All Forum Posts by: Timothy Allen

That is great! I am from Western Mass (although not that far west, lol), good luck! 

Yes. It is a condo without the association or fee. Although it is acceptable to form one, most do not. A real estate atty should be able to answer your questions. As far as your age, and retirement, my husband and I just got started with the 401k type investing at your age. We have watched it soar and plummet. We do not have time in our 60's to let it soar again. You may, but there are also penalties to consider if you touch it prior to retirement. Harvesting from the 401K should mean that you have exhausted every avenue and you are about to starve to death. Please, do not borrow from your future. You do not know what it holds.  If you were my son I would beg you to consider other options. Consider it part of your overall portfolio. 

I love your ambition but proceed with caution. If you have other rentals you are making me nervous about using a HELOC on your primary and possibly your retirement fund. If you have could you force equity and increase its value? Then, you can use your non-primary residence(s) to secure the loan. Also, In Massachusetts, the deed can often be divided on a duplex leaving you the ability to sell one side. Retirement comes on more quickly than we expect at times. You are at risk of overleveraging for your age. Sorry. Maybe selling something and trading up would be a better option.

Hey Kris!

My office has a company out of it with one of the larger property management portfolios. Universal Property Management would be happy to meet with you to go over the market and how they work.

I am sure they also can provide a list of current and past property owners that have their units with them.

Hope that helps!

@Timothy Allen when I say networth ROI I mean make sure you add into your "return numbers" the following:

- loan paydown

- appreciation with a 2-4%/year assumption

- tax benefits of depreciating your home and getting part of the rental income tax free

I have a great spreadsheet that I can send you to help calculate all of these things. Reach out via messenger with your email if you want me to send it to you

Make sure you have enough in reserves for surprise repairs AND vacancies.

Where are you getting your down payment? Hopefully from savings. Then you could get a HELOC on your primary to use for emergencies

@Timothy Allen breaking even on a cashflow is a huge success right now. Also I would strongly consider trying to get the house under contract BEFORE they spruce it up. Also you could look for single family homes where you could create a separate unit to rent out if there is not a lot of multifamily around you. Some more thoughts on cash flow and a "good" deal:

House hacking is tough to cashflow in year one (with current house price run-ups and interest rates) for a couple reasons:

1. You are living in one of the rentable units

2. You are only putting 5% down so your loan amount is much larger and therefore your mortgage payment.

I would consider your net worth ROI. What I mean by this is considering how much your down payment returns to your net worth (appreciation, loan paydown, tax benefits, AND rent avoidance). Don't forget to include rent avoidance in your numbers! You have to live somewhere.

You may need to lower your return or cashflow expectations so you can get into a house hack that will allow you to avoid throwing rent money away every month. You know this, but don't forget all the other ways real estate makes you money. Paying down your mortgage and owning an asset that will appreciate over the long term.

Hi @Timothy Allen, I really like your style and I completely agree - reverting back to house hacking whenever possible is never a bad decision as long as it works for the family. I'm glad to hear that you're considering this option for your next investment. I'd be more than happy to take a look at the numbers for you and run all the available comps. It sounds like you're close to making a great deal happen. Let me know how I can assist you!

 Yes, exactly. If and when you decide to move out the property I'd hope to cash-flow strong. Unless you're predicting good appreciation, job growth, town improvements, Amazon building a warehouse, etc... which is speculative at best.