Small Investment Real Estate?

Real estate sales are slow to sluggish at best. Small multi real estate investment real estate sales are few and far between.

In one Massachusetts community, Lowell, with a population of 80,000 +/- this year saw a total of 94 multi-family sales occurred. Of these 68 sales were Two-Family dwelling; 13 were Three family dwelling, 8 were Four families and only 5 sales of 5 or more units were reported by MLS.

Of the 5 more more unit sales the numbers were reported as:

6 Family, $220,000 or 37,666 per unit and 58% of the assessed value. Under Agreement

12 Family $276,000, or 23,000 per unit and 59% of the assessed value. Sold

6 Family $138,000 or 23,000 per unit and 56% of assessed value. Sold

8 Family $132,000 or 16,500 per unit and 34% of assessed value. Sold

6 Family $439,000 or 73,316 per unit and 1.08x assessed value. Under Agreement

5 Family $195,000 or 39,000 per unit and .59% of assessed value. Sold.

Is this the right time to invest in small multi families in this community?

The answer will depend on many factors such as building condition, appeal, off street parking, actual and potential cash flow, and full compliance with zoning, public health, code, building and fire codes. It all comes down to research and due diligence before investing.

It will also greatly depend on the future strength of the overall rental market which has shown some signs of weakness because of population declines and the general economic conditions.

The major drawback is that bank and financial institution financing is very difficult to obtain for this class of real estate making "cash buyers" king or queen of this market.

While it's evident that these properties should be in a good position should the "residential condo" market return, this could take many, many years.

The assessment/sale ratio is a strong indicator and only one transaction was above .58% +/- of assessed value.

The key is to buy-invest at the "absolute bottom" and I think it's much to early to determine if these transactions have truly hit bedrock. Only time will tell.

P.S. This general type of real estate is always labor intensive and requires an owner-investor available for small repair woek and emergencies 24/7.

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Bill McInerney

BUYING OR SELLING? CALL BiLL McInerney 617 816 3933