The Best Places to Live 2008

The Smart Buys in a Scary Market


We know: Between the topsy-turvy prices and the subprime mess, it’s a real estate nightmare out there. But after grilling dozens of brokers and hundreds of industry experts, we’re pleased to report there are some bright spots for jittery house-hunters (and owners). A road map to 29 neighborhoods and towns that are holding their value, or are poised to be big winners when the next boom rolls around.

New to the Market
You’re looking to purchase your first home. You also want to make sure you’re not going to get burned. Point your search to one of these spots, and know you’ll be making a sound investment.

A Less-Costly Free Education
Most towns with great public schools also have greatly overpriced homes. But there are some still-affordable areas where high test scores can be had without taking out that jumbo loan.

Trading Up
You’re moving up in the world, and soon, you hope, into more square footage. These bust-bucking areas also offer the promise of sweet deals and steady long-term gains.

The Bright Side of Foreclosures
Yes, it’s bad news for those losing their home. But their loss could be your way into a prime neighborhood.

Downsizing
You might not net as much as you would’ve three years ago. But when you’re ready to cash out (and give up the chores), your nest egg would be put to wise use here.

Havens for the Recently Unhitched
Two towns that offer the good life for those who’ve given up their better half.

The Fearless Flipper

Would you want to be a real estate investor right now? You would if you were Fran Yerardi, house-flipper extraordinaire, who believes almost no property is too far gone to be rehabbed for a profit—and is more than happy to share his secrets with those willing to roll the dice with him.

See our Best Places to Live Interactive Map.

 



New to the Market
You’re looking to purchase your first home. You also want to make sure you’re not going to get burned. Point your search to one of these spots, and know you’ll be making a sound investment.

IF YOU ARE SINGLE AND…

[sidebar]You want in on gentrification

South Boston
Median condo price: $360,500
One-year change: +5 percent
Five-year change: +34 percent
Despite what looked like a possible oversupply of new construction and triple-decker conversions, condo prices in Southie have barely flinched in the current market downturn. The area’s young, increasingly upscale population, along with a slow influx of trendier restaurants and retailers, points toward a bright future, and some of Boston’s most ambitious developments in decades (the mixed-use Fan Pier project, to give one example) are finally getting under way on the neighborhood’s long-underutilized waterfront.

You need peace and quiet

Ashland
Median home price: $368,950
One-year change: -8 percent
Five-year change: +10 percent
When it comes to nightlife, Ashland offers little more than cricket symphonies. What it does provide in abundance are small houses and fully loaded townhouses, priced in the $300,000s, that you can swing on a single income. There’s also the promise of future gains: MetroWest has been home to a sales-appreciation gravy train in the past decade, and this town sits at the next stop.

IF YOU’RE STYARTING A FAMILY AND…

You value stroller room

Melrose
Median home price:
$405,000
One-year change: -4 percent
Five-year change: +18 percent
This burg has become a refuge for ex-city-dwelling new parents reluctant to give up sidewalk life. The Victorian downtown boasts day-to-day amenities (grocery, post office) as well as other essentials for unreformed urbanites (good restaurants, designer boutiques, the obligatory Starbucks), and more than a dozen playgrounds are scattered throughout the leafy neighborhoods. There’s also a new middle school, and a skate park is in the works.

You like a Rockwellian vibe

Scituate
Median home price:
$482,200
One-year change: +2 percent
Five-year change: +24 percent
Part of the so-called Irish Riviera, this erstwhile fishing village has five town beaches, a bike path, and a rec department on overdrive that organizes everything from kids’ cooking classes to a babysitter training course. Starter-home neighborhoods feature shingled bungalows topping out in the low $400,000s, and some solid elementary schools. The new Greenbush commuter rail line gives the town easy access to Boston, making it ripe for price gains.

You like nonstop activity

Hudson
Median home price:
$310,000
One-year change: -7 percent
Five-year change: +7 percent
The tech jobs that arrived when Intel established a campus here 10 years ago have transformed this once-sleepy mill town. Today young families are flocking to it, drawn in part by pristine single-family homes that can be had for under $400,000. Parents push strollers on a new bike path while kids jam on the just-opened downtown skate park; an adjacent splash pool debuts this spring.


IF YOU WANT TO BE GUARANTEED A QUICK RESALE AND…

You’re handy with tools

West Concord
Median home price: $775,000 (Concord-wide)
One-year change: -5 percent
Five-year change: +24 percent
Industrious DIYers have been sprucing up the small Victorians and multifamily homes in what historically has been the more industrial part of town. That energy has perked up West Concord center, where the town’s original five-and-dime now has company in a quilter’s shop and a wine store.Yet another bonus is entrée to the well-regarded Concord-Carlisle school system.

You prefer an un-suburb

Waltham
Median home price:
$400,000
One-year change: -2 percent
Five-year change: +18 percent
Brandeis and Bentley give Waltham the steady supply of house hunters that is a college-town perk, not to mention racial diversity, lively nightlife, and an impressive crop of restaurants along Moody Street. Commuters benefit from quick access to I-95, Route 2, and two rail stops.

 

THE GAMBLE: Attleboro
After decades of manufacturing declines, this once-thriving industrial outpost is battling back. Its young, progressive, and openly gay mayor, Kevin Dumas, has opened a bike path, streamlined business-permitting processes, and in
augurated an industrial park. A downtown facelift is under way, and $14.5 million has been committed to the first phase of a $60 million residential complex built around a new bus-and-rail hub. If it also can continue to improve its schools, Attleboro may be poised for another heyday. (Median home price, $283,000; one-year change: -7 percent; five-year change: +20 percent)


A Less-Costly Free Education
Most towns with great public schools also have greatly overpriced homes. But there are some still-affordable areas where high test scores can be had without taking out that jumbo loan.

