I want to buy an apartment in boston area... need advice

[eugeneel]

I want to buy an apartment (or some other form of real estate) in boston area since I see it as a good investment of my poker winnings. I have about 35k on my account right now which I don't really need and am expecting a steady monthly income of about 5-7k (not related to my poker game with 2k a month I would need for personal expenses.)

I don't really know anyone who has much experience with buying real estate (my friends are college students) and would like some advice.

Is there any kind of property that I afford a downpayment on, (I have no credit history whatsoever) that would then pay for itself if I rent it out to tenants?
What would be the most profitable investment for me?
I was thinking of maybe even getting a cheap duplex in a town where homes are cheap where I would have 2 sets of tennants. I am sure I would be able to pay for the morgage this way but don't know if I can afford a downpayment on this... (what % would it be for me? How many years should I finance it for?)

Also... If I finance a property... will the IRS be after me asking me where a 20 year old got the money for this?


I am grateful in advance for any feedback.

-Eugene

[Ray Zee]

first off without credit you will need about 25% down to get a loan. but can get owner financing on some places if offered withount any credit history. it is all negotiable.
generally you will make the most appreciation from single family homes rather than a duplex. but a duplex will generate more cash flow. but you tend to get worse tenants.
also you need a reserve for repairs and unexpected things like a new roof for 20 grand. but the way to get rich is to do this stuff. start reading alot.

[Wake up CALL]

After you pay your taxes you will only have a few thousand. Get a job, it will last longer! /images/graemlins/smile.gif

[Michael Davis]

"I want to buy an apartment (or some other form of real estate) in boston area since I see it as a good investment of my poker winnings."

Lines like this demonstrate that, despite your minimal effort, you have not progressed higher than the "complete douchebag" position.

-Mike

[daryn]

come on man, why so harsh on eugene? buying up real estate and renting it out is definitely the way to become rich.

[Michael Davis]

Eugene is too proud of his poker winnings. There is no reason to mention them in this thread.

I have nothing whatsoever to say about his real estate plans.

-Mike

[eugeneel]

The only reason you are against me mentioning my winnings in this thread is that it makes it hard for you to sleep at night knowing some 20 year old guy is a better player than you.
I think you will have a more positive look on life once you start sleeping in a nice, cozy appartment that you'll be renting out from me in a few months.

[brad]

'Also... If I finance a property... will the IRS be after me asking me where a 20 year old got the money for this?
'

and

'The only reason you are against me mentioning my winnings in this thread is that it makes it hard for you to sleep at night knowing some 20 year old guy is a better player than you.
I think you will have a more positive look on life once you start sleeping in a nice, cozy appartment that you'll be renting out from me in a few months.
'

i can only say be careful. heh

[Michael Davis]

Eugene,

Unfortunately for many poker pros, personality doesn't come in chips.

-Mike

[Michael Davis]

Brad,

Eugene doesn't frequent this forum, so he likely had no way of knowing my occupation.

-Mike

[Robk]

[ QUOTE ]
knowing some 20 year old guy is a better player than you.

[/ QUOTE ]

The last I heard you couldn't beat the party 10-20... Maybe turn down the ego a bit?

[eugeneel]

You have a good point.

I'm sure I'm just having a bad 2 month period though. (only avging like 1hr/day of poker)

[MrBlini]

It's hard to be too realistic about the real estate situation in Boston. The current market is brutal for first-time buyers.

Given that there are people with 5k-7k/month in income with sterling income histories and strong credit ratings who are priced out of the market here, and given also that properties routinely sell for 20% or more above their assessed values, I don't think 25% down is going to swing it. 35% might get a lender interested, which begs the question:

What can you buy in the Boston area for $100,000?

You might be able to find a small studio apartment in the suburbs for that.

Barring that, you could try to find the best parking space for the money. I'm only half kidding here. Parking spaces in Boston proper can be good investments. You can't live in them, but you can charge quite a bit in rent.

[brad]

not my point at all heh

[Michael Davis]

Brad,

I know, but I was trying, albeit in futility, to send a shiver up the spine of our nouveau riche friend.

-Mike

[eugeneel]

I has some people tell me that I can put a 10% downpayment even if I have no credit since this payment would be used as colladoral. These sources are by no means experts on this stuff.

Mr blini, are u sure that this is not possible?

Are you Russian as well by the way?

thanks ahead,

-Eugene

[brad]

there was actually an article in cardplayer i think about how you get a cut if you rat someone out to the irs. heh

[Michael Davis]

I think Eugene is 100:1 more likely to rat me out than vice versa.

-Mike

[brad]

well i only said that cause eugene admitted to tax fraud and then was an ass to you, heh, never a good recipe heh

[MrBlini]

If you have no evidence of ability to make your payments, the bank wants to be sure of making a profit if they foreclose on the property. (This is actually true whether or not you have said ability, but they'll be even more concerned about it without a proven income history.) Therefore, the bank will want a sizable down payment. I suggest talking to your bank's loan officer as a starting point to give you a good idea of what you actually could afford.

