Foreclosuresmass.com is reporting 7512 new foreclosures initiated in the last 60 days. Thats 125 foreclosures per day every day. If you pull the weekends out… well you can do the math.

The vast majority of these properties will end up as “REO” or “bank owned” properties. A quick count of the multifamily properties on the market in Malden shows that 49 of 115 listings are either short sales or bank owned and a perusal of the tax records show that another third of these will likely become short sales or bank owned in the not-too-distant future.

Some of the prices I’m seeing in multifamilies today are lower than what I would have sold a single condo unit for in that same property a year and a half ago. Some properties actually look like they might cash flow.

Take 1124 Salem St for example. This property is listed at $259,000. If you paid full price and put 20% down that’s
Down Payment $51,800
6.5% 30 Year Fixed PITI $1776.31
Rentometer shows median rents as
$1300 for the 2-bed
$1675 for the 4-bed
$2975 Total
That is a net monthly cash flow of $1199, or $14,388 annually
You’ll realize a pre-tax cash-on-cash return of about 28%

If you bought this property now and held it for 10 years, even if the market drops this year then crawls at a snails pace of only 2% per year for the next 10 years (not likely), taking into account vacancy, maintenance, and all the usual suspects, you should realize a 23% after-tax annual return. Where else can you buy this kind of investment but real estate? Answer: nowhere.

Investing in the Greater Boston Area makes sense again. If you’re sitting on the fence you’ll be telling stories 10 years from now about what you could have bought these properties for if only you had acted back then.