Earlier this year, I helped a young investor make the jump from buying two-families to purchasing his first three-unit building. While that may not sound like an impressive feat, if you’ve spent time touring these types of properties you quickly notice the stark difference in caliber and quality as you move up in size.
Coined the “Spectacular Wedding Cake Henry M Brooks Cottage” by historian John Goff, 260 Lafayette St in Salem is nothing short of amazing. A stunning example of Gothic Revival Architecture, the building is simply one of a kind. High ceilings, paneled walls, gorgeous hardwood floors, diamond-paned windows, coffered ceilings, two fireplaces, and beautiful moldings are some of the original detail throughout.
Home buying can be scary! Especially when your first purchase is a 150-year-old fixer upper located in Salem, the Halloween capital of the country. Did I mention that it’s a multi-family?
The idea of becoming a first time home owner AND a first time lanlord is enough to send some people running for the hills faster than you can say hocus pocus. My cousin, Evan, and his wife, Meg, were ready for the challenge and enlisted me as their trusted realtor.
After contemplating a few towns in the greater Boston area, they decided that Salem made perfect sense for their commutes, lifestyle, and budget. The couple had more ties to the Witch City than you can shake a broom at. Meg had graduated from Salem State University and the couple married at a historic Salem venue last fall.
They were quick to whip up an offer on an adorable two-family in the incredibly charming Pickering Wharf neighborhood. The property overlooks the House of Seven Gables, a tourist hotspot, and is just a short stroll to the ocean, shops, and restaurants. The home hit the major items on their wish list being in walking distance to the commuter rail and having a good-sized yard for the dog. Not only did the property include a turnkey rental unit on the first floor, it also offered expansion potential into the attic with peaks of the ocean!
After a grueling multi-bid situation (which they won by the skin of their teeth using a strategic escalation clause and thoughtful note to the owner) Evan and Meg were under agreement.
Now is about the time when most buyers start to get a bit overwhelmed. House hunting and submitting offers is mere child’s play. Once there is an accepted offer on the table, things get serious. There’s no shortage of what-if games and second-guessing only to be followed up with moments of clarity and validation.
As to be expected, the due diligence process on an old two family home is intense. The mantra for the home inspection week was “double, double toil and trouble”. Evan and Meg had multiple contractors look at the house. We even had a plumber shoot a camera down the waste line to make sure it was up to snuff. They made friends with everyone at the building department and interviewed the neighbors. While it’s impossible to learn every detail about a house built over a century ago, it doesn’t hurt to do some basic research. No matter what property you buy, you want to go in with eyes wide open to understand the risks and potential pitfalls. But, at some point, you have to take a leap of faith.
Ultimately, the home had been lovingly maintained and the pride in ownership showed. It was time to move forward with the purchase and not look back.
Buying a multi-family property has some extra complexity. Signing up for homeownership is one thing, becoming a landlord is an entirely different ball game. As an extra service, I help clients strategize on the financials of investing as well as providing basic resources for being a successful property manager. To make sure the pair got off on the right foot, we sat down to discuss marketing the rental and vetting prospective tenants.
October is always a busy time in Salem, thanks to seasonal festivities. It’s been especially busy for Evan and Meg. Since closing, they have been hard at work on some sweat equity projects to get their house in tip-top shape while simultaneously securing a tenant for the rental unit.
Happy Halloween to these new homeowners!
A big thanks to my cousins on this review of our work together:
“We were so impressed by Dana’s knowledge and expertise when we finally decided to leap into home ownership. Because of her background she is able to connect with you, as the buyer, on many different levels. Throughout the process, Dana kept us informed, answered our countless questions, and shared her previous experiences both as a buyer, seller, and a realtor. Even when we got cold feet and sent a late-night email with a laundry list of questions and worries, she helped us to understand both the upside and pitfalls to buying an old two-family property. We often said that Dana was not only our realtor but also a source of emotional support with her pep talks. Dana’s work ethic, drive, and knowledge are unparalleled. She not only works hard to make sure the process stays on track but also to make sure you understand what is happening, when it is happening, how it is happening and why it is happening. Going above and beyond to help you get your home is just how she operates. She is truly an amazing realtor to work with.”
Once upon a time, Dusty and Marcela reached out to me about a rental ad in Salem. What, that’s not how most fairy tales start? Well, at least that’s were this story begins. The couple had recently moved to the area from Colorado and they were excited to be on a new adventure. In need of a landing spot to get their bearings, the newlyweds ended up renting out one of my apartments for about a year. Like most, they were quickly charmed by Salem’s history and incredible downtown and wanted to make the quirky city a permanent residence. I was thrilled when they contacted me to discuss buying.
