Boston Real Estate Investing Tips: Market Cycles, Multifamily Deals, and Long-Term Wealth

Willie Mandrell (00:00)
this, business works in cycles. If you’re 25 right now and it seems like a bad time, get yourself in. There’s going to be other bad times, but the real winners are the people that are going to be able to

Well, everybody else was running. Everybody else was waiting for interest rates to decline. Everybody else was waiting for things to change or CNN or MSNBC to tell you that now is the time to buy.

Dylan Silver (01:52)
Hey folks, welcome back to the show. Today’s guest, Willie Mandrell is a real estate investor, coach and educator with over 20 years of experience operating out of the greater Boston area. He’s built a substantial portfolio and focuses on helping others create long-term wealth through real estate. He’s known for his emphasis on patience, discipline, long-term thinking, and guiding investors through the ups and downs of building financial freedom. Willie, thanks for taking the time today.

Willie Mandrell (02:18)
Dylan, I appreciate you having me on the show.

Dylan Silver (02:19)
When you’re around others who are investors themselves and as someone who’s been a full cycle investor, been in this for a minute, what’s the first sign that someone is going to succeed?

Willie Mandrell (02:33)
just hunger. You know, the questions that they ask the time that they spend around the business themselves. You know, I, I think real estate is very difficult, especially in a high price market like Boston, like we exist in the barriers to entry here is, tough. You know, I mean, it’s we’re in a high dollar, target market. So your entry point here, 600,000, 700,000 for a single family, 1.2, 1.3, four multi-family. It’s

tough to get in, you know, even from an FHA standpoint, depending on how you want to do it. So it’s consistency. It’s grit. It’s how do you, you know, I tell people all the time you to get a down payment or to get started, you have to beg, crawl, barrel, you know, don’t commit any crimes, don’t steal. But I mean, other than that, you’ve got to do everything you got to do to just really just kind of get in. The good thing about Boston, though, and some of these high price markets is the barrier to entry is tough. Once you’re in and once you’re, you know, kind of writing

you I’m only competing when I go out for a piece of property and I say, Hey, I really like to buy this thing. I can probably count on one hand how many other investors I’m competing with. And I’ll probably call and a lot of times we’ll get on the phone with other guys and be like, did you, did you? Yeah, I grabbed that. Yeah. So, it’s, it’s a gift and a curse. The barrier to entry is high in places like Boston, but the barrier to entry is high in places like Boston. So it’s, it’s, you know, depending on how you look at it, you know, it’s a win, win, win, lose type of situation. So

Dylan Silver (03:52)
Now this is one of these markets where I’m imagining buy and hold is more of the strategy. You see less flipping. Is that accurate?

Willie Mandrell (04:01)
Outside of the city. you know, Boston itself, Boston Metro consists of like six or seven or 10 different neighbors. can’t remember the exact number, but inside the city. Yes. and, and even then it’s not really a cashflow strategy. And a lot of times it’s an equity strategy. So we can, you know, we’ll buy something for 700,000, put a couple hundred thousand dollars into it, be into it for 900 to a million. It’ll be worth 1.3 when it’s all said and done. That’s kind of our business model, the value add play.

so we’re sitting on a lot of equity, but the cash flows, think barely the three family, the triple decker, basically just kind of holds itself. We also live at Boston’s a very liberal place. So as a landlord, you have to be very tough skinned. You’re always in the wrong. You’re always, you know, there’s, there’s, it’s just, I don’t know how else to put it. It’s just, you’re, you’re, you’re, if you’re a landlord, you’re wrong. So on paper, something should cashflow, but there’s going to be a lot of.

picking a lot of minuscule expenses that are just going to occur over time that basically kind of makes you ⁓ even at the end of the day.

Dylan Silver (05:49)
You know, I’m in a completely different market currently than when you’re where you’re at. And it’s interesting because it’s almost like two totally different real estate games because where I’m at, the multifamily properties and landlords in general are borderline paying tenants to move in. Like they’re offering gift cards and saying, hey, all you need to do is pay first month’s rent and you’re in. There’s no security fee, you know, finders fee, et cetera. And so

Willie Mandrell (05:57)
Yeah, it is.

Hmm.

Dylan Silver (06:17)
One of the things that I’ve seen with Boston is it’s the opposite of that, right? You’re probably paying a security deposit, know, lots of other fees to move in. And then as well, you’re probably looking more for, hey, where’s the space that I can move into, not where’s the tenants that I can find? Because there’s so few opportunities for people to find spots right now.

Willie Mandrell (06:39)
Agreed. mean, I’ve been here, like I said, I born and raised in Boston. I live right outside the city right now. I wanted, you know, to raise my kids in the suburbs just a little bit, but primarily my business. I’m in Boston every single day. And again, I tell people, I’ve said this a thousand times, but meds and eds, and that’s, that’s what Boston’s about, right? MIT is here. Harvard University is here. Northeastern Shared Education is here. Wentworth, we have some of the best schools in the world. Some of the best hospitals, Mass Eye and Ear. People come from all over the world for the specialties that are here.

