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How To Think Like An Investor When Purchasing Your Home

How To Think Like An Investor When Purchasing Your Home

Friends and family come to me all the time asking my advice on how to make sure they are making a good investment when they buy a new home. Some home buyers inadvertently luck out, buy in an area that happens to explode within a few years of their moving there, make a few improvements, and sell their home for twice what they bought it for just a few years prior. This is wonderful when it happens, but it is largely due to luck and timing. Other buyers get the short end of the stick and find that their home has not gained any significant value in the last 4 years and they are hardly going to break even after closing costs.

Many people don’t realize that buying a single family home to occupy is not likely to be an investment per se, meaning you are not likely to actually make much money on it, unless you are smart about it. You can’t control the market, but you can try to avoid making a bad purchase by following a few simple guidelines.

1) Plan to live in it for more than 6 years. If you are not sure you are going to stay long term, it might not make financial sense to buy unless you are doing so simply because you want to have your own place where you are the boss and might have a better quality of life than in a rental property. However, you shouldn’t count on making any money when you sell. Depending on appreciation in your area, your home might not gain value fast enough to make up for the large chunk of money you will spend on closing costs when you sell. Plus you will be spending money on maintenance and up-keep while you are living there—if you don’t, you can certainly expect your home to lose value due to wear and tear. Depreciation is just as real a factor as appreciation.

2) Never buy a $500k home in a town with a median home value of $200k. If you want your home to sell quickly and for a good price, buy at or below the median value for your area. There is nothing more frustrating than trying to sell a home that is too expensive for the average homebuyer. If most buyers in your neighborhood are looking for a 3 bed 2 bath home in the $200k range and yours is a 5 bed 3 bath home for twice as much as the typical buyer in your town can afford, it is probably going to take longer to sell. When you get farther out of the big cities, real estate markets are not so fast and furious and salability becomes a real concern.

3) It is always better to buy the worst house on the best block, than vice versa. As the old adage goes “location, location, location”: if you want your home to gain value and sell quickly for a good price when you move, buy somewhere everyone wants to be. Even if I am a hundred miles away and have never been to any of the towns my friends are considering moving to, I can pull some data on crime rates, appreciation rates, median home costs, school ratings, types of architecture and how educated the population is within a couple minutes and tell you which town is a better bet in terms of resale value.

4.) Finally, buy a house in which value can be added. If a house is perfect already, someone else is making money on you. If you want to think like an investor, buy a house in need of cosmetic updates, or a foreclosure. Plan to do some projects, and while you might have a few more headaches than the buyer of the move-in ready home, you will be glad you did when you make money on the other end.

Happy House Hunting!

 – Liz Newcombe, Sales & Leasing Consultant | Liz@MandrellCo.com

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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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The majority of Bostonians hate writing a check to their landlord every month, particularly if you live in Roxbury, Jamaica Plain, and Lower Mills areas. Sometimes you are cursed with noisy neighbors, or a super strict landlord who is looking for any reason to push you out so he can get the next highest paying tenant.

If any of the above applies to you, you probably want to buy a home…yesterday! Wanting to buy a home and being ready to do so are two different things. Are you financially ready for the monthly mortgage payment and budgeting for repairs?

Here are five signs that you’re not ready to buy a house just yet. But don’t fret; even if you are struggling with these financial issues, you can still become a homeowner. You’ll just need a bit of patience and improved financial skills.

Buying a home is expensive. You’ll need money for a down payment. If you are buying a home with an FHA loan, you’ll need a down payment of 3.5% of your home’s final purchase price, depending on your credit score. For a $300,000 home, that comes out to a down payment of $10,500. Thanks to Mass Housing, we have a 3% down payment program, but that still equates to $9,000. These numbers do not include closing costs, moving costs and other miscellaneous costs associated with moving into a new home. 

Closing costs are the fees that mortgage lenders, title insurers, attorneys and others charge you to originate your mortgage loan. We generally tell people plan for an additional 2% to cover these costs which equals $6,000.

It’s true that you can get help with some of these costs. You can use gift money from relatives, for example, to pay for all or part of your down payment. You might be able to convince a home’s seller to pay for all or part of the closing costs. In our current market, sellers are not inclined to do closing cost assistance unless you plan to purchase well above asking. 

