The Village

0:00Hey Boston, you're in the village with Willie P. We are WBCA LP 102.9 FM Boston Community Radio. And we want to uphold that spirit because we want you to have good spirit coming into the village. I teach transgressions your way. Santa shall be converted unto thee. Oh, we are the spirits. So whatever you do, stay tuned to the village. We are in the village. You are in the village. I have a special guest today. His name is Aiden Reagan.

1:06He is the founder of Restore Living. We're going to talk about co-bying and we're going to share what that means because I know you don't know because when I heard it, I didn't even know. So we have a guest. Aiden is going to tell us all about how he got started a little bit about his background and the idea that he wants you to know about co-bying. Hey, thank you for coming on. Hello Willie. Thanks for having me. Nice to be here. So talk to us. Share with us what your vision is. Yes, absolutely. It's exciting. So the concept of co-bying is pretty simple. It's just a couple of households, individuals, families coming together, pooling money. There's a lot of forms that can take, but what we're really excited about is being able to purchase multi-family properties in greater Boston and being able to drastically lower the cost per unit as well as creating some community and living next to your neighbors while you do it.

2:12That's fine because we need to know when we hear how affordability. What the heck is that? You know that word gets used so much. So share with us how it can be affordable for us. Yeah, so it's interesting. The idea of purchasing a multi-family right now, the core concept is that the only groups buying this are investors. So when they're looking at these properties, they are pricing it on what can they charge for rent or if they want to turn them into condos, what can they sell for condos? So by definition, the cost of it, you know, not including profit and not including a few other lines such as property management and vacancy is capped at what you can pay and rent and what the condo costs are in the market. So the idea is if you come together and pull your money to have the same buying power as an investor, your monthly costs should be capped at what you're paying in market rent already and it should be well under what it costs for a condo in Boston per unit.

3:21And you're, you know, it's no different than what you'd be living in anyway if you're renting right now because that is the housing product that you're dealing with. But now you're owning it in the same situation and now you have just the added benefit of being able to control who your neighbor is. So you're saying that if I am in invest, if I co-buy, that means more than one person. Yes, it would mean the benefit of that is that you're buying multiple units, you're yourself are only living in one of them, but you are say you're buying one unit within a three family. So you'd have partners or groups or friends that are purchasing the other two units. Very good. So how is that factored in with the banks? Because I know that if it's our investor, they are looking at the units as being income. But if it's three of us buying into it, what's the difference? What are they looking at?

4:22Yeah, that's a great question. So there are two main legal structures that we look at when we help recommend how a group would go out and purchase this. The route that's probably more simple is the LLC route of forming a basically an entity that purchases this, which is exactly what investors do themselves. So you would, in the eyes of a bank, a co-buying group in an LLC is the same exact as an investor group. So they would be looking at what the potential income is of it. They'd have the same amount of down payment requirement of 20 to 25%. And you would be getting the same rates as what an investor would be. The alternative is a, it's called a tendency in common where you and your other two partners in this case, if it's a three family, are all purchasing it on the deed. And if you're purchasing it, you know, you have to of course make sure that you can afford the monthly costs. And it would be the same as purchasing a regular, a regular free stand in condo or single family where they look at your combined income and see how does that compare to what the total cost of the mortgages.

5:30So again, if you're looking at, if you're going to make sure that it's affordable, we would make sure that that monthly cost is what you can afford. And then the bank would just be looking at it. You know, it's essentially triple the price and triple the income. So it's the same type of equation that a bank would use. So you literally could three people could walk into a bank and say, we want to buy this three family and the bank would look at all three incomes. Essentially, yes. You'd want to, there's a couple of extra steps such as creating an internal set of bylaws that figure out how you function as a group. As far as the bank is concerned, they look at credit scores, down payment ability and job and all the other pre qualifications that they would look at in any other purchase with this. Now in the situation where you have been successful in helping people, what is your job in pulling people together?

6:30Yeah, so the two things that we focus on right now, ultimately as a company, what we want to do is understand this co-bying process and lower all the obstacles to doing so. What that looks like right now is first, the group formation, we call it. So the initial conversations within a group of, what are your priorities, how are you getting into this and, you know, all the other things of how do you, what are your relationships and how long do you want to live here? So the exits and the dispute resolution are really the things that we focus on and that will determine what legal structure you're going to be having, what type of property you want to be looking for and any other, you know, unique situations that may come into play. The second is looking at these properties by unit. So filtering what's on market, looking at it from individual co-bying perspectives and trying to see is this unit that you're purchasing relative to the rent or condo market in that region. So you're able to get it well under what that price is. So for example, some of the property analysis that we're looking at right now, I was looking at some indoor chest today, there's a lot of multi families that cost, you know, 1.2 million for a three unit.

