All Forum Posts by: Ross Williams

This guy is a fraud, as are 99% of gurus.  He claims he developed a direct mail letter with his "special ops mind technique".  Really?  Why would he sell this "secret" information and create competition?  Any "guru" that has to post multiple paragraphs on BP in response to a student he blatantly ripped of says it all.  Stick to the information on this site and save your money from criminals.

I have looked at Chelsea for several years (I currently own multi-families in Dorchester, East Boston and South Boston).  I agree we are in the early innings in Chelsea, which may not be a bad thing compared to red-hot markets like East Boston, but I would be careful of much of the construction quality in Chelsea however.

Hi Patrick,

Funny I was just at a tax auction today in Hudson.  Hadn't been there in a while and it is really growing. I guess that's more proof people are being priced further and further out of Boston where I live.

Regarding your question as I read it, you NEVER want to own rental real estate in your own name (I use LLCs which are expensive but I value my sleep).

I am also not a fan of portfolio loans for legal and market cycle reasons.  I know of large landlords who got into massive trouble during the last downturn with these loans even though they were current on all their properties.  The bank still called the loans

Hope that helps and keep on eye on Hudson for me!

-Ross Williams

I could not disagree more with those who disparage free advice, especially that given here on BP by experienced investors who want to help others, especially those just starting out.  I had plenty of mentors when I started, and even though I came from a Wall Street background, their generosity in sharing knowledge gleaned "in the trenches" has been invaluable, and saved me thousands of dollars.  I try to pay it forward when possible.  The real estate pie is big enough for everyone and its important to look at the business (and life) from a perspective of abundance, not lack.  There will be plenty of voices (the most dangerous of which are the ones in own our heads) saying "it can't be done, the market is saturated, there are no good deals left, etc."  It's been said here repeatedly but bears repeating again; there are no secrets to this business.  It's like dieting:  it's simple, but it's not easy.  Its a matter of putting the work in and persevering.  Free advice...

Andres,

I have couple properties in East Boston that I have done varying degrees of rehab to.  Get a contractor that has a few connections with the building department in Boston; this will smooth and likely accelerate the permitting process.  Ask your architect as well.  It doesn't hurt to go in to the building department personally and introduce yourself if you plan on doing future renovations in Boston.   It is time well spent to cultivate a relationship with these folks.  The City requires a permit for any kind of plumbing (technically, even the replacement of a toilette) so plumbing is what I would give a bit of extra attention to.  Hope that helps.

Richard,

Congratulations.  I have a lot of experience as a multifamily investor in Dorchester.  Tenant selection is Rule #1.  Rule #2 is, don't forget Rule #1.  There are different things to consider depending on if the tenants are market tenants or Section 8.  Regardless, politely let the tenants know that there is a new sheriff in town and that rent is due on the 1st of the month.  If its one day late, send them a Notice to Quit immediately.  Does that sound harsh?  It isn't.  Set the tone immediately.  Take pictures of each unit's condition and complete an inspection checklist as suggested by @Diana Hoffman; have the tenants date and sign them.  Have a good eviction attorney lined up, who you hopefully will not need.  Read your inherited leases carefully.  If there are late fees built in, collect them as per the lease.  If you inherited great tenants, I typically don't raise their rents to market; I keep them just below.  I assume your tenants are not Section 8, as you said the rents are well below market.  If they are however, know the City's inspection rules/requirements; your tenants will.  If in doubt, there's no question that can't be answered by the good folks here on BP.  Good luck!

Colby,

A few things to consider:

1)  What are the terms/interest rate on your student loan debt?  You may be able to arbitrage the differential if your investment property has a cash-on-cash return that is appreciably higher than your student loan debt service.  

2)  Make sure you are comfortable being a landlord.  Its not for everyone, especially if you are new to the business, and never forget that even with a smaller purchase, it IS a business.

3)  Consider buying a four+family building, which is considered a commercial property; lenders will look at the cash flow of the building rather than your personal balance sheet when evaluating the loan.  Then you can continue to live at home until you've had some experience in rental real estate.  

Best of luck and don't get too attached to that day job, even though you you're happy with it.  It doesn't take many properties to replicate your current income and be your own boss!

Investing in properties that produce negative cash flow is not real estate investing; it is real estate speculation.   

As a professional Boston area investor, I continually hear of Chinese and other international investors from decelerating/unstable economies, many with weakening currencies, driving up the prices of new-build, Class A residential assets.  Many of these investors are not looking for return on their capital (as evidenced by low single-digit implied cap rates in these properties and record prices/square foot) but rather return OF their capital, as Boston is internationally viewed as one of the most stable real estate markets in world.  The potential of increasing U.S. interest rates will only accelerate this phenomenon.  Until it doesn't.  When this happens is anyone's guess, and while I'm probably a year or two early,  I would be a net seller of downtown luxury residential properties in this market.  I've seen this movie...

Welcome to BP Fiona.  

I own multifamily units in Dorchester (Section 8), South Boston, East Boston and Lynn.  My experience with Section 8 is that an investor needs to own multiple units (25+) to leverage operating expenses as the city of Boston has tightened its inspection standards and imposed new annual $500 fees per building for owners.  Tenant selection and an experienced, trustworthy management company are the make-or-break variables in the P&L with Section 8, as well as having a very good (read "pit bull") eviction attorney.  A well run Section 8 building should have an approximate 35% operating expense ratio over time, so while I like the 50% rule for new investors, its extremely difficult to find properties that pass it.  I target 12-15% cash-on-cash returns for these properties, given the management-intensive nature of Section 8.  I have been selling in Dorchester as the market is at or above the last peak and owner-occupant buyers (rather than investors) are coming into the market which is typically a good "sell" indicator.  Section 8 is an early cycle asset class, in my experience, and the market is well past that.  Lynn is a more diverse market comprised of Section 8 and market tenant buildings, especially near the ocean and the Swampscott line, but again, I'm selling the former for the same reason as Dorchester.  South and East Boston are two of the hottest markets in the city but would be better long-term holds in my opinion but very tough to find good deals.  I'm starting to look selectively in Chelsea which still has some value so you might start there.  Just my two cents...