What to Do

It’s best to start searching for a home only after you’ve saved enough money to cover a down payment and your estimated closing costs. Another option would be to look into programs available by your municipality that encourages home ownership by providing financial assistance. There are also some non-profits and other organizations that allow you to purchase with 0% or a rate lower than industry standard. (NACA.com)

Sign 2: Your Credit Score Is Bad

Your credit score is a key number when you’re applying for a mortgage. The best interest rates go to individuals with the best credit scores (above 740). The lower your score, the higher your interest rate and subsequently, the higher your monthly mortgage payment. You can purchase a home with a 580 credit score according to FHA guidelines but there are only a few lenders willing to accept a score this low. 

What to Do

First, order at least one of your three credit reports from AnnualCreditReport.com. You are entitled to one free copy of each of your three credit reports — maintained by the national credit bureaus of Experian, Equifax, and TransUnion — once every year. Once you get your report, read it carefully. It will list how much you owe on your credit cards and how much you owe on student loans and car loans. It will also list whether you have any late or missed payments during the last seven years. Those late or missed payments will send your credit score tumbling.

Next, order your FICO credit score. You can do this from the credit bureaus, too, but you’ll have to pay about $15 to do so. If your score is low, and there are negative marks on your credit report, it’s time to start a new history of paying all your bills on time. You also need to pay down as much of your credit card debt as possible. Both of these actions will steadily increase your credit score, though it could take months or even more than a year before your score recovers enough to make you a good candidate for a mortgage loan.

Sign 3: You Have Mount Everest of Credit Card Debt

Your debt-to-income ratio is another key number when it comes to buying a home. Lenders want your total monthly debts, including your estimated new mortgage payment, to equal no more than 43% of your gross monthly income. If your debt-to-income ratio is too high, you’ll struggle to earn approval for a mortgage. Some lenders will go as high as 50% due to the high cost of rent but generally, they want to see that you are not up to your eyeballs in debt.  

What to Do

I would say pay off your credit card debt but if you could have, you probably would have by now. I will STRONGLY recommend you always make more than your minimum monthly required payment. 

Sign 4: You Routinely Miss Your Monthly Payments

Making late payments, or missing payments completely, is a sure sign that you’re not ready for the financial responsibility of owning a home.

If you miss a mortgage payment by more than 30 days, your credit score will fall by 100 points or more. If you miss enough, you could lose your home to foreclosure. This is not like a landlord where you get warnings before it affects your credit… this is immediate. 

What to Do

Learn better financial habits before you apply for a mortgage. Set up reminders on your phone or computer alerting you when bills are due or use my favorite method… automatic payment. You could set aside one day each month dedicated to paying bills if you prefer the old fashioned paper method. Don’t apply for a mortgage until you’ve broken the habit of regularly missing your monthly payment due dates. 

Sign 5: You Don’t Have a Stable Job

You’ll need a steady, reliable stream of income if you use a mortgage to finance the purchase of a home. If you’re worried that you’ll lose your job, or your income is sporadic with no real pattern, you should probably NOT purchase a home. Generally, you need 2 years of full time work history. If you are self employed, you will need other documentation to help qualify you for a loan. 

What to Do

Find a job that is reliable and that pays you a stable income each month. Don’t take the risk that everything will work out. You don’t want missed mortgage payments on your credit reports. And if your job is unstable? You’ll greatly increase the risk of these red marks. If you are self employed or you operate on seasons… then you should think of yourself as a chipmunk… get good at storing away for the slow months. 

I hope this advice was helpful. We strive for our clients to be responsible home owners and want to ensure you will not be putting your home up for sale due to foreclosure. We want to help you BUILD WEALTH THROUGH REAL ESTATE!

 

For More information, please contact one of our agent specialists for your area or connect with us on… 

Dorchester Real Estate Agent

 

 

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Key Facts to Selling Your Home (Part I)

When selling your home, there are several important facts to consider when working with your real estate agent beyond just listing your home and waiting for offers to roll in. Below is a BRIEF overview. For detailed outline of the process, please contact us.
Define your needs.

Write down all the reasons for selling your home. Ask yourself, “Why do I want to sell and what is my ultimate goal after the sale?” For example, a job opportunity in another city may necessitate your move, a growing family may prompt your need for a larger home or conversely children moving out may signal it is time to downsize. For your goals, write down if you’d like to sell your house within a certain time frame or make a particular profit margin. Together, we can map out the best path to achieve your objectives and set a realistic time frame for the sale.

Name your price.

