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Many people think they can’t buy a home because they don’t make enough money. I honestly believe you can accomplish almost anything you put your mind to with hard work, sacrifice and some thorough research on your options. I am a fan of real estate as a tool to building wealth because it is tried and true…tested for centuries and when executed correctly (which isn’t that hard), it can really propel your financial trajectory. 

Let’s say you are looking for your first home purchase…. what are some sacrifices you are willing to make to get into the game? I’ll tell you what I would do in this aggressive Boston market, especially if I HAD TO stay in Boston.

  1. I would research the most inexpensive yet safe and inviting neighborhoods in the city…. currently, Mattapan is wide open but picking up steam, some parts of Dorchester, and Hyde Park, however, the prices in these areas are constantly being pushed to a new limit. 
  2. See you qualify for any city programs. There are numerous options available to first time homebuyers through the city. Although you may have money saved for a down payment, if there is free money available… utilize it.
  3. I would research streets within these neighborhoods to identify where I could see myself living for 3-5 years. Select multi-family homes in decent condition. Depending on the time of year and your pre-approval amount, the property condition could be a little worse and you can utilize a rehab loan. 
  4. Screen ALL tenants to ensure they are most likely to pay rent on time monthly. If the place comes with tenants, when do their leases expire? What is their payment history? Are they paying market rent? (sidetone: I am for giving a discount to great tenants but still keep within reach of market rents; not more than $200 discount. If you are providing a larger discount, this WILL hurt your resale value.)
  5. Occupy one unit for 3-5 years which will allow the market to possibly rise and therefore increase your equity; you can start saving again for the downpayment to your second property (now at 20-25% down)
  6. Be smart…run this like a business. Set aside 3-5% of rent toward long term maintenance and repairs (water heater, furnace, plumbing, roof). Budget for incidentals, things break down in every home over time. The income generated from your 1st property will be utilized to calculate your pre-approval amount for your second property.
  7. Depending on which home you like more, decide which you will live in and which will be 100% investment property.
  8. Rinse, and reuse. The key is knowing the numbers of how much to spend. Our agents are trained to evaluate the numbers to ensure you buy at the right price point for your goals.

To connect with one of our real estate specialists, please click on the link

Below is a story of a gentleman who followed the steps above and owns 9 properties while working full time. 

Full Story

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The Mattapan market has probably been the quietest in Boston  thus far. This signifies a stable community with homeowners who are satisfied with where they are and limited interest in selling. 

Multi Family homes have gained over $60,000 in equity since 2014. 

Condominiums are not popular in this area as evidenced by only one being sold thus far this year. 

Single family homes have experienced over $50,000 in added value of the past 2 years. Homes are selling for more and in less time. 

Multi Families 2014 2015 2016 (January to July)
# Sales 27 30 11
Average Sales Price $414,996 $434,081 $478,000
Days on Market (DOM) 70 57 124

 

Condominiums 2014 2015 2016 (January to July)
# Sales 7 5 1
Average Sales Price $115,357 $217,580 $185,000
Days on Market (DOM) 153 84 269

 

Single Families 2014 2015 2016 (January to July)
# Sales 14 26 12
Average Sales Price $255,743 $293,885 $313,158
Days on Market (DOM) 96 58 54

For more information on your mattapan market, contact your Mattapan specialist Rebecca Moise

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Break These Habits To Get From Paycheck to Paycheck TO Owning Your First Home (Pt. 3)

Over the past few days, we’ve reviewed some habits to get from living paycheck to paycheck to owning your own home. Below are some more habits you should consider altering if your long term goal is to build wealth. I think everything in moderation is okay but it is human nature and especially American nature to sometimes go a little over board.

11. Throwing Your Child a Huge Birthday Party

Your child will forgive you for not throwing them an expensive birthday bash. Children are as simple as you help them develop to be. I you keep their lives simple… why would they want the extravagant? I never understand the expensive 1st birthday parties… the baby has NO IDEA what is happening, it is simply an opportunity for the parents to have a party.

TRUE STORY: I know several people who throw their kids lavish birthday parties yearly so that their instagram/facebook/twitter is filled with photos/comments/likes yet… they are still renters and always complain that the market is expensive. Can you imagine how much you could save toward a down payment if you made the sacrifice for 2-3years? In addition to your regular savings, opt for a no party or low cost party. The money you save should go toward your down payment fund and NOT toward gifts There is a prize at the end of this sacrifice, I promise.

12. Shopping Impulsively

If you’re considering making an impulse buy, wait 14-30 days and ask yourself if you still want or need that item. You might even forget about the item completely, which pretty much answers the question for you. There is hardly anything in the world you need immediately (except maybe necessary food and water), Resist the temptation. If you do not need it… walk away. Always keep the big picture in the back of your mind.

