Massachusetts Bound - Best Creative Solution?
Hi -
I'm been lurking about on the boards, trying to absorb as much of this terrific info as I can. (I have literally sat in front of my computer for hours upon hours, reading until my eyes were reading to drop out of my head - well, maybe not so literal, but you know what I mean).
I am currently in AZ, heading back to my homestate of Massachusetts very soon. As soon as I sell my home here in AZ (I have to decide today on an offer I've received - if I accept, I'll be heading back at the end of July), I plan to get John Locke's Subject To course (and thank you John, for all your help!!)
So here's my question, guys - I'll be coming out of this deal with around $150,000. I'll need a place to live in MA, preferably in the greater Boston area - jobs are more plentiful, and there is a transit system (may I never complain about the MBTA again!) for my (young adult) kids to get around. This kind of money is a hefty down payment for a home there, but do I want to tie up all my money? Still I want to be sure I can make the payments if I get a loan...
How would YOU use this money? I made the BIG mistake of losing money when I moved here from MA two years ago, and I cannot do that this time. I'd like to use it to start my creative RE investing career.
I have been considering renting for awhile, to give me time to start searching for motivated sellers - BUT I have three dogs, and rent anywhere within 30 miles of Boston will cost around $1200 UP - with added fees for the dogs, IF I can find a place that'll accept them. Then there's the credit check - been working on my credit, but my score is still way low...
Any creative ideas from some creative investors?
bostonbabe,
I really must be losing it, you mean I helped someone who didn't buy my materials.
I know I sent you to my "if you are breathing I can get you qualified for a house loan friend" or you can get creative in finding a home for your family you may like that plan better.
I will put the word out with some of the folks in MA and see if they have anything that will help you or maybe someone on the board has something that wil fit your needs.
Just don't post it here if you have something to help this young lady, you all know the drill.
John $Cash$ Locke
[addsig]
Bostonbabe,
I am from Mass and have been a rei for about 1.5 years. If you have not been around for a couple of years not sure if you are aware that the housing market has been crazy. Anything within 30 miles of the city is outrageous in price and the best markets are 40-60 miles out where you can find more affordable homes.
If you can find one I would suggest finding a prop to lease option for a year or two. If you get a motivated seller you can probably lock in at a below market price and be able to cash in on the appreciation if any in a couple years when you buy or if you want to harvest that equity just sell it on a simultaneous closing and re-invest that money. The thing I would not do is lease option with a purchase price based on future value unless the agrrement is based on future value as determined by appraisal. There is some speculation that the Boston area can not sustain the homes pricing and will decline over the next couple of years. If you can get in on a good lease option with low down payment you can use your 150 to start real estate investing.
TBARBER
Wow, came back from my walk with my dogs, and two responses already - you guys are terrific!
John, you are a gem beyond words - and I truly mean that. But heck, I better not get all gushy... but I want you to know that I really appreciate your help, believe me.
TBarber, yeah, I know about the market in MA. Actually, I sold my home back there just about two years ago, then moved out here to Tucson (I lived in Malden for a zillion years). I made quite a bit of profit after we did our own rehab. Got est. selling prices fr. RE agents of around $150k, then after the work we did, I ended up with $269K. But of course, after the RE fees, taxes, this fee, that fee (I swear they had a clause in there where I had to pay every other lunch that every single member of their RE agency had since 1969), moving costs, etc. I didn't end up with all that much. Since this was an inheritance, I am determined to make this money back.
Yes, I think the MA bubble will burst eventually. The L/O is a good suggestion - but the market is so hot, I wonder I can even find any. The problem with going further out fr. Boston is transportation for whoever will be with me, but I may not have a choice. Hey, I considered going out to Fitchburg (we lived in Templeton for a season), but is Rte 2 still as bad as it used to be? Personnally, I think it's intentional - western MA is just about forgotten by the MA gov't!
Forgive me - I'm rambling. I have to decide on an offer (actually counteroffer), complete with the legal mumble-jumble, on my house today, and I am trying not to be stressed, but believe me, I AM WIRED. :-o :-o :-o But I'm not as bad as I was two days ago. I didn't think it was possible for the brain to think of about fifty things at once, but mine was.
Hey, I might be getting a van to travel with my dogs across the country. I could always live in that for a while. :-D [Hmmm - I'll add that to my list of All The Things I Could Do to Embarrass the Heck Out of My Kids].
Here's my two cents:
First off, I wouldn't hold your breath for much-heralded bursting bubble in Beantown (How's that for alliteration---putting my English degree to good use).
