Boston Real Estate

When purchasing distressed investment property that is occupied by tenants or a previous owner that may have lost their home to foreclosure, one of the best ways to get them out is the cash for keys strategy. Cash for keys is basically offering the occupants money in exchange for the keys. While it sounds simple, the key to success has less to do with the money, and more to do with addressing the needs of a particular occupant. The first call they receive should not be from an attorney. Using your attorney too soon may cost your more money, time and aggravation down the line. You want to start by approaching them and figuring out what they need in order to successfully find a new place. They may just want help finding an apartment or may already have plans to leave. Have the conversation and get at the heart of their motivation. If yo can’t find common ground, then have you attorney take over. Typically, tenants want first month’s rent last month’s rent and the Security deposit for their new place. Previous owners can be a bit more challenging as they are looking for a fresh start and may need more time and more money depending on the situation. Cash for keys works but new investors should be careful purchasing occupied distressed properties where there is no rent or income being paid.

When I speak to new investors looking to buy and hold real estate, one of the first questions they ask is what type of properties they should buy first. While purchasing a property that provides income potential is a wise investment, purchasing a multifamily is even better. If you buy a condo or single family and lose your tenant, you have zero cash flow. With a multi family you can carry it easier if you lose a tenant because you have multiple tenants paying rent. It is also harder to qualify for an investment property one you own multiple properties, so make the first one count by purchasing a 3 or 4 family with as little as 3% down. After your first purchase you will typically need 20% down for any additional investment purchases.

While most folks have a negative perspective on short sales, there is actually a bright side for sellers and buyers. As a short sale seller it allows you to take control of a bad situation, get some cash into your pockets (relocation assistance), and gets your credit on the road to recovery. While foreclosures put a 5-7 year scar on your credit, many of my short sellers are buying homes within 2 years. On the investment side, they create a great opportunity to negotiate directly with the bank without competition and before the property is auctioned off at a foreclosure auction where you have to compete with a ton of investors. http://BTRealtyGroup.com.

When it comes to flipping houses, real estate investors need to understand the to keys to pulling permits. The first item you must understand is whether or not you need a long form or short form permit. This makes a big difference and can significantly increase your time frame if it is a long form. The second key is asking your contractor if they have experience pulling permits in the Town or City you are working in. It’s not a deal breaker but this can streamline the process if they are familiar with the local inspectors.