We got to work quickly and identified a mix of single-family homes and condos within their price range. They were looking for something special, as they wanted the real “Salem experience”.
One home in particular stole the show.
We were all blown away by 270 Lafayette St #3, a penthouse condo in an 1880 Victorian that looks like it belongs in a fantasy world. The whimsical space is filled to the brim with character, including wide pine flooring, stained glass, built-in window seats, and an incredible turret. Yes, you read that right, a turret! A turret is a prominent architectural detail in a Victorian home that acts as a lookout tower. Complete with peaks of the ocean, this condo’s turret is reminiscent of Rapunzel’s purple castle.
Owning a slice of history comes with some serious perks, but it’s important to do some extra due diligence in order to understand the maintenance and pitfalls of owning an older home. During the inspection, we discussed ways to care for a home with historic integrity such as preserving a slate roof and choosing the right color schemes. As a fellow homeowner and property manager in Salem, I have an extensive vendor list of professionals who specialize in historic buildings and I am always happy to make an introduction for a client.
While I was sad to see two of my best tenants go, it was incredibly rewarding to help them land an enchanting piece of Salem real estate. Congrats Dusty and Marcela on your happily ever after and thank you for this fantastic review of the home buying experience.
“While this was not the first time my wife and I purchased a home, it was our first time purchasing a home in Massachusetts. Little did we know the breadth of knowledge we lacked in purchasing a home in the New England market. Fortunately, Dana has immense expertise in this area. From strategizing on offers to educating my wife and me on the inspection process, historical aspects of homes, etc. Dana was an invaluable resource in each phase of our buying experience. Without Dana, finding our new home would have been an arduous process. Dana’s knowledge, diligence, and responsiveness are unmatched.”
Are you looking to make a purchase in Boston or on the North Shore? I’m currently taking on a limited number of clients, please contact me if you would like to discuss working together.
Transaction Team Members
Lender: Adam Moore, Academy Mortgage Network
Attorney: Josh Karas, Karas Law Associates
Inspector: RJ Inspections
Growing up, my mom had countless expressions to keep us grounded. She would be the first to point out that “life isn’t fair” when any of us kids complained about something not going our way. You would have thought she was a back up singer for the Rolling Stones based on how many times she would break out the lyrics of “You Can’t Always Get What You Want.” As difficult as it is to hear (especially in a Mick Jagger impersonation) that “life isn’t fair” and that “you can’t always get what you want”, these are important lessons to learn. These themes are a constant in life and in real estate. Ironically, they couldn’t ring more true throughout my own sister’s home buying story.
Anyone who knows my younger sister will tell you that she’s charismatic, determined and high achieving. When Sarah sets her mind to something, she really goes for it. At 25, she decided it was time to buy her first home. Of course, she enlisted her big sis (yours truly) to represent her in the transaction. Sarah was a dream to work with, but due to high demand and low inventory her target markets proved to be any buyer’s worst nightmare.
Her condo wish list was minimal; all she needed was a pet-friendly building with parking and two bedrooms. Based on her budget and the desire to be halfway between downtown Boston and her office in Framingham, we decided to narrow down our search to Waltham.
It seemed like the perfect plan. The only problem was that every young professional under the sun seemed to share our same idea. Waltham is a happening place and home to several big names in tech and pharma. There are some trendy local spots as well as easy access to Boston. While the Boston area is a great area to live, the process involved in getting a place is easier said than done. (Spoiler alert, it’s not impossible!)
Sarah quickly fell in love with one of the first condos she looked at and we put together a strong offer. Not surprisingly, we weren’t the only ones and she lost a six way bidding war. I hate delivering bad news, especially to my sister. It doesn’t seem fair to want something badly and to be outbid by a cash investor. It’s a tough reminder that life isn’t fair and that you can’t always get what you want.
When the going gets tough, the tough get going. Sarah and I worked extremely hard for several months to nail down the most perfect condo. We wrote up countless offers, only to pull out when they escalated outside of her budget. She wound up opening her search to other areas and was able to negotiate winning bids in several towns, including Waltham. Ultimately, Sarah had her choice between a condo in Waltham and a beautiful home in West Roxbury. After going through the whole process, she discovered that when you try sometimes well you just might find that you get what you need.