7:39That's 400,000 per unit. The average condo in doorchester is a little bit over 600,000. Wow. So by not doing anything different aside from a couple extra steps of this group formation, you're able to save 200,000 per unit and you can look these up on Zilla right now, they're all over the place because rental wise, that's right where the cap is. But if a group is going in there and purchasing it, they're able to get these deep discounts and they would be operating, you know, they have that same property the way that an investor would. Rather than waiting until the developer sells it out right and you're struggling trying to afford a 600,000 dollar apartment. Exactly. Exactly. And you can. But you have a say in the going in, build in this and you literally help people at these steps. Yeah, exactly. So in that's that, you know, that turning it into a condo is also an option for the end buyer, if they would like to, they can turn them into condos and they would have a little bit more flexibility within each other. You still have the neighbors that you want.

8:48Or you could keep it as a multi family, the group that we worked with in May that had closed on this was exactly this. It was three families that purchased a three family in Jamaica plane. Got a great, a huge property, a good living space that they could all hang out in. They they decided to do this as an LLC and they purchased it that way. And they're keeping it as such and then they have internal governing that once one person wants to sell, they have figured out how to calculate what that could look like. And the process of, you know, making sure that that person both gets the sale price that they're looking for, but also that the person coming in might align with the rest of the co buying group. So I'm hearing that if I, I'm trying to fit you into what I, you know, the, the listening audience. So you're literally the person that I would say I had three people and we wanted to buy a property. We would go to you and say, how would you help us set it up? Exactly. Yes. So I have more of the real estate background and we're working with this woman, Patty, who is a advisor with us.

9:55She has done this a lot, formed co housing groups across Massachusetts. A lot of, you know, they've done these things on a pretty big scale. This is a little bit smaller, but it's still the same steps of what are really the vision and values. What is your reasoning for getting in and out? It takes maybe three to five conversations to clear all these things up. And at the end of it, you'll have a legally sound structure, pre-approvals. And you can start putting in offers on properties as a single group. At what point will we need a lawyer? I would say the lawyer comes in after those initial conversations and before you start putting in offers. So we probably get you maybe 90% of the way there and then you take all of these findings that you've worked with us and bring it to a lawyer and say, you know, can you turn these things that we've already decided on into a legally binding document. So, you know, there's not many, as many lawyer fees as the groups that have done this in the past, we try and go through a lot of these conversations with you so that you can come to them really with clarity on what you want to have that legal structure look like.

10:59That's, that's great. That's amazing. That's, that's amazing. And, and, and, and, and do you actually find the housing for them or they come to you with a specific place that they, they want to be in. Yeah, it's both. So there's a few cases where actually the, the tenants of a property want to purchase that exact property. So a few groups have come to us and said, hey, we want a structure and purchases from our owner. They said they want to sell to us, but we need to figure that out. That's been a case. And then probably more often is groups are coming and saying, hey, you know, we know we want to purchase. We know we want to be saying Dorchester. A few months to figure that out. Can you help us get there? So we really, you know, we, I think the property analysis tool that we have to find these properties is incredible. But there's a lot of other ways that people are finding these properties themselves coming to us. And then we can also figure out that group formation for them rather than both steps.

11:59And, and I'm just curious going back because I was thinking, how did, like, what, what prompted you to really want to. So then there's a, as a means, you know, yeah, it's been, it's been a fun journey. Quite an exploration. So yeah, my background is in real estate. I've been agent with center real to group for over five years now working with multi fa, small scale multi family investors. So these exact property types of two to four units. About two years ago, I created this organization restored living with the idea of what is out there for solutions for this housing crisis. And not only the affordability aspect, but also the quality of life. I feel like a lot of people, you know, the first of all apartments are expensive. But secondly, they're not very fun to live in. A lot of these are older beaten up and and whatnot. So that was the idea. And, you know, through a series of conversations, it dawned on me that the groups that are still able to purchase left and right are.

