Investments
Real estate investment starts with the right numbers.
Buying an investment property requires more than finding an opportunity. It means analyzing location, income potential, property condition, costs, financing and the exit strategy.
Rental income
Properties for income and appreciation
Our team helps identify and evaluate residential properties, multifamily buildings and opportunities with renovation or appreciation potential.
We consider purchase price, estimated income, property condition, recurring expenses and potential return.
Massachusetts landlord rules that start applying the day you own tenants
Massachusetts is a strict landlord-tenant state, and most of the strictness is procedural: deadlines, accounts, forms and notices. All of it is expensive to discover late.
Security deposits
At move-in you may collect first month, last month, a security deposit no greater than one month's rent, and the cost of a new lock and key. That list is closed. A deposit goes into a separate Massachusetts interest-bearing account, the tenant gets a written receipt naming the bank and the account, interest is owed annually, and a statement of condition has to reach the tenant within ten days of tenancy. The penalty for getting the deposit wrong runs to three times the deposit plus interest, costs and attorney's fees.
Lead paint
A dwelling built before 1978 that will house a child under six has to be brought into compliance, and disclosure is required at sale and at let. In a three-family that is three units of work rather than one. Put it in the acquisition budget.
You buy the tenancies with the building
Existing leases and tenancies at will transfer at closing, on their existing terms. There is no self-help in Massachusetts: no lock change, no utility shutoff, no removing belongings. Only a court moves a tenant out.
Water and sewer, and whether it is legally submeterable
On most of this stock the bill follows the building, not the unit, and in these cities it is not a rounding error. Massachusetts allows a landlord to bill a tenant for water only under specific conditions, including certified low-flow fixtures and a written agreement, so assume the building's bill is yours until somebody proves otherwise.
Five units is a different loan entirely
Two to four units is residential financing. At five the same building becomes commercial underwriting: different terms, usually a shorter fixed period, and often a balloon.
The unit that is not on the card
A finished attic or basement apartment that was never permitted is a risk. An appraiser may refuse to count its income, a lender may decline the file, an insurer may exclude it, and the city can order it back out. Whether the building's legal use matches what you walked through is a question to answer before the offer.
Advertising a vacancy is regulated too
Massachusetts law protects more classes than federal fair housing does, including sexual orientation, gender identity, marital status, age, ancestry, military status, and receipt of public assistance or a housing subsidy. Refusing a Section 8 voucher is unlawful here. How a vacancy is advertised and screened is part of running the building, and we go through it with you.
Which of these is worth an hour of a lawyer.
The tenancies and the deposits, every time. What a particular tenancy at will requires, and whether the deposits you are inheriting were handled correctly, is a question for a lawyer: inheriting a mishandled deposit means inheriting the liability. We flag it during diligence.
Short-term financing
Hard Money
When an opportunity requires speed or a property does not yet qualify for traditional financing, hard money may be an option.
Terms, rates, timelines and approval are subject to the project review and the financing provider.
Who the lender is.
The lending described here is done by the broker through Crowd Lending Inc., a separate company from this brokerage. It is lending on investment property for business purposes, not on a home you will live in. Price a competing quote before you take that one.
Get it in writing before you plan around it.
Programme rules move. Whatever you are told on the phone, ask for it in writing, from the lender who will actually write your loan.
The numbers
Buy, renovate and sell
A successful flip starts before the purchase. Investors must calculate the total acquisition cost, renovation budget, holding period, selling expenses and expected value after the work is completed.
Load a starting point
Round starting numbers, not comparables. Replace them with the deal in front of you.
- Cosmetic Two-family, paint, floors, one kitchen, six months.
- Systems Single, new heat and electrical, kitchen and bath, nine months.
- Gut Cape taken back to the studs, eleven months, permits throughout.
What the deal says
- Total costPurchase plus rehab. Financing, carry and closing are not in this line.
- $580,000
- Gross profitSale price less total cost, before financing, carry and closing.
- $95,000
- Margin on sale priceGross profit divided by the sale price. The number a lender asks for first.
- 14.1%
- Capital tied up per month heldPurchase plus rehab, divided by the months you hold it. Not what a month costs to carry: taxes, insurance, utilities and interest are not in this figure.
- $96,667
Brazil and the US
Considering an investment in Brazil?
Be Live In Realty also assists clients interested in real estate opportunities in Brazil or transactions involving Brazil and the United States.
Buying at a distance: eight rules of Brazilian practice
A signed deed is not registration, and in Brazil you do not own what you have not registered.
Title passes on registration at the Registro de Imóveis, the property registry, not at the signing of the deed at the notary's office. Two different offices, two different moments. The purchase is finished only when the matrícula, the property's registry record, comes back with your name on it.
No CPF, no registration.
Every buyer needs a CPF, Brazil's individual taxpayer number, including non-residents who have never lived in Brazil. It is free and it comes through the consulate or the Receita Federal, Brazil's federal revenue service, but it takes time. Almost everything else in the process depends on it, so it goes first.
A power of attorney needs an apostille and a sworn translation.
If you are not flying down to sign, someone signs for you. A power of attorney executed here has to be notarised, apostilled and translated by a sworn translator. Brazil joined the Hague Apostille Convention in 2016, so consular legalisation is no longer the route. Done in the wrong order, it comes back from the notary's office.
The seller is the person named on the matrícula.
An up-to-date matrícula and the clearance certificates, before any deposit. That is where liens, a usufruct, unfinished probate, unpaid condominium fees or somebody's brother's half of the property show up. Honest sellers own encumbered property too.
ITBI and the notary and registry fees go into the budget.
ITBI, the property transfer tax, is municipal, varies by city, and is paid before the deed. With the notary and registry fees it is the gap between the agreed price and the money that leaves your account. You get that figure in writing before you sign.
The exchange has to go through an authorised institution, and the exchange contract is your receipt.
Sending the money informally is cheaper on the day and dearer later. The exchange contract is the document that proves where the purchase money came from, and you will need it the day you want to bring the money back out, or to explain its origin to the tax authority on either side.
City property is open to foreign buyers; rural land and the border strip are not.
Urban property is unrestricted for foreign buyers. Rural land is limited by area and often needs authorisation, and the 150 km border strip has rules of its own. Finding that out after the deposit is expensive.
Both countries will want to know, and there is no treaty between them.
Brazil and the United States have no income tax treaty, so rental income there and capital gain on a sale meet two systems that do not talk to each other. Directly held foreign real estate is not an FBAR item. The Brazilian bank account you opened to pay for it is.