Below are some of the techniques that helped Sarah win. They can help you too:
Be realistic about your competition
First, you want to size up your competition. Track recent inventory and look at trends in list price vs. sold price. Attend open houses and watch and listen to other buyers to gauge their interest levels.
Build rapport with the listing agent
Introduce yourself to the listing agent and leave them with a good impression. You always want to present yourself professionally.
See if the seller has any hot buttons
Does the home have sentimental value? Sometimes writing a cover letter to the sellers goes a long way. Are they looking to move quickly? Try to accommodate their timeline.
Figure out your absolute max budget
Assign a value to the home and do not go overboard when you start to get emotional. At some point, you have to draw a line in the sand. The hardest part for buyers is being able to let a place go if it’s outside their budget.
Fine-tune your terms
While you may be stuck on max price, are there other ways to strengthen your offer? Weigh the pros and cons of tightening up the language around the inspection and financing. There are ways to strengthen these terms without slashing them entirely.
Be the squeaky wheel
The squeaky wheel gets the oil is yet another one of my mom’s favorite expressions. Make sure that you’re reiterating your enthusiasm for the property. Often times, the “over communication” is what keeps your offer on the table.
Think outside the box
Sometimes you need to get creative. We found a great place in Waltham that had been sitting on the market because of some tight restrictions in the condo docs. For that reason, everyone else had skipped over it. By offering to pay an attorney to have the condo docs rewritten, we could have put a deal together.
Put irons in the fire
I always say, “Nothing ventured, nothing gained.” Don’t be afraid to put in an offer. Any offer is better than no offer. There are times when the first in-line buyers fall through and the listing agent comes back to other bidders.
Need help buying in the Boston area? I’m taking on a limited number of clients and would love to know how I can help you make a purchase. Drop me a line today to discuss your real estate goals.
It’s not every day that you meet a young woman looking to get into real estate investing. Whenever I do, it makes me smile. (I promise this isn’t another one of my feminist landlady rants!)
After a few set backs trying to break into the Waltham multi-family market, Diana reached out to me for my expertise. Diana is an extremely smart and motivated individual who gets things done. Even with all these attributes, it’s hard to land a solid piece of property in a highly competitive environment without the right people backing you up. I was thrilled to work with her as her buyer’s representation and create a winning team.
I am driven to see each and every one of my clients excel. My goal is for each buyer to feel in control of their purchase, which is why I spend a significant amount of time mentoring new investors throughout the process.
I am currently taking on a limited number of investor clients in the Boston area. Please contact me, if you are looking to buy or sell a two, three, or four-family.
During my initial meeting with Diana, we discussed her goals and came up with an executable plan. In just a few weeks she had an accepted offer on her first place and officially became a home owner this summer. I have no doubt that she will be extremely successful in this business. Go Diana!!
In Diana’s own words, here is a recap of her story:
I recently worked with Dana to purchase my first two-family property. I reached out after reading a few articles on Business Insider about the work she had done in the Boston area. As a first time homebuyer, I was anxious about the entire process. With prices sky rocketing in the Waltham area, the financing it took just to get my foot in the door, made me uneasy. In the past, I had been outbid with cash offers or offers way over ask. Moreover, finding a relator to help facilitate the process of transitioning from tenant to landlord made me that much more perturbed. Dana, however, made me feel comfortable and made every step seamless.After meeting to discuss what I was looking for and what my goals were, she set up a couple of different contenders to look at.
Right off the cuff, we ended up putting an offer in on the first property we saw: a two-family in my favorite neighborhood in Waltham. Even though we had put in a competitive offer, I had no expectations of it being the winning bid given how hot the market was/is. To my pleasant surprise (shock), Dana called me in the following days to tell me the offer was accepted. Sure, there had been other offers, but our positioning set mine apart. What sealed the deal was Dana’s finely crafted cover letter introducing me as a buyer.During my due diligence stage, Dana recommended an inspector that provided a thorough walk-through and report. He uncovered potential issues that made me nervous. Dana expertly negotiated so that the sellers agreed to some monetary concessions and agreed to fix the problems. Crisis adverted!
From the negotiation through to the purchase, through the demo and renovation, to screening tenants and transitioning from tenant to landlord, Dana is the number one reason as to why I will be successful. Through every stressful phase in the process, Dana has been a great and reliable resource answering my calls/texts within minutes 95% of the time if not within the hour the other 5%. It felt as though I was her only client. Dana has shared her expertise, honest opinions, and her own resources in the field to ensure that I will efficiently continue to build my real estate portfolio. She is an invaluable resource.
