All Forum Posts by: Tyler Munroe

Hi @Brittany Myrick!

If you're looking to scale and take full advantage of house hacking, look for a property on the larger end of the spectrum, ideally 4 units. This will still qualify for a residential mortgage and you have a better shot of completely offsetting your entire payment. You used to easily be able to do this with 2 unit properties, but with prices and rates today it's hard to make this work anymore, unfortunately. Since you have scaling in mind, the larger properties will better suit your needs, IMO.

Happy to connect and chat more if you'd like.

Definitely look into HELOC/cash out options, but if those don't work in terms of rates or availability I'd suggest using the existing cashflow from your multi to offset a primary mortgage, and then find a primary with an ADU. This way, you would have two income sources offsetting most, or all, of your mortgage payment. ADUs will be legal, by-right, state-wide starting in February.

Hi Marquise - congrats on paying off your debts! You may run into issues trying to take a HELOC out on an investment property, and even if you can I doubt you'd want to use it for a down payment for a primary because the rates are much higher.

What kind of cash flow would you be generating from your multi once you move out? Are you looking to stay in the Boston area?

Hi Sathya - from what I'm seeing Lowell may be the only cash flowing market in Middlesex County, although I'm not as familiar with southern towns like Framingham. Generally, the further you get out of the urban center, the more likely you are to find cash flow. Those buying close to the city are either breaking even or taking negative cashflow and banking on appreciation (or buying all cash and parking money, ha).

If you do consider Lowell, I'd also recommend you check out the Fitchburg/Leominster area as well. They're not much further away and have similar, if not better, rent to price metrics. Keep in mind all these markets are very different than the Cambridge area in terms of tenant base, household income, transit, etc.

Happy to connect if you'd like to chat more!

Hi Renee,

Have you heard of the Affordable Homes Act in MA? It makes ADUs under 900 sq. ft. in SF zones legal BY RIGHT, statewide, starting in February. This means you can buy a SF and convert or build a separate unit. If you're looking to stay in the area and want to build equity creatively, I'd recommend looking for a live-in flip with an ADU. This way you can fix up your primary residence to build equity and also add a cash flowing rental. There's a bunch of houses out there with "in law" units that make ADU conversions simple and affordable. After it's rehabbed, you could then rent both units and use the cash flow to offset another primary residence or potentially refi and use those funds to scale your portfolio.

I wish this policy change was being talked about more because it unlocks a creative new strategy for investors in MA, since you do not need to owner occupy to do it! Feel free to connect if you need any more info.

 From what I'm seeing most listing agents are still paying buyer agent fees, so likely would be free to use an agent as a buyer. If they aren't you'd be responsible for paying the 1-3% that an agent would charge, however you can negotiate that fee now. Either way, an investor friendly agent that knows the market will be extremely beneficial given that you're coming from out of state and may not be familiar with the area.

Hi Eder,

Typically the closer you live towards Boston, the less you'll offset your mortgage when house hacking. For instance, if you bought in Medford/Somerville/Cambridge you may still be still be paying quite a bit out of pocket for your mortgage, but if you pushed out further to Lowell/Haverhill/Lawrence, the income from the other unit(s) may cover your full mortgage.

Either way, it's a great wealth builder and I highly recommend it to all my clients if they can do it. Feel free to connect if you'd like to chat more about it.

Hi Linda! If you're looking for those returns in the greater Boston area you will definitely have to push out a bit - think Lowell or even Manchester, NH. Anywhere closer the CoC is looking like max 5% for on market deals, if they even cash flow at all these days. I feel a better metric in this market is total ROI which will factor in CoC, mortgage paydown, and appreciation. Happy to connect and send you my property analysis spreadsheet if it helps.

Hi Misola! Congrats on your first project. I'm also just north of Boston and have been investing here since 2013. This area is an amazing place to live, and for that reason highly competitive in terms of real estate investing. Happy to chat with you more about any questions you have about growing your portfolio in this area, feel free to connect!

I think you're on the right track with Lowell - that's consistently been one of the most affordable markets in the greater Boston area when you consider price to rent metrics. If your goal is to offset your mortgage with a house hack then Lowell would be a good bet, but if you're looking for a longer term appreciation play then the areas closer to the city would be better, although the offset from cashflow may be lower than what you're looking for.

A good step for you would be to dig into specific areas more as @Lien Vuong noted above.