13:01These investors and it's because they are looking at these properties from a specific math calculation that they have where if they're able to get a property under what these rents or condo prices are, they're able to find money from outside investors, structure it the way that, you know, people who really understand the industry know it's common language to them. And they're able to put these deals in place and really go through this on a repeated process. My thinking and from seeing a few communities that are in life right now and that are thriving is that same idea of if a group is able to pool their money together, so they have the same buying power as these investors. Not only are they able to compete on these properties that, you know, other homeowners aren't looking at because it's just, you know, no individual wealth you're not is looking for three families for themselves, right. But if you are able to pool your money, again, you're getting it at the same cost as these investors, but you don't need a profit line and all these other benefits. So really just learning how these investors thought and then, you know, being a young person in Boston and seeing how everybody else is struggling.

14:11But the fact that we're living in these exact same housing units, you know, if you are planning on living in a particular area for five years, at least you should be purchasing this because you're going to be paying the same amount monthly. He's crazy to come up with a downpain, but it's, you know, once and the more I look into it the more like it's, you know, I am amazed by it by the affordability and the real estate aspect of it, but the people that are coming to the events and that are reaching out. The primary reason they're doing it is because they want to live in community and they want to live next to the people they love and the idea of creating those communities well also addressing that affordability is just amazing to me. And I think that's kind of why we call it a story living. I think there's a lot of great benefits that can come with doing this at scale. So it's been exciting to talk to people and share what we're doing. You're finding that more and more people are having the same mindset. They really can't afford it because of the income and they really, and when you do your seminars, you're finding that more and more people are interested.

15:17It's and not only are they interested, but it's so many different sectors of life that are coming to these things. I initially was thinking about it just as young people trying to afford in the city. But it's also young couples that are looking to establish a set of roots and raise their kids next to their friends. It's older folks that are looking to age in place, maybe downsize, but do so within a community that they can have right next door. There's so many different versions of people that are coming to this with different priorities, but the idea of purchasing and coming together and having a bit of alignment and purchasing as a group is kind of the core theme that comes up left and right. Are you surprised to find out that your intent is broader than you thought? I have learned so much since undertaking this, and so I've learned not to assume every time we make an assumption someone else says, you know, brings up another idea of who should be thinking about this or the benefits that come from it. So it's been exciting and just talking with different people about how, what brings them here is really motivating.

16:22I bet it is. We're in the village. This is WBCALP 102.9 FM Community Radio. The preceding commentary does not reflect the views of the staff and management of WBCAL or the Boston Neighborhood Network. If you would like to express another opinion, you can address your comments to the Boston Neighborhood Network at 3025 Washington Street, Boston Mass 02119 Attention WBCALP 102.9 FM. If you would like to arrange a time for your own commentary, call WBCAL at 617708-3241 or email us at radioatbnntv.org. You're in the village and I'm so excited. I met Hayden, a while back at a workshop and I thought it was so interesting and it made so much sense that being co-buyers, how we thought of it, but you really never thought about it.

17:37You really find somebody who really pushed the issue. And it's a lot, I know that it has to go into it, but finding somebody that can help you work through the process is the best thing. And we're talking to Hayden Reagan. He's the founder of Restoant Living and we're talking about co-buying, you know, pulling people together and having them buy affordable. What is making it affordable for people to really live in the city and be able to afford it on a co-buying platform. So I like that. So tell me, some of the good and bad you have found, because it's always something good and something, what do you found that was the hardest in doing this?

18:37Right, so it's a different journey with every group that we've been working with. I would say the thing that really comes up that is not something to take lightly is everybody on the same page about what they're looking for in a property. I think that the common theme of being able to do this is really motivating to people, but when you start to consider where people are working, what price, what timeline, there's a lot of things that when you're purchasing a property, it is no small feat even if we're able to drop the costs drastically. It's still quite expensive. So even if it's not a forever home, it's at least a handful of years and you want to make sure that what you're getting into is something that you love. So it takes a good while to figure out what exactly you want to budge on, what are deal breakers, and having those conversations upfront and really talking about finances upfront and being clear about your priorities is why we, I think, were useful

19:43in having really bringing up all the things that need to be addressed early so that you can take your time to figure out what those priorities are for you while looking at some properties to kind of see what you like and don't like. But just getting that alignment with a group is take some time and take some effort. Do you ever have one person come to you and say, well, I don't know anyone. Can you find somebody that would do you find that you do that too? Yeah, so that was another assumption that I had broken was I was thinking that everybody coming into this had a group that they knew they were ready for, but a lot of people we've got more than 10 right now that have expressed interest in the concept, but don't know who they want to co-buy with and don't have maybe that network that they really want to get into something on this with. And I think initially I was worried about making sure that it is a big commitment regardless, but if you think about the fact that they're going to be next to each other in their own units, everybody that's living in a multi-family right now is living with at the time when they moved in, strangers.