Emily and Kevin Hoffman became accidental real estate entrepreneurs by buying more space in Boston than they needed at the right time (6 years ago), renovating it for fun, and now renting out one floor of their three story home.
Young professionals by day and home improvement DIYers by night, the couple has dabbled in general contracting, carpentry, interior design, and 3D modeling while turning a below grade portion of their home into a bed/bath Airbnb suite.
A few months ago, the Hoffmans contacted me to discuss their plans for purchasing another property. A two-family style home made the most sense for the duo, as having the additional rent would help them to build equity on a prime piece of real estate.
Multi-family purchases can be difficult transactions for many reasons — they can require serious elbow grease; come with a hefty price tag, and are hard to find.
Fortunately, both Emily and Kevin had a shared vision for seeing the potential in cosmetically dated properties. The challenge was not in finding homes to fit their design style, budget and location, but how to get an accepted offer amongst all of the other buyers.
Desirable multi-family properties in and around Boston are extremely competitive. I have submitted offers for clients where we are one of 30+ buyers. In these situations, bids with no contingences are commonplace. It certainly is not easy to be a young couple, with a modest down payment when you’re up against developers and cash buyers. That said, I have a proven track record for scoring my buyers their dream multi-family homes! Nabbing a property can be a process and you certainly need to be realistic, understand the market and how to work it. More importantly, you can’t get discouraged when things don’t work out straight out of the gate.
The Hoffmans did not get their dream house on their first try. They had two rejected offers in the rear view mirror before a seller accepted a bid. Third time is the charm! After tracking the inventory for a few weeks, “the one” hit the market.
Their future home, an over-sized two-family in the highlands area of West Roxbury, is steps to the commuter rail station, local shops and restaurants, and minutes to Millennium Park, Legacy Place, Chestnut Hill Shopping, highways and downtown Boston! The 1920’s house has beautiful period details like pine floors, built in cabinets and molding.
Not only was the house ideal, so was the situation with the sellers and offer submission timeline. Having been a family home, the owners wanted to see the property go to a buyer that would love it as much as they did. Plus, by identifying a property that did not have an offer deadline, we were able to submit an aggressive bid and lock down the property before it escalated to a competitive situation. It was the perfect storm. In order for this to play out the right way, Emily and Kevin made themselves available for the first tour of the home and made sure to have their lender queued up. They squeezed in the showing right before heading up north to a friend’s wedding.
When it comes to writing up offers, leveraging technology to facilitate the most streamlined process is key. By utilizing screen share technology, hotspots, and electronic document signing, I am able to get offers to the table from anywhere! The Hoffmans were able to sign from their iPhones at the wedding reception and we had the documents packaged up and out the door within an hour.
The next morning, we had a fully executed offer in hand and the property was under agreement before the public open house. Queue the celebrations!
We had a few other hurdles to cross during the transaction. Some rough spots came up after the inspection. Then, the Federal Housing Association mandated the property be brought up to certain standards in order for the loan to close. After a fair amount of negotiating, both parties were able to work together to keep the sale right on track.
The Hoffmans have already started sprucing up the units and are looking forward to many years in their stately home! Make sure to follow their progress on instagram @humbleabodeboston.
“My husband and I recently worked with Dana to find our first two family property in the Boston area. Throughout the process, Dana gave us honest feedback that allowed us to approach decisions with realistic expectations rather than based on what we wanted to hear or thought we knew. Dana was always available to us through email and text to answer questions on everything from negotiating points, to contractors, to permits, and so much more.
Dana’s experience as a realtor, investor, and landlord was invaluable and helped us to feel at ease as first timers. Dana went above and beyond the expectations we had for a realtor – helping us to forge relationships with lenders, attorneys, and contractors. She helped us get into the home of our dreams and we look forward to continuing to consult her in the future.”
Tune in to REAL Estate Talk Boston for some of my home-buying tips:
- Finding the right area – up and coming
- Attending an open house/first showing and what to look for to make smart a decision as an investor (touching on serious issues versus cosmetic/easy fixes)
- Smart upgrades to make on a rental
- Unique ways to get income out of a property (ex. the Airbnb suite)
- First time buyers in the competitive Boston market. Why finding the right agent is important when you’re a first-time buyer. (Many young buyers DIY with Redfin, etc. so what’s the advantage of an agent?)
