All Forum Posts by: Tom Wagner

Hi Marina, how did the investor fund the $700,000 rehab? I would imagine that after 5-6% for agent transaction fees + any hard money costs they didn't make much money?

Hi Jourdan! Welcome to BP. I'm in Boston but work closely with a few agents who do lots of business in Worcester. Paging @Andrew Freed and @Sabrina Sanchez !

Hi Ryan, I think this is an issue many investors are grappling with, particularly those based in Boston or other HCOL cities. There is no "right" answer and anyone who says definitively that in-state or out-of-state is better should be ignored IMO -- everyone's circumstances are different.

If you want to stay in the city (or close to the city) and house hack you can leverage better loan terms and down payment options to make a good investment even better. Alternatively, you could look towards Worcester or Providence or Lowell (etc.) to find a property where the numbers work better, while still buying a property you could visit 2-5x per year.

And out of state works as well! A regular attendee of the meetup I run has multiple properties near Tampa that he rents out and he's never even set foot at the property.

Lots of ways to skin a cat, though I am partial to local / regional investing and think it is much less risky even given the inflated Boston prices.

Agree with others who have said to avoid #2, the capital gains tax kills returns. Both 1031'ing the property and a cash out refi / HELOC sound like like great options to me.

And it's definitely tough to find deals that work in this market, but prices are softening slightly. In the last few weeks our team has secured two 2-4 unit properties for >= $50,000 below asking price. Additionally, making sure you have a really strong lender on your side can make a huge difference, and I know there are local credit unions / banks that are beating the standard 6.5% rates you see by over a point.

Good luck!

Hi Khalid, congrats on getting started in your real estate journey. I work closely with a recent graduate who is now working at Northeastern and in a very similar situation to you. He decided to focus on a 2-4 unit house hack which I think is a great strategy for you as well.

Happy to talk in more detail if you are interested!

Hi Jonathan and everyone else, please keep us posted if you have an in person meetup as I would be eager to join. I've been meaning to checkout New Bedford and Fall River but haven't made it down there yet

And I'd like to spend some more time in Providence / Attleboro

 I'd be interested in learning more about this if anyone has more information

I think tons of people are struggling with making the numbers work in Greater Boston right now, myself included. The recent run up in rates combined with the lack of a substantial pricing correction has caused cash flow to substantially decrease, often going negative for many properties.

If you buy and hold longterm the fundamentals still support real estate as a good investment: the Greater Boston population is growing and there is still a massive shortage of housing (as reflected in rent prices, now #2 nationally behind NYC).

I think neighborhoods in the path of progress (Roxbury, East Boston, Roslindale, Watertown, Everett, etc) are well positioned to continue appreciating if viewed with a 10+ year lens.

Good luck to you and others searching, and make sure you are working with an investor-focussed realtor to help you weigh all the factors that go into a successful house hack / investment.

Agree with others mentioning that every market is different. In Greater Boston it is ~impossible to find a mostly-turnkey 2-4 unit property right now that will cover PITI with just rental income. And it is important to keep in mind that cash flow is just one driver of your returns: you also are paying down the principal and reaping potential appreciation, though the latter is not guaranteed.

Investing in a property with negative cash flow can definitely work, and I view it as a sign to slow down and move cautiously: make sure the neighborhood is good, make sure the house is in good condition or that the current condition is reflected in the price, etc.

Hi Scott, a really tough time to house hack given rates and prices but there are still good deals out there to be had. I'd recommend targeting 2-families if using an FHA loan in order to avoid the self-sufficiency test.

The market is also cooling so you could work with your agent to target properties that have been on the market for 30+ days with offers well below asking price. All you need is one seller to bite.

Best of luck and please keep the BP community posted on what you are seeing!