20:51So there is a little bit more diligence that goes into figuring out who might be good co-buying groups. We're doing a lot more of that work than we expected, but a lot of the people that have, you know, we, some of the people that have formed groups actually found each other at the events that were hosting the one that you were at, we actually had a conversation with two women that found themselves there, that found each other there. So that has been wonderful and I think that, yeah, it wasn't something that we were expecting to handle, but it's been, it's been cool to figure out to kind of mend that together and support that however we can. Wow. We have five, couple of minutes, five minutes, but and I want to make sure that we talk about any advice that you give, that you have, that you want to share, you know, to help people kind of take this journey. Yeah, absolutely. So what I've been finding, you know, when I stand up on these events and talk about, you know, these concepts for an hour, I am, I go through so much detail and I talk about so much and I talk about it with excitement about how it's so easy, and then I go and get feedback from the people and say, hey, what do you think? And they were like, it seemed, I trust you that it's exciting, but I don't really understand yet.

22:10And, you know, what I would, what I want to say is that it is, it is definitely a learning curve and, you know, the concept that we're proposing here, it's not brand new, but it's also not something that's been pushed into the system of housing and, you know, the options that are that are common. But I think if you're starting early and if you kind of take your time and, you know, don't think that you need to learn it all in one session or in one week, or even in one month, but start to slowly take steps in terms of, is this right for me? Is this something, do I want to live in Boston for a few more years and if so, how can that be possible? There are a lot of resources out there for how to find people, how to afford the down payment and some other things. So I would just say, you know, when you start to educate yourself on this concept to be patient with yourself and to say, to understand that it's going to take some time, but also considering that, you know, if you, even if it takes you over a year to figure it out, you are creating something that has a, it's going to be building a foundation for you and the permanence that comes with it, even if it's in this property or selling it.

23:14Getting to the next is getting out of that, you know, consistent annual rent cycle of, you know, raising rents and just the difficulty that comes with housing costs that aren't being able to be controlled. So it takes a good amount of effort, but I think that the benefits on the back end are, you know, something that you can really create roots within communities and I think that's really important. I also think that a homeowner's program is really a homeowner, what they call those classes about a home ownership, a key, because I took years ago before I bought property. Those classes I find are very educational and good because I think people, they don't realize everything that it entails when you're owning that ownership. Do you guys get into that portion of it?

24:16We would recommend, there's so many great home ownership courses out there that have been established that we would recommend. So part of our process is, okay, if you know you want to purchase and say nine months, sign up for that home buyer course, you know, we, we specialize in our piece right here and we recommend, we have so many partners that do other things. The city actually has co-purchasing down payment assistance for this exact model and one of their requirements is getting into home ownership course, so it's important to do that. But you know, once and they also have all of these other resources that they can point you to to make this even more and more accessible, so it's an important piece as well that we would recommend. Right, well tell us information, how do we find you? Exactly, so our website, you can find us at restoredlivinghomes.com and about every month we'll host office hours on Thursdays, it varies on city. Usually we're in Jamaica Plain, next month, next month we'll be in Somerville and kind of moving around depending on demand and then every two months we host a big informational event where you can meet people, hear stories and those are a lot more engaging and you know, drop pretty good crowd.

25:27That'll be the next one there will be mid-November, you can find that restoredlivinghomes.com slash events every day. Say it again before we go. Restoredlivinghomes.com, you can find it at slash events and we hope to see you at the next one because we like meeting new people and hearing and helping with these journeys. Oh wow, thank you. Thank you. Thank you Hayden for coming on and sharing Restore Living. Thank you for sharing that information with us. Appreciate it. And you know, surprisingly, our time has come to the end. So thank you again, maybe you'll come back. Absolutely, I hope to see you again soon. Alright. We are WBCALP 102.9 FM and you have been in the village with Willie P. Until next time, see ya.

26:27She takes a look around. She makes her face a frown. She takes a breath to keep her feet upon the solid ground. She don't like what she's saying. She don't know what she needs. But she can tell that she ain't ever gonna find it here. She doesn't make a sound. She just keeps looking down. But the way she grips her chairs like her body screaming out. And I don't know her name, but as she looks my way, I hear her say good job please. Take me away. No way. Take me away. Take me away.

27:30Take me away. Exit to the street where no one else can see. Who I'll find that she's got burnin' inside of me.