TRUE STORY: To help me save, I put all extra cash (minus living/survival expenses) in a savings account that I do not have a card for and the bank does not have a physical branch (online only). If I wanted money… I had to transfer it into another bank’s checking account, this process took 3 days. The urge to purchase something dies when you have to wait 3 days to have the funds. It was my tool that helped me save $10,000 in a year and pay off my first car. You never realize your shopaholic tendencies until you start “rehab.”

13. Skipping Breakfast

Eating breakfast gets your day started on the right foot and can keep you from buying a huge, expensive lunch. Try filing breakfast foods, like oatmeal or eggs, which will likely keep your stomach (and wallet!) full. When you skip breakfast, you are starving by lunch time and become quite ravenous. This seemingly insatiable hunger leads to purchasing larger lunches and thus less savings toward your home.

TRUE STORY: There was a period in 2016 that I purchased breakfast everyday for my 2 children and myself (hangs head in shame.) This usually occurs during winter when it is cold and you crave the extra 10 minutes of sleep which then makes you late and breakfast has to be on the go. Easily, I spent $15/day that works out to $75/wk on BREAKFAST ALONE. Do not skip breakfast and DO NOT BUY breakfast either.

14. Paying Multiple Student Loans

Interest rates are still relatively low for student loans, and I presume mid range for credit cards depending on your score.  If you have the discipline to not take on additional debt, it could be a good time to consolidate your debt. By consolidating student loans, you might even be able to lower your monthly payments and extend your repayment period. For credit card and other debt, pay attention to the interest rate. The goal is to utilize a balance transfer, consolidate debt and pay as much as you can OVER the minimum payment monthly. Generally, most cards provide 12 months interest free. Plan to pay off this debt within 12 months. note: your interest rate when the promotion ends, should still be less than your current credit cards.

TRUE STORY: I was able to pay down $5,000 credit card debt by consolidating. I saved on interest, that I would have paid out monthly AND I received a lower interest rate than my current card. I hen went to my initial card and stated I wanted my interest rate lowered because I have good credit and guess what… they lowered my credit. YOU HAVE TO ASK! They will NOT tell you this information.

15. You Focus on Saving More — But Not Earning More

Millionaires aren’t in the business of wasting money, but they also recognize the greater importance of earning additional income as a way to attain financial goals faster. “[Wealthy people] understand that while there is a limit on how much you can save, there is no limit to how much you can make,” Tardy says.

In other words, even though slashing your expenses by $50 or even $100 a month will boost your bottom line a little bit — raking in thousands more from a salary bump will have a much greater effect.

Invest your time more wisely by seeking out ways to earn more. An obvious place to start is by examining your current salary. If you haven’t asked for a raise recently, and know you’re delivering value to your company, schedule a meeting with your boss to make your case for earning more.

The key is figuring out what skills you have that can be of value to others and then determining how to charge for that value.

 

We hope you found these suggestions helpful! For more tips on how to save for a down payment, please connect with us on:

Dorchester Real Estate Agent

 

Excerpts from full article.

 

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The Roxbury Real Estate market is experiencing a boom. Condo sales are through the roof and buyers cant seem to get enough. Single families and multifamilies are selling off market more than on market and being converted to condos because the demand is greatest. 

Mutli family home values have aggressively increased due to the high demand for rental units and the lure of condo conversions. MF homes were selling for $532,000 in 2014 and to date (keep in mind we are only in July) are selling for $879,000.

Multi Families 2014 2015 2016 (January to July)
# Sales 24 33 13
Average Sales Price $532,595 $574,782 $879,308 
Days on Market (DOM) 53 57 105

Half way through the year and condo sales have already matched the entire year of 2015 sales and surpassed that of 2014. Values have increased by $100,000. Savvy investors have taken notice and have been trying to meet the demand for luxury condos in the community. 

Condominiums 2014 2015 2016 (January to July)
# Sales 29 34 32
Average Sales Price $290,023 $404,094 $387,293 
Days on Market (DOM) 65 58 62

Single family sales have always been lower because they are hard to sell due to their large size. The average family does not want the responsibility of these massive Victorians. Savvy buyers have started converting them to multi-families to utilize the space. 

Single Families 2014 2015 2016 (January to July)
# Sales 12 14 7
Average Sales Price $435,975  $406,214   $444,964 
Days on Market (DOM) 63 94 43

For more information on the Roxbury real estate market, connect with your area specialist Terrance Moreau

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