- Some tips on finding the right agent
- How to put together an attractive offer when you’re NOT a cash buyer in a competitive market/multiple offer situation
- Markets around Boston that are great for first time buyers right now
Four-unit residential buildings are a rarity in Salem. They seldom hit the market, and when they do, they typically need some TLC. 50-52 Roslyn Street was a rare gem – meticulously well maintained, in a desirable location, with both short-term advantages and a solid long-term play. The property required little work out of the gate. Sprucing up of the units will help to secure much higher rents and immediately improve the cap-rate to a projected 10%. The unfinished attic presents a perfect expansion opportunity, making this an ideal purchase for a condo conversion down the road.
Working on the buy-side of this transaction, I had to overcome a few small hurdles to get this property to close. Most notably an easement had to be negotiated to legitimize access to the parking area from the street. These challenges reaffirmed the importance of having not only a knowledgeable realtor®, but a solid team of lenders and attorneys on the buyer’s side of the court. The situation delayed the closing several months, but well worth the wait.
It’s all about timing. How often have you heard the expression? In real estate, it couldn’t be truer. My new clients, Pat and Lauren Henderson, are masters at nailing the timing of their transactions.
Back in 2010, the couple started their investment portfolio in the soon-to-be-hip South Boston neighborhood. This was right before the area underwent a massive gentrification. A couple years before Southie’s property values joined the highest in the city, Pat and Lauren had two condo purchases under their belts. In terms of timing, it couldn’t have been a better play – the rise of Southie, compounded by the end of the recession.
Fast forward to Thanksgiving of 2016 and and they found themselves itching to make another move. After hearing nothing but positive things from friends and coworkers about Neponset, they decided to take a hop, skip, and a jump over to Dorchester. After weighing the pros and cons of purchasing a multi-family, the buyers decided to stick with what they knew: the condo market.
“We considered the benefits of buying a two-family – the cash flow, appreciation, and condo conversion story were all very appealing. Ultimately, we opted for a condo. We know condos, and have had success with them in the past, so it was an easy decision,” said Pat.
Why Dorchester? In comparison to other parts of the city, the Dot has a lower barrier to entry. With current inventory starting as low as $217 a square foot (compared to $500 in Southie), buyers can stretch their dollar and get a bit more for their money. All eyes are on Dorchester and there are high hopes that it will follow in Southie’s footsteps. Only time will tell, but there are strong indications that Dorchester is prime for a boom.
“The neighborhood has a great vibe,” comments Lauren. “It feels similar to the way Southie felt back in 2013. With countless development projects underway, there’s great energy, and I’m definitely optimistic about the direction.”
After meeting up to discuss the strategy, we moved full steam ahead to find a property. After touring just three places, Pat and Lauren were ready to pull the trigger.
Perched on the top floor of a recent three family condo conversion, the unit they fell in love with offers three bedrooms, two full baths, two-car parking and a back deck. An additional perk is deeded roof rights with water views.
“I knew it was the one! We both just had a great feeling about it and wanted to get the deal done,” said Lauren.
Since renovated properties are selling like hot cakes, the Hendersons were prepared to act fast. Timing, of course, played a critical role in locking down the unit. In order to beat everyone to the punch, we submitted a polished offer that afternoon. Knowing that we were competing against a few other buyers, we played the timing card right. It was the day before Christmas Eve, and therefore we knew we had a good shot at getting an accepted offer before things escalated to a multi-bid situation.
Within hours, we heard good news from the listing agent. Over the next month, the Hendersons worked closely with their lender to secure financing. For young buyers, and especially young investors, this can be the trickiest part of the transaction. Fortunately, my network of lenders are extremely experienced in navigating challenging situations that can arise with millennial buyers from student loan debt, to commission-based income and self-employment.
Pat and Lauren received the keys to their new pad a few weeks ago and have already started with some value-add projects! They put in a larger closet in the master bedroom and have reached out to a roof deck specialist to get the ball rolling.
A big congratulations to the Hendersons on their new home…I’m already looking forward to celebratory drinks on the roof deck. Cheers!
“My wife and I reached out to Dana after hearing her on the Bigger Pockets Podcast. We had one rental and were thinking about moving out of our current condo and renting that out. She replied right away and set up a meeting for us to talk over our options. From that first interaction on, we knew Dana was the right real estate agent for us.
This was our third purchase and we’ve had great agents in the past, but Dana brings it to another level. She is super responsive, knowledgeable and thorough. Dana brought so much insight to the process- from pointing out key details during house tours that we wouldn’t have noticed, to figuring out the right offer to make, she guided us every step of the way with so much attention that we felt like we were her only clients.
We’ve now bought three condos, and used a different agent for each, but after working with Dana we won’t even think about using someone else on the next one!” – Pat Henderson