I am not a banker or a real estate agent. However, I do know that with 10% down on a traditional loan, you would have to pay PMI, mortgage insurance that guarantees the bank does not take a loss on the portion above 80% of the property valuation. As a poker player, you know all about freerolls. PMI is giving the bank a freeroll at your expense. YOU pay the mortgage insurance that guarantees IT a payout. Talk about negative expected value.

[eugeneel]

Making a joke about you paying me rent is considered me being an ass to you while you calling me a douchebag first is perfectly normal... see it's thinking like this that makes it hard for me to get along with guys like you.

-Eugene

[Kurn, son of Mogh]

In the greater Boston area, a condo of less than $200,000 is pretty tough to find. I just sold mine in Medford for $193,000 in January - 720 square feet.

I also know someone in Dorchester with a condo for about $200K up for sale. Lots of room, but no off-street parking.

Go talk to some mortgage brokers about what they can do for you. You also might want to consider seller-financing, that way you can avoid some of the red-tape banks use, but expect a pretty tight contract if you do it that way.

[eugeneel]

Thanks for the advice... No way I would like to buy anything in dorchester though it's the harlem of boston.

[Bubu]

Smooth. Have you ever been to Harlem ?

[Munga30]

Has he ever been to Dorchester??

[eugeneel]

I lived in government housing for the first seven out ot ten years in this country. I have not spent much time in dorchester but have been there. I only drove through harlem a couple of times.

[Kurn, son of Mogh]

depends on what part of Dorchester.

[southerndog]

Why would you dis Dorchester if you can't even afford to buy an apartment there?

[Michael Davis]

Eugene,

My calling you a douchebag was based on empirical evidence which your follow-up only confirmed.

Whether or not I am a douchebag is a different issue entirely. And even if I am one, I'm still allowed to identify others.

Also, please don't hold me responsible for anything brad says or vice versa.

-Mike

[eugeneel]

"Why would you dis Dorchester if you can't even afford to buy an apartment there? "

I think this is the single dumbest question I've been asked.
1) I didn't "dis" it. I just said i resembles harlem (a lot of black people and minorities, crime, welfare, government projects etc)
2) Where was it said I couldn't afford it. (I said I don't want to buy an appartment there cause it's probably the worst place to live in Boston
3) Why wouldn't someone dis dorchester?

[eugeneel]

sorry u guys sound the same, kind of like an old married couple.

[John Cole]

Michael,

You should realize that many of us here don't even hold brad responsible for what he says. /images/graemlins/grin.gif

[lil']

In the greater Boston area, a condo of less than $200,000 is pretty tough to find. I just sold mine in Medford for $193,000 in January - 720 square feet.

My wife and I recently purchased a home in Massachusetts (well actually, it's official on Dec 5). One of the great disappointments to me was how overpriced condos were. Add on condo fees and it's a terrible value, IMO.

[Kurn, son of Mogh]

Absolutely. When I sold, I joked that it was a great time to sell, and a lousy time to buy. I paid $127,000 for that same condo 3 years before I sold it.

[Kurn, son of Mogh]

When my friend bought the condo, she was asked why she was buying in Dorchester. She answered "because I can't afford Roxbury."

[bad beetz]

You will have great difficulty getting financing for real estate without a FICO (credit) score. I don't know what you mean by "I have no credit history whatsoever." Does that mean you've never had a credit card, car loan, etc? If you have a stable rental history from a large property management company, this can count as a credit trade line in the eyes of some subprime lenders.

Things in the market are "FICO driven" where as they used to be income driven.

However, you do have a significant down payment and (if you have no credit history) very little debt, so it's not impossible. If you want, I can check your credit through my brokerage for twenty bucks, I would have to fax you a borrower authorization form.

As for what to buy, where to buy, etc, just interview a few agents until you find one you feel is competant in investment properties.

If you can afford to buy, it's a no-brainer that you should if you don't plan on moving in the near future. You're problem is going to be securing financing with reasonable terms concidering you have no credit history. Owner financing is hard to find and can have sick rates.

You may wish to begin developing a credit history, if you have any more questions about that, PM me.

-Dave

[Lazymeatball]

[ QUOTE ]
Also... If I finance a property... will the IRS be after me asking me where a 20 year old got the money for this?


[/ QUOTE ]

I thought the whole idea behind buying a house was that you could claim the mortgage against your income on your tax returns. This sounds like the perfect solution to your tax problem.

Have you considered buying a house in Amherst and renting to students? That town could use another slumlord.

If you follow through on this idea, keep us posted as it is something I would like to pursue myself in the future.