The education is here and a lot of them stay. It’s a competitive market to live in. It’s a competitive market to rent in. So again, the barrier to entry is high as an investor trying to get in, trying to find a piece of property to rent. But once you do, again, it’s a very lucrative business. Your rents typically outside of this last 18 months are going to see an increase year over year. Your property value because of the rents increasing or going to see, you know, an increase year over year. So

I have not rented an apartment without a security deposit. I mean, even in the last 18 months, if ever, you know, I mean, I’ve probably, we own roughly 130 units here over my 20 year career. Let’s say I’ve had roughly 400 tenants. I would say 375 of them have paid me a security deposit at some point. We’ve had some COVID was a tough time where we were just basically like, I got to fill in this vacancy. let a lot of things slide, but other than that, not too often.

Dylan Silver (08:07)
On a deal level, what’s the most important factors when you’re underwriting a property potentially for acquisition?

Willie Mandrell (08:17)
The most important factor when underwriting for acquisitions is, I mean, it’s always, it’s always price, right? I mean, at the end of the day, we’re trying not to overpay. I think a lot of people here try to get in and they try to, ⁓ they’re desperate to get a deal to get something happening, to get something under contract and you tend to overpay. Here, it’s all about patience. It’s about really understanding the numbers.

Dylan Silver (08:34)
Yeah.

Willie Mandrell (08:40)
There’s deals I’m not gonna lie. I’ve done it. There’s been trophy assets where I’m like, I have to get into the neighborhood. That’s Back Bay. That’s a beautiful neighborhood. That’s one of the most prestigious neighborhoods in Boston. And I’ve overshot that price point, closed on the property and rents. I beefed the rents up or juiced the rents up a little bit and they didn’t perform. And we ended up losing money every month. Some of those properties I still have held onto. And again, going back to the funny thing about Boston is,

is if you hold on long enough, you will win because at the end of the day, those rents are going to go back up and then you know the rents that you did juice in the beginning. It’s just getting to that phase. A loss here is not $200 a month. It’s $2,000 a month and the question is, can you hold on long enough? You know, so

Dylan Silver (09:10)
Right.

That’s an interesting dynamic, right? Because you mentioned Back Bay, right? Historic neighborhood, right? And so when you’re looking at getting into or breaking into an area like that, are you also looking at, well, hey, where is this going to appreciate to? What’s the projected appreciation? Or is that something that’s harder to predict? Like you mentioned recently, things have somewhat stabilized. How are you able to value the potential appreciation?

Willie Mandrell (10:26)
it’s tough. mean, like I said, these 18 months, if you asked me the same question 18 months ago or two years ago, it’d been very easy. mean, we, you know, we see a four to 6 % appreciation rate consistently, you know, and Lee here. And I mean, sometimes it’s, higher than that. I think that’s pretty conservative. These last 18 months, politics, you know, the international community, people coming to the States, people coming to Boston has Sloan, which is, you know, we’re a big international community.

Again, Harvard’s a big international school, Northeastern is, MIT is. So we thrive on international money here. And with some of the rhetoric, and not to get too political, but some of the things that are coming out of the White House and everything else, we’ve seen firsthand it turning international students away, their parents second guessing whether they want to leave their kids here, whether they want to send their kids here. If you’re already

at MIT, you’re going to finish. not going anywhere. It’s the freshman population that we’re seeing in a slow decline. There’s legal battles going on at Harvard right now that are steering some people away. So there’s a lot going on in the political space that is directly affecting us. I tell you this. Of the 130 units, let’s call it 70 units are subsidized housing. So we do a lot of Section 8, VHA, Boston Public Housing, Metro Housing here.

there has been a lot of fights between liberal states like Massachusetts and the federal government. And there’s been some puns funds held up and everything else. And BHA and Boston housing get those funds from the federal government. There’s been times where in the last 18 months, they’ve sent a landlord an email out to 6000 landlords and basically said, hey, we don’t have the money right now. There was a land there was a an email that basically came out and said, hey, we’re going to give you 25 % of your rents right now because that’s all we have.

doesn’t sound like that, that that’s crazy. If you have a thought, you have one apartment, it’s a thousand dollars. You get two 50, but think about this. If you have, you know, a hundred units, 50 units at an average rent of $3,000 a month, we’re talking about hundreds of thousands of dollars that they basically saying we don’t have for you right now. My mortgage company still wants their money.

Dylan Silver (12:34)
I want it to little bit

here.

On the subject of affordable housing, government subsidized housing, markets like Boston, of course, you probably need even more of that. But also there’s an interesting dynamic because you’ve got this big international community, but then you’ve also got people who need that affordable housing. Are you seeing more opportunities for people in affordable housing or are you seeing, like you mentioned, it getting held up? Maybe they’re scaling back as far as being able to provide the money allocated for affordable housing.