Your next objective should be to determine the best possible selling price for your house.Currently, the Roxbury Market is booming, you want to price your home to get the most traffic.  Setting a fair asking price from the outset will generate the most activity on your home. We know what comparable homes are selling for in your area and the average time those homes are sitting on the market. Remember: You’re always better off setting a fair market value price than setting your price too high. Studies show that homes priced above their market value take longer to sell. If your home sits on the market for too long, potential buyers may think there is something wrong with the property. 
Prepare your home.

Most of us don’t keep our homes in “showroom” condition. If you have kids, at any given moment, it can look like a bomb exploded in your living room. The condition of your home will affect how quickly it sells and the price the buyer is willing to offer. First impressions are the most important. As your real estate firm, we can help you take a fresh look at your home and suggest ways to stage it and make it more appealing to buyers. We can provide feedback on inexpensive things if you are on a tight budget. You want buyers to envision themselves in “their new home” NOT Your current home.
Get the word out.

Now that you are ready to sell, we will implement the marketing strategy specifically designed for your home. There are many ways to get the word out, including: The Internet, Yard signs, Open houses, Media advertising, Agent-to-agent referrals, and direct mail marketing campaigns. In addition to listing your home on the MLS, we will use a combination of these tactics to bring the most qualified buyers to your home. We also host monthly seminars to help potential buyers get pre-approved to purchase a home. We cover a range of topics with the goal of helping attendees improve their credit, earn a higher income, and understand the home buying process from start to finish. We are also very active in and around the community. Our Roxbury real estate consultant Terrance Moreau can be seen mingling with community members in Dudley Cafe, speaking with home owners and providing feedback to homeowners because he is passionate about his community.

Be sure to check back for Part II of this series.

For questions, feel free to contact our office at 617-297-8641 or email us at Contact@MandrellCo.com.

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How Do I Make More Money Selling Real Estate?

Make More $$ Selling Investment Properties! Sales Agents Wanted (All of Mass & RI)

Local Boston Real Estate Office Looking for New & Experienced Agents! Starting with 70% commission splits for experienced agents & 65% for newly licensed agents!

Our office is unique in that we focus on Multifamily & Investment Real Estate Sales. Real estate investors are “repeat” buyer and sellers and building long-term relationships with local investors is our top priority. Right now we are busy and looking for new agents. Our office is in Boston but we’re in need of agents North, South, & West of the city as well as RI.

You can read more about The Mandrell Company by visiting http://www.MandrellCo.com

You can also learn more about building a sales business by working with investors at http://www.SellMoreBostonRealEstate.com

We employ a virtual sales model. No floor time required. Most of our agents work from home or out of their private office spaces.

We do an extensive amount of marketing and will provide leads but will also train agents on how to build your own business connections. Part time or Full time.

Send resume to contact@mandrellco.com to schedule an interview.

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Are you interested in a career in real estate sales? Do you have an interest in real estate investing?

If you’ve answered yes to these two questions than you need to sign up for our FREE New England Real Estate Sales Training! This event is for licensed real estate agents (in Boston, Rhode Island & New Hampshire) or anyone thinking of becoming licensed in the business. We’re going to teach you how to grow your business faster and more efficiently than most agents. We’re also going to exposed you to the systems and tool we use to build business relationships with local investors!

For more information and to reserve your spot today, please click on the link below.

https://www.eventbrite.com/e/learn-to-double-your-sales-income-working-w-real-estate-investors-developers-tickets-17465747521

Who: Local Massachusetts & Rhode Island Real Estate Agents 

What: FREE Real Estate Sales Training Seminar (Focused on building your business through investor relationships)

When: October 17th, 10am – 230pm

Where: Oficio Boston – 30 Newbury St Boston, MA 02116

 

https://www.eventbrite.com/e/learn-to-double-your-sales-income-working-w-real-estate-investors-developers-tickets-17465747521

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The Mandrell Company is pleased to announce that we’ve just expanded our real estate sales and rental business into the state of Rhode Island!  We have two designated agents for the state and they are ready to serve your real estate needs. If you, or anyone you know is looking to buy, sell or rent in Rhode Island, we’d certainly appreciate the connection.

You can continue to reach us by email at Contact@MandrellCo.com or call our local RI office at 401-641-5774.

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Are you a new investor trying to learn his/her local real estate market? Are you a seasoned investor that trying to explore a new investment area? In either case, below are some great way to quickly become a local real estate guru!

