Hey all
My name is Jay and I’m looking to get into owning rentals in MA (duplexes and triplexes). I’ve been scouring the area looking for deals that will give me at least $100 cashflow per unit monthly, in addition to picking up at least 30% of equity in any purchase.
This has led me to a few properties, but they aren’t in the greatest of areas. Should I be overly concerned with the neighborhood dynamics or will hardcore screening of tenants be good enough to justify a purchase?
Jay
Most tenants don’t live in the greatest of areas. If they did, they would be owners instead of tenants. I wouldn’t buy where bullets are continuously flying, but relatively low income areas are where the tenants are.
Good Luck,
Mike
I look for bluecollar neighborhoods. I want guys that are auto mechanics, or when I look down the street I see white vans for A/C repair, and plumbers and painters. These guys don’t live in the best neighborhoods, but there are not bullets flying and drug dealing going on either. Remember what Sam Walton (founder of Wal-Mart) said. Sell to the classes and eat with the masses, sell to the masses and eat with the classes. In human speak he said you can get rich selling to bluecollar people. If you sell to rich people you have to remember they didn’t get rich by giving you their money. The closer to rich your constituents get the more trouble you will be having making money.
Hey Jay. I’m in Pittsfield,Ma. Where are you? I’m also a newbie in this field. So far, a lot of reading but no rentals. I’m thinking of getting a property management company on board from the beginning. You have to assemble your team first…( actually you have educate youself first). Read " The Millionare Real Estate Investor" by Gary Keller. This site is awesome also. Don’t worry about the deals. From what I’ve read and seen, As you get more educated in what to look for you’ll spot what some others miss. I’ve heard that you may have to look at 100 properties just to find one where the numbers work. Be patient Danielson!!!
Mike
phlemboy- Hey, I have a friend from college that lives out in Dalton. That’s right next to Pittsfield, right? Anyway, I live in Brookline but I’m looking in the Worcester area. I’m pretty well educated, I’ve done my homework. I’ve got an agent, funding, and if need be, contractors to do a little rehabbing. Everything is lined up, but my first property. I’ve already seen a few, but nothing that would work for me yet.
JayHa,
I won’t buy a property for a rental that I won’t live in myself. Consequently, I have a little different composition in real estate portfolio than Bluemoon and propertymanager. My properties tend to be in neighborhoods populated by white collar folks. Parking lot has a lot of sedans and SUVs, very few pickup trucks. My town car won’t stick out like a sore thumb if I lived in one of my rentals.
I admit that my ratio of rental income to purchase price may be a little lower than propertymanager or bluemoon, but I believe I tend to get tenants who stay longer than they might in a lower rent neighborhood. On the other hand, I suspect that my vacancies tend to last a little longer than I might experience in a downscale property.
Come to Springfield MA there is 3 and 4 families for $30 - $40 k right now. Lots of bank owned.
Springfield is a pretty big hike for me from Brookline. Probably close to 2 hours. Would it be a bad idea if I looked into properties that far away for my first purchase?
Jay
Springfield MA is pretty bad. 20 or so murders last year lots of section 8, city is almost bankrupt. Used to be a great city, too bad.
Hey i didnt get to finish typing and it posted. ?? Well anyway the city has lots of units but your right being so far away with all the problems may be tough. Are you near Worcester? Pretty good area, kind of blue collar. My family grew up in Spfld, actually in a 3 fam. Sucks because that same street you would question living on now. If you have a good property manager or are an experienced landlord it could still be a good place to invest.
I’m bout 60 miles from Springfield and according to Realtor.com there are a lot of multifams. I laso work there sometimes. I worry about the crime, murders etc… I wonder if a good property manager would be enough? I’d like to know the vacancy rate. That’s a relatively large city. What would it take to get you guys to invest there?
You are going to have a hard time finding a really good property manager to work in a high crime area.
Good managers have all the clients they want. They don’t have to risk their lives to run their business.
you’re in the right place patience is the key
I have 2 fam in springfield and it’s been a rollercoaster
crime ,vacancy it all comes with the territory
some less some more but everyone gets it
I’m in Boston and if I purchased before I knew what I know from this board and joining my local reia 6 months ago
join the Boston area Reia ,connect with other successful investors
remove the guess work , and minimize mistakes reading this forum and spending your money are 2 different things .
you want to be just about certain you will profit wherever you buy
Good luck
Urban Investor- I’m more or less in Boston too. I live a couple miles from Fenway. Do you invest in the city? It seems the prices in Boston still make it near impossible to find profitable deals. I’d also be curious to hear how you got started if you care to share your story!
Jay
I went to Springfield which is probably too far. The 2 family I have was before I started researching the market. There are rehabs,short sales and plenty of preforeclosures in the area now
I didn’t wait and knowing what I know now you can get a good deal closer . patience . marketing ,foreclosure list or an agent that knows of motivated sellers or finding some yourself
google Boston reia and check out a meeting or there’s a link on this site
Forget about the fenway area that’s for developers or the wealthy
we want bargain basement prices with plenty of room for increase
especially starting out
good grief, 20 last year??? !! We get that many in 1-2 months.
I’m originally from Monterey (the “suburbs” of Great Barrington)!
Keith
I focus on appreciation and cashflow. I won’t invest in an area that is flat or in a downswing just to meet my cashflow objectives. Cashflow is great but focusing on CF and appreciation will make your portfolio and wealth grow alot faster.