All Forum Posts by: Steven Caligaris

@Samuel North

I’m fairly new and am currently buying my first property (duplex in Worcester). A few points that haven’t been mentioned yet that you can take with a grain of salt based on my experience:

1. A two family that needs less than 30k rehab in Worcester is going to be 350k+ easily in a good neighborhood. Keep in mind that $30k will need to cover closing costs as well.

2. The Worcester multi family market is incredibly competitive and most homes go to cash buyers - so getting there fast and/or finding off market deals is more advantageous.

3. Depending on your income, I'd HIGHLY suggest looking at the Masshousing loans. In Worcester you can qualify for first time home buyers loan if you make less than $101k or the Masshousing conventional loan which has an income limit of $128k I believe. Both are so much cheaper than FHA as FHA has so many fees.

4. I went the more extreme route for my first property and am doing a Masshousing rehab loan. I would recommend that as an alternative way to get into the Worcester market as you’ll be able to broaden your scope of properties to more distressed ones. Note: Itll be very hard to make a profit as the homes will be pretty well priced and not leaving much room. But if you plan to live and rent the other unit(s), I think it’s way better than spending $1200+ on rent and setting yourself up for capitalizing on the appreciation.

5. There are a plethora of people in the Worcester community that are incredibly nice and are willing to take the time to teach/guide you. (Even those that have already posted in this thread) Take advantage of that. Also, join the FB Group "Black Diamond REI Insiders" if you haven't already. It's a FB group for MA folks.

Best of luck!

I’ll play devils advocate here...

Would a crappy car signal to the tenant they shouldn’t have to worry about keeping their unit super clean because the landlord is in a raggedy car?

I’d assume it would be dependent on the status of your tenant and how well off they are doing too.

(I personally do not have a new car nor do I see the value in having one. I’d also be a little self conscious about showing up in a 50k+ car. But I thought I’d add my 2cents since most are saying tenants would perceive a nice car negatively.)

@Jonathan Santiago thanks for the recommendation. I’ll have to check them out!

I appreciate the time to help me out.

@Lien Vuong thanks for the tip! I’ll join right now 😊

Hello!

I'm looking for great masonry vendors that you may know of in the Worcester Area.

I am purchasing an older home (1938) that is stone foundation that I suspect will need some work. In addition, the walkway and stone stairs will need to be redone as well.

Masonry is one of the harder vendors to search for reviews so I was hoping BP users may have some contacts they would like to share!

They will need to be licensed and insured.

Thank you very much in advance.

Originally posted by @Jeffrey Allen:

Is there anyone familiar with the Masshousing loans?  If so:

1. Are the income limits based on gross or net?

2. Is income W2 verified or Pay slip verified?

3. What are the loan limits for Boston, Waltham, Salem? Just Boston is also fine.

4. Has anyone done the online classes?

Hey @jeffrey! I'm actually smack dab in the middle of this process myself - I got a multi fam offer accepted last week and I'm using a Masshousing loan.

 1. The income limits are based on gross.

2. Good question - I believe they take into account all income types. (see email below from MH support)

3. You can find the income limits on their website. https://www.masshousing.com/ho...
Note: There are two income limits. There is the qualified income and then the compliance income. The income limits they mention, I believe, are in regards to compliance income as they encompass all your income.

Note 2: Each Masshousing product has their own income limit. For example, Masshousing First Time Home Buyers (MH FTHB) has a smaller income limit compared to the Masshousing Conventional Mortgage (MH CM). To further complicate the matters, they have something called "gateway cities" which have incomes that are generally higher than regular ones.

I'd recommend going to emasshousing.com and poking around there. Happy to help further if you need to.

4. I have not done the online classes yet, but will be over the next month or two. I'll come back and comment on them when complete.

Here is an email from Masshousing i got this week.

Income - MassHousing accepts gross annual income from all sources annualized forward, which is earned or received by the occupant borrowers. Income includes: annualized income from full and part-time employment, taxable and nontaxable income, earnings, overtime, bonuses, dividends, interest annuities, pensions, VA 2 HO Announcement |2020.01 compensation, commissions, deferred income, welfare payments, Social Security benefits, disability payments, alimony, child-support payments, public assistance, sick pay, unemployment compensation, income received from trusts, net rental income from the subject property, business activities, investments, and all other sources of income. Nontaxable income must be included at an amount used to qualify, which includes the grossed up amount, if used to qualify.

Quick reminder on multi-families:

1. There’s a 3% borrower contribution requirement and dependent upon the findings they may need 3-6 months reserves.

1. Homebuyer Counseling is required for all first-time homebuyers purchasing any property. ALL homebuyers purchasing a 2- to 4 family property with financing provided by MassHousing or insured by MassHousing’s Mortgage Insurance Fund are required to complete a landlord education curriculum either included in the homebuyer education program or offered as a separate homebuyer training. Education must be provided prior to the loan closing.

1. Please keep in mind that Fannie only allows the rental income to be used for borrowers with a current housing history. However, regardless of whether you use the rental income to qualify or not, 75% of the projected rents needs to be factored into the compliance income.

Good Morning!

I am researching contractors for a rehab loan in the Worcester MA area.

I'm looking to see if anybody has had any good/bad experiences of contractors that they would be willing to share.

Possibly some you would recommend to a friend and some of which you would stay clear!

Thank you,

Steven

Originally posted by @Wayne Brooks:

A HML is Still a financed purchase, plus HML's can't lend on owner occupied.

 Great feedback- I suppose this takes out the possibility of a hard money loan as it will not be shown as a cash offer nor will it be able to be owner occupied. 

Hello BP team!

I've been exploring the idea of hard money loans and I believe they are right for some situations and some they may not.

One particular situation that I've come across - that I am in as well right now - is the market is hot and cash offers are being accepted first over conventional/FHA loans.

I'd like to get feedback for those that may be in this predicament.

Question: If you have cash for 10% downpayment and are already preappoved for an FHA loan but cash offers are getting first priority, would a hard money loan solve this problem? If not, what other creative ways can you think of to match the attractiveness of a cash offer?

Hello!

I'm trying to accomplish my first transaction this year and would love to invest (owner occupied) in a multi family property ~350/400k but capital is a problem. I have about $40-60k cash that i could use but would prefer not to drain it all.

The problems that I am encountering are:
- most multi family are being sold quick and above asking price (super competitive due to low supply and strong market)
- I cannot provide an all cash offer which puts me at a disadvantage
-I'd like to purchase a home that i can put some sweat equity but it would be hard to qualify and FHA loan for that type of home and i don't have the capital for 25% on 400k = $100k

My proposed solution:
- Have a family member (lets call him Bob) use their HELOC to buy the home with cash
- Then have him sell the home to me

My questions are:
1. Is there a way when Bob buys the home that I could be put on the title as well?
2. Then after we've bought it and i've used my capital to renovate, can i then get a refinance to pay back Bob his initial investment?
3. Would it be possible to then remove him from the title?
4. Can I refinance without putting Bob on the mortage if he is still currently an owner of the home?

Any guidance is super appreciated!

Thanks,
Steven