invest small unit and self-manage townhouse is risky ? at Lowell,mass

Asked by Ann, Lowell, MA Mon Jan 28, 2013

1) I am looking to invest some properties at lowell,ma and i am not sure the small number unit like 3 or 4 unit townhouse is risky to invest ?
2) For small unit and self-manage townhouse is more harder to apply the loan or very low demand in market? cos people might don't have confident to buy the small unit townhouse is that true?
3) small number unit townhouse is hard to sell in future?
Thank you!

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Joshua Gillis’ answer
Joshua Gillis, Agent, Dracut, MA
Mon Jan 28, 2013
If I was going to invest ... unless this was a steal and I mean a steal, I wouldn't advise it. There are too many variables that go along with a self managed small town house complex that would not be in your favor. Just to name a few.. Higher repair cost per unit, lack of aggressive management style with respect to gaining capital and maintenance of the building. They may not qualify for FHA or any funding for that matter due to renting vs owner occupancy or whether or not have a healthy reserve. This could be a huge problem with regards to getting financing. So your concern is dead on... Your right about the thought of buyers lack of confidence in buying into those small complexes for basically the same reasons..I don't see this as a safe investment at all. If you want to invest, you would be better off buying into a larger complex if it is condos that you are interested in. Beware though, just because they are larger doesn't mean that 1, they can get all financing and 2, that they have the reserve or other requirements banks look for. There are many multi-families and single family homes in your area which your mortgage would be less than market rent. If I was to advise for best return in future I would say single, multi -families... even commercial... anything but condos in a small complex. Its just too high of a risk. If you have any other questions, feel free to contact me.


Joshua Gillis
Gillis and Company
ERA Key Real Estate
(978) 771-4194
1 vote
Thank you! do you think condo and townhouse which one is good investment.
Flag Sun Feb 10, 2013
Heath Coker, Agent, Falmouth, MA
Tue Jan 29, 2013
Unless you controll most or all of a small building, there are many pitfalls.
Lenders don't like to lend if more than 50% are rentals.
One foreclosure causes problems.
4 people getting along can be tedious.
Condo fees / collection may be another issue.

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0 votes
Thank you for your answering my question
Flag Sun Feb 10, 2013
Wen Farina, Agent, Reading, MA
Mon Jan 28, 2013
What is your ultimate goal in investing?
0 votes
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