Personally, I don't see it happening. The pundits have been forecasting a metro Boston area RE market collapse for the past five years. Hasn't happened. I think the best buyers will see it a plateau in prices, and then single digit growth going forward. But a bursting bubble? Not in a coastal area like Boston. In fact, once the Big Dig's done, it should make the area even more attractive. And the hoards of transplanted students who attend college here and settle down after graduating will continue to fuel the RE economy.
But that's just my humble opinion.
As for what to do with your 150 G's, I say buy a multi-family, where you and your family can live, while still collecting income with your investment.
One particular area I'd suggest is West Medford. It's experiencing quite a resurgence and has been dubbed the next Davis Square. A 2 family with 2-3 bedroom units will cost between 500K - 550K and you can rent a unit for roughly $1400 now and $1500 -$1600 when the rental market picks up.
If you're a risk taker, then you can get much more for your money just south of Boston in Dorchester. Now I know Dorchester has a terrible reputation and deservedly so, but it's in the infancy stages of a complete rebirth, much like Jamaica Plain and Somerville went through in the 1990s. I'm sure you remember when Somerville used to be Slum-erville. Well those days are loooong gone. Prices are outrageous. Anyway, many pick Dorchester as the next Somerville. It's currently experiencing tremendous gentrification. The reason for this is it's one of the last areas in metro Boston which is less than a few miles to downtown and still affordable. A 2 family in a nicer area of Dorchester, say Savin Hill, should run you $400K - $450K and rent for $1200.
Myself, I own a few multis (Watertown, Arlington, Waltham) but these areas are pricey $600K - $650 for a decent two family. I also live in a 2 unit multi in Watertown and rent the downstairs unit.
Hope this helps.
Take care and welcome back to Bawston.
Also, be sure to bone up on your accent, so you'll be able to blend back in.
Go, Sawx.
[addsig]
I know absolutely nothing about the Bawston market so I have no local advice to give you but I will weigh in here with a few words anyway.
I live in a BIG loft apartment in Chicago in a tough neighborhood that is next door to one of the hot urban markets. Six years ago I bought the building for $225,000. Most of the building we built out as soundproof rooms for rock and roll bands, leaving only my 2,500 square feet as residential. Last month I got offers at $1.3 million.
Now, not all of that is profit but we did it with $125,000 in rehab money with nothing down on a lease/option. So everything over the $125,000 has been "retained earnings" from the rehearsal space business.
Just got word last week that the $40 million dollar condo conversion in the next block got their final approvals. Guess that might improve my value even more.
The point is that if you are willing to be a little creative in your living arrangements there are all sorts of investment/living arrangements that will make your $150K go a long way.
Thanks so much for the input, guys. I really appreciate it.
Monkfish (love your name, by the way), what you say makes a lot of sense. If I can get loan $$, then I am leaning towards a multifamily, as long as the numbers work (and if & when I get to that point, I'll be asking for help in figuring all that out, believe me). The Big Dig is near completion (ah, but that's what they want us to think, right??), and yes, I agree that property values could go up.
I wish I had the know-how to invest years ago - I can remember when I was down at Castle Island in Southie [for all nonBostonians, Castle Island isn't really an island - it's a park right on the ocean, sort of a mini-penisula) many years ago, when my kids were little. I had one of those intuitive moments where I KNEW the property value was going to skyrocket, but we had absolutely no money, and it was back in the dark ages before computers...
I'm not sure about Dorchester. I think it's the only place I've been where I just cannot figure out the streets - maybe I just haven't spent enough time there, but when I have, I have gotten SO lost. But when I get back, I'll check it out. (hopefully I won't end up like Charlie on the MBTA (Lord, am I ever showing my age...).
West Medfud's a good idea. I'm orig. fr. Malden, & Malden and Everett are good, also, at least I think so. I don't think I'd go wrong with any of those areas.
[I have been told by some that I don't have much of an accent, but others disagree. However, I can say, "I pahked my cahr in Hahvid Yahd" as well as the next Bahstonian - and I really did, years ago - actually right next to Harvard Yard - when it was free parking.
Commercialking, I envy you! I would LOVE to undertake a project like you described. Who knows....
If only I had invested in the South End before it became the hottest area in Boston. But then, Monkfish, you may be right about Dorchester.... I would love to be able to rehab a building that was once commercial to living spaces, esp a huge loft like area for me, the dogs and visiting kids. I think citylife would suit me fine...