trying to decide whether I want to allow pets or not. I have done a bit of single-family rentals and have always allowed pets, no breed restrictions. I personally found no issues with that. As a dog person myself, I hate to rule out pet owners as prospective renters. However, I am surprised to find that very very few rental properties in multi-family buildings allow pets, often times, at best some cats or small sized dogs. I was just wondering whether I miss something. I understand the risk of wear and tear, dog bites, and also potential complaints from other tenants if the dog barks excessively (up and down two-family). However, this risk also exists for single family, but you would see much more single family rentals allow pets. Is it just that the risks for two-family are greater, or is there any law that I am not aware of I need to take into account? Do you typically restrict size if you do allow dogs? Please shed some lights. Greatly appreciated!

Thank you Dan. I just got a reply from the city and they were quoted as follows: 

"The minimum ceiling height required in a basement is 6 feet 8 inches. You will not find this on the City of Medford website because this is governed by the Commonwealth of Massachusetts State Building Code, and it is not a City Ordinance."

 Thank you Dan! That was very helpful. Do you happen to know the minimum height requirement? I did some googling and found this document:

 https://www.mass.gov/files/doc...

quoted "ceiling heights in habitable basement, including drop ceilings, shall be a minimum of six feet eight inches". Is this the height standard to go by? 

Hi! I am thinking about doing some work in the basement in order to create extra sqft from basement. Right now the room is finished and it appears that the room has enough height. There is one exit (door) going out to the yard. It looks like I will need another bigger window for the second exit. I was wondering what's the ballpark number to make a bigger window in the picture attached. What kind of contractor will I need for this kind of project? GC? What is the cheapest option to install some sort of heating system in the basement that is separate from the house (e.g., electrical)? Any comments will be very much appreciated!

 

@Todd Wheatley 

@Jimmy Lieu

I think it should not be hard to find lenders that could waive PMI, if that is your goal. I know quicken loan PMI advantage allows you to waive PMI. However, I used to build mortgage/loan pricing/underwriting models, elimination of PMI definitely comes with a greater risk for lenders, which translates to higher interest rates, with everything else equal. A nice thing about PMI is you can have it eliminated once LTV of your mortgage is lower than 78%-80%. One could really consider PMI as another layer of interest to pay, but a temporary one.

However, if you choose a mortgage without PMI, you will carry that higher interest rate until you refi out of it. 
Another thing to pay attention is also the fee difference.

So I recommend really comparing the overall cost of the loan, taking into account how long you will hold this mortgage, rather than focusing on finding a loan without a PMI. 

 True, there are deals everywhere. But I'm wondering for someone who just ventured into a new out-of-state city, it's probably harder to find those deals. 

 Hi Jonathan,

Thanks for your reply. What I am confused was if locals do not see certain houses as a "deal", why would a out-of-state investor has a better take than that? In a hot market, good off-market deal should be really hard to come by. I'm surprised with the inventory of those "off-market" properties. I do noticed most of them seem to come from not so desirable areas. 

I am doing a lot of research on the Columbus, OH market recently and has gone through lots of old posts about this market. The thing that I like about Columbus the most is it is a growing city with a good university. However, I also have a few observations that I do not quite appreciate. I would love to hear from other investors on their takes as well. 

1. It seems to be quite crowded by investors in general, because the price point still looks very enticing for a lot of out-of-state investors (I'm from the Boston area.). Most of the two-family I looked at in those up-and-coming areas are just not well taken care of. A lot of properties are flipped for a quick profit, rather than for its long term values. It is hard to find a good quality turnkey rental. (For example, I wanted to avoid carpets, but most flipped places are with carpets.)

2. In my local market, it is rare to come across off-market deals these days. However, in a seemingly hot market like Columbus, there is not lack of off-market deals. My question is if locals would not snap up those properties, should out of state investors be cautious about those "deals"? 

3. It seems the investment thesis changes quickly at the street level. I wonder whether flying there and walking down neighborhoods myself before I decided to put in an offer is recommended. 

Yes, fully agree with you. Even if you have to pay PMI, you can still think about it as extra interest rate to pay. Because of unbelievably low rate, current rate+PMI is basically similar to interest rate a year ago and still lower than previous years.

That said, I was actually planning to do 20% just because I feel a little stressed about seeing the high monthly payment if I have to have the property vacant during renovation period. I also do not want to be overly leveraged. However, I am still open to lower down like 10% to 15%, depending on the situation I guess. 

I agree with it being "best asset class" for the most part, but mortgage crisis induced recession is a still a recent memory. I would add that it does depend on where you invest and whether you have enough cash reserves for times when the property has to sit vacant. 
 

Good point, for someone who does not have this kind of network, I probably will end up overpaying.