All Forum Posts by: Sergio V.

@Francisco Feliz where is this property located exactly?

1) I would try to keep the units separated per floor (each floor being a unit). Most likely the current setup is illegal. Whether you rent to families or roommates you should have only one lease per unit/floor (jointly and severally meaning all occupants are responsible for the lease and implicitly all the rent as a group, not individually). Depending on your situation, I would suggest renovating and occupying the top floor.

2) Absolutely not. Take over the property, stabilize and renovate it and go for higher quality tenants. Of course, you can try to teach an old dog new tricks by running the old tenants' credit, writing new leases, collecting deposits and demanding one check a month but odds are a bit against you

Good luck!

@Mike Hurney Very possible. Unless I can make the numbers work "properly" I would go for short-term deals with a 6-10 month market exposure. I think we agree we all see absurd stuff out there lately...

@Frank Vent where is the property located? When you say 14% ROI, is that based on the asking $1.2MM price or your desired $900K price? Is the 14% the cap rate or cash on cash after the $200K down payment? Does the property need work?

Please provide more details. 

Thank you

@Mike Hurney I have not but I saw what they got it for and I know what I passed on. To me it's so far off what it would make me do a double take on it that I didn't bother. Someone with a retail mindset would look at this quite differently, no doubt. One of them is over $400/sqft.

@Mike Hurney Hahaha, I would go with much more than that... Or walk away altogether. However, looking at it this seems perfect for an owner occupant, doesn't it? The owner takes the back house, rents an entirely separate structure. If @Michael Quigley can live with the location I definitely recommend working on the price. Like someone I know says "today's market is in dog years" - anything still active after that long should scream price reduction.

Good luck!

@Rich Hupper of course (provided that you resell for more than the loan amount), it works just like any other mortgage - you only have to return what they financed plus whatever points and interest you negotiated.

Rich, hopefully you figured out the problem with your math based on Jeff's post above. Do not confuse net proceeds with net profit - very very different numbers :)

Also, your hard money costs are high, both the upfront costs (should be 2 points on, 2 points off or, if you negotiate right, just 2 points on) and the interest (shoot for 12%). Please do your due diligence and don't get taken for a ride - the fact that you don't know yet whether you'll have to make monthly interest payments or you are getting a balloon loan is a red flag someone might try to take advantage of you.

PM me if you need more help. I can analyze the deal for you.

Regards,

S

Sadly this was yesterday's news: http://www.boston.com/news/local/massachusetts/201...

Same street, just sayin'...

I own property in Southie, have been buyig and selling some there since 2003. I have looked but not bought in East Boston in 2005 (a blessing) but also in 2010-2012 (a mistake). As recently as last week I have passed on a 6-unit in Maverick Square shopped around (off market) at just north of $1MM, knowing I can get it for under that. It needed some work (some structural) and it was not in the same shape as what you are looking at.

I am telling you this because I want to make it clear I am hardly an expert in East Boston. I have always regarded it as a high risk value play due to issues with access to the rest of the city as well as less than stellar demographic. I am trying to stick to A and A- neighborhoods and only Jeffries Point barely fits my criteria. Which, in today's market is overvalued in my opinion. I have just briefly looked at the rest of the stuff and it seems even more overvalued to me. I personally would not buy hoping it turns into Southie. 

To me, Southie had much more potential 12 years ago which is why I have been in there since. Of course, Joe Fallon's vision of Seaport helped that tremendously. I just don't see the same potential for East Boston and I would stay far away from the Chelsea border, that is in my opinion the last area to appreciate there. Similar to Andrew Square 10 years ago. 

Again, take this with a grain of salt. Run your numbers, walk around a bit to see who your potential tenants would be and assess your risk tolerance.

Good luck and keep us posted.

Sergio

I hope it's in Jeffries Point, in my opinion one of the (very) few areas in East Boston worth considering.