Subscribe to your local newspaper – The local paper isn’t real estate focused but it will give you a very good idea of what’s happening in your new market. You really want to be up to date on what new businesses are coming to town, how the local economy is doing, what political changes are happening and anything else that will indirectly affect the real estate values in that neighborhood.

Find a local real estate Investment Association – Put yourself in the middle of local real estate conversations. Your local REIA allows you to connect with people of similar interest. You can learn from them as well as share your experiences. Many times you can find deals from local wholesalers as well as private money investors, and potential partners. Boston Wealth Builders is a local Boston Investment Group and membership is completely FREE. Join Today!

Get Sold comps from your agent – One of the best ways to gather information about your local market is to study what’s selling in that market. What are buyers paying for properties similar to the type you’re considering? How quickly are they selling? Is it a buyers or sellers market? The easiest way to gather this information is to ask your local real estate agent to send you “Sold Comps”.  All you need to provide is your email address and a list if the areas you’re interested in. These sold listings can be sent to you on a weekly basis. If you would like to receive “sold comps” from The Mandrell Co, simply send us an email (Contact@MandrellCo.com) with the towns you’ve selected and we can set that up for you within 24 hours!

Get Rental Comps from your agent – If you’re investing in rental property it’s also important to understand your local rental market as well.  Your real estate agent can also provide you with these “rental comps” just as easily.

Get Google Alerts for your keywords – This is a really cool feature offered by Google.com. It allows you to systematically search the web for information regarding certain keywords you’ve selected. How doe this help you become a local real estate expert you ask? Let me give you an example. If I wanted to become an expert within the Malden real estate market I would set up “Alerts” in google for key terms such as “Malden Real Estate, Malden Homes, and Malden Developements”. Google would then automatically search the web for me daily and email me any news articles relevant  to those search terms. I would be getting all Malden news sent right to my inbox versus having to periodically search for it. To set up google alerts visit https://www.google.com/alerts

Subscribe to a local real estate blog – To sign up for blog post like these by placing your email address in the box at the top right hand corner above! All post are sent directly to your email address.

Neighborhood associations – Join your local Chamber of Commerce. Your local chamber is full of people that make a difference in the community. If you want to know what’s happening in a particular neighborhood, these are the people to speak with.

 

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Are you in the process of getting licensed as a Massachusetts real estate agent?  Are you  not happy with your current firm and looking for a change? In either case , consider joining The Mandrell Company! The real estate industry can be a very fun and rewarding business if you work hard align yourself with the right people in the industry. The Mandrell Company is a residential & commercial real estate brokerage firm and we specialize in multifamily purchases and sales as well as working with rehab investors.

Why do we focus on this particular market?

  1. Real estate Investors buy & sell multiple properties! Working with real estate investors can allow you to do 20+ sale per year while only need 3-4 different clients. Many investors will buy property directly from the listing agent, rehab the property, and then say thanks by giving the property back to you to sell to an end buyer. At minimum you achieved 3 “deal sides” in this scenario! Even multifamily buy and hold investors are repeat clients and are very loyal to us.     
  2. Real estate investor buy with cash so you avoid the hassles that come with dealing with bank mortgage brokers and preapproval letters. Cash  purchases also allow investors to close sooner because they avoid bank appraisals and the need to wait on loan commitments.
  3. Investor often waive the option to do a home inspection. Most investors are savvy buyer and know their way around a project. They are buying for the purpose of rehabbing the place and don’t need a home inspector to come in and point out minor damaged. No home inspection mean the closing timeline is shorten and you get paid sooner!

The Mandrell Company has a very larger network of local and national real estate investor and they’re all looking for their next project. Our firm is searching for good agents to help us locate and feed our investors good deals. We have all the marketing tools and training necessary to make you successful, we just need motivated and intelligent people that want to make money. We’re hiring agents all over Massachusetts! All of our company systems or web based so we do not require you to work in our office! Work from home or from your private office and receive very competitive commission payouts!

Outside of the great money you can make with TMC, we offer a very good opportunity for you to learn a ton about real estate investing. We operate two investment groups in the state; (Boston Wealth Builders & Metro West Real Estate Investors) where we teach many new investors how to build long term wealth through real estate.

Interested in joining the firm? Still have questions? Email us at Contact@MandrellCo.com or call 617-297-8641. You can also read more about this position at MandrellCo.com/Careers

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