Willie Mandrell (13:05)
It’s, it’s, it’s tough. think that the affordable housing space has been basically kind of flat just lately right now. I think people are not moving. I think a lot of people in the affordable space love to move, you know, every couple of years because they get a new space, a new, you know, freshly painted new kitchen, whatever it may be. You’re not seeing that right now. You’re seeing basically a lot of, stabilization, people not moving rents are flat. This is the first time that Boston housing, Metro housing have basically we, we, we, landlords, as investors,

One of the things that we do if we’re in a neighborhood where we’re looking at potential subsidy, we go straight to the to website and we say BHA standard or payment for three veteran voucher. And I’m pretty sure people do that in other states as well. We look at the number and it says 32 next year is 33, 33, 50, 34. This is the first time that we’ve seen 32 come down to 31 and possibly a little bit less than that. And these last couple of years. So with that,

A lot of landlords are not opening up these new places. They’re not building a lot of, you know, section eight housing. So it’s a stability in the market right now. You’re not seeing as many tenants turn over and kind of move from, from apartment to apartment.

Dylan Silver (14:18)
question here here Willie you have a substantial portfolio when looking at acquisitions as a whole do you prefer to go off-market direct to seller you know pocket listing that type of thing or are you buying these deals on market or listed on Crexie loop net etc

Willie Mandrell (14:35)
So it’s a dual question, dual answer, should I say. Beginning of the career, when you’re in the beginning of your career, you have more time than money. And I was able to, and this just like everybody else, I was able to focus on driving for dollars. If you’re old enough to remember bandit signs and I did a ton of mailers and cold calling, I had more time than money so I can spend more time on finding off-market deals, things that didn’t come with a premium, direct to seller, having those conversations, sitting down at the kitchen table.

I don’t have time as a I’m running a property management business. I’m running, you know, I have multiple employees, independent contractors. There’s always a fire for me to put out. So now in my business, it’s more inbound. We do a lot of marketing, talking to real estate agents, educating people, Boston wealth builders, going out there and educating the public and looking for wholesalers, realtors and everybody else to bring us more inbound stuff. We also do. We also keep an eye on MLS as well. But most of our deals come from

not necessarily direct to seller off market inbound inbound leads from wholesalers and realtors that know exactly what we’re looking for.

Dylan Silver (16:24)
Along your journey, as you have scaled, you mentioned some of the pivots that you made. What was something that stands out as maybe the biggest pivot in your journey?

Willie Mandrell (16:35)
The biggest pivot I would say, and I think it came early for me. I bought again, 20 years to 2026 20 years ago was 2006 2006 was I wouldn’t say a bad time to buy, at the time it didn’t appear that way 2007 stock market crash 2008 housing market crash. I remember buying a two family house in Quincy in 2006 by 2009. It was probably 60, $60,000. It was worth $60,000 less than what I paid for it.

The pivot came when I really understood economics, when I really understood the way cycles in the market work. And I’m glad I continued to read, continued to pay attention, didn’t put my head down and get depressed by my recent or entry level fail there, so to speak. We continue to put our head down and make purchases in some rough neighborhoods that have

since really made a transition in 2011, 2012, 2013, we made some of the greatest purchases of properties that have literally tripled in value. Rents have tripled, since that timeframe. So I would say tell your listeners and anybody, know, relatively new to the business,

this, business works in cycles. If you’re 25 right now and it seems like a bad time, get yourself in. There’s going to be other bad times, but the real winners are the people that are going to be able to

Well, everybody else was running. Everybody else was waiting for interest rates to decline. Everybody else was waiting for things to change or CNN or MSNBC to tell you that now is the time to buy.

are those of us who are still out there being aggressive, getting into the market. And those are the people who are going to win when this major upswing happens. I’ll make one other point. I believe, and this is, don’t have a crystal ball or anything like that. I think with the combination of how fluent news is now social media and everything.

I think when things do take an upswing, it’s going to happen at a rapid, rapid pace. And if you’re not paying attention, you will miss a good portion of that upswing. You’re going to be catching the news on the back end.

Dylan Silver (18:36)
We are coming up on time here, Willie, any new projects that you’re working on and then what’s the best way for folks to reach out to you or your team?

Willie Mandrell (18:43)
new projects, I would say I just finished up. what was really cool. We took a, a church, former church and just made it into six, residential units. A again, COVID changed a lot of things. It was five, six years ago, but a lot of mass gatherings were stopped because of, because of COVID churches included. there were a lot of, faith-based institutions, faith-based buildings on the market. This is not a church in terms of steeples and everything else. It was more of a very, you know, kind of boxy.

fit, but it was it 6000 square feet. We took it chopped it up made it into six units and it’s been kind of just a little bit of a pride project for me. It’s been it’s a really cool thing to be able to reconvert or change that repurpose that building into much how the housing that you know Boston much need and then me w Willie mandrell.com w i l l i e m a n d r e l l.com

Whether you are local or not, you can also join Boston Wealth Builders, bostonwealthbuilders.com. We do a lot of virtual events there as well, a lot of educational opportunities through Zoom and everything else. So you can certainly join the group. It’s free to join and definitely connect with us there.