Twenty years ago, diversity in Acton was limited to whether you called yourself Irish-Italian or Italian-Irish. These days, the town (with a median home price of just under $513,000) has sizable Jewish, Indian, and Asian populations. There’s also an exemplary school system—last year, in fact, Acton-Boxborough Regional High School posted the second-highest average math SAT score (640) in the state.

You’ll likewise find no shortage of young scholars in Andover, home of Phillips Academy, as well as a healthy housing market (prices climbed another 4 percent last year, to a median of $539,900). Locals can send their kids to the esteemed prep school at day-student rates—but since at $29,000, that’s still not cheap, the best value is Andover’s public schools, where 72 percent of 10th-graders scored advanced on the math portion of the MCAS, 30 points above the state average.

Over in Needham (median home price: $598,500), the high-achieving schools come without the golden-handcuff mortgages you’ll find in neighboring towns. According to research by Municipal Benchmarking, which studied it against Lexington, Wellesley, and 17 other peer communities, Needham ranks fourth in MCAS scores, but 12th in the tax burden borne by residents. Students in Westwood (median home price: $553,750) also post test scores comparable to those in the more famous W towns—and since 2005, they’ve had almost as nice a place to learn, too, thanks to a property tax–cap override that has helped pay for their new state-of-the-art school.


Trading Up
You’re moving up in the world, and soon, you hope, into more square footage. These bust-bucking areas also offer the promise of sweet deals and steady long-term gains.

 

IF YOU WANT AN EASY COMMUTE AND…

You’re drawn to the South Shore

Hingham
Median home price:
$605,000
One-year change: +3 percent
Five-year change: +27 percent
For years, no amount of Revolutionary-era architecture or swanky boutiques could disguise this harsh reality: Getting from Hingham to Boston meant a brutal Route 3 commute. Now, at last, a rail line runs through it—specifically the Greenbush line, which since debuting in November has been whooshing passengers to South Station in 35 minutes. If Hingham’s on your wish list, you’d be wise to move fast, says one real estate agent, who predicts that over the next few years the train could tack on another $100,000 to the median home price.

You want to be north of Boston

Winchester
Median home price: $664,375
One-year change: -5 percent
Five-year change: +17 percent
Originally built as a summer retreat for wealthy city-dwellers, Winchester has a train station bisecting its pretty town center, from which it’s only 20 minutes to North Station. By car, the trip into Boston takes 15 to 30 minutes, depending on traffic. (And when you’ve got a flight to hop, Logan’s just a half-hour cab ride away.)

You’re okay with taking the T

East Cambridge
Median condo price: $402,600 (Cambridge-wide)
One-year change: -2 percent
Five-year change: +17 percent
Already a tech hub, East Cambridge will be soon be home to NorthPoint, a 45-acre mixed-use neighborhood that will feature office space, retail, and parks, as well as a $70 million Lechmere renovation that’s set to open in 2009.


IF YOU NEED FOUR (OR MORE) BEDROOMS AND…

You want to stretch your dollar

Westford
Median home price:
$485,000
One-year change: +14 percent
Five-year change: +22 percent
If newish 3,000-square-foot spreads make you light up like a chandelier in a double-high foyer, Westford may well be your Valhalla. It has 2,899 four-bedroom properties—we counted—and several hundred with five or more. All the other houses on the cul-de-sac might look just like yours, but the town’s impressive schools and burgeoning corporate tax base make it an all-around good deal. Buyers may soon face increased competition, now that IBM plans to bring 3,000 jobs to the town and neighboring Littleton.

You dig ocean views

Duxbury
Median home price:
$610,000
One-year change: +5 percent
Five-year change: +42 percent
The whaling-era sea captains are gone, but their white clapboard houses remain, coexisting in aesthetic harmony with the Victorian, postwar, and contemporary homes that followed (for those looking here, it does help to have a partiality to gray shingles). You’ll pay in the region of $500,000 for a four-bedroom from the 1970s; in the $700,000s for new or updated construction; and sharply upward from there for an antique.

You want pedigree

Newton
Median home price: $745,000
One-year change: +2 percent
Five-year change: +29 percent
Young, design-savvy professionals have been finding relative bargains in Newton Corner, where antique farmhouses and 1930s-era homes can be snapped up for $600,000 to $700,000. Your buck may go further still in South Newton’s postwar Oak Hill and Newton Highlands areas. Of course, given its diverse population, enviable town center, and two stellar high schools (Newton South’s SATs have officially edged out Newton North’s), there’s arguably not a bad investment anywhere in this city.

 

IF YOU CRAVE A NAME BRAND AND…

You love a (relative) bargain

Wellesley
Median home price: $899,000
One-year change: -5 percent
Five-year change: +24 percent
The tree-lined streets and clapboard homes epitomize genteel New England living. The shopping district might as well be Newbury Street West. And now, thanks to the softening market, Wellesley offers some good bargains, real estate agents say. In 2005, only 35 houses were priced under $1 million; in 2007, there were 100.

You have money to burn

Dover
Median home price:
$945,000
One-year change: +6 percent
Five-year change: +31 percent
Dover is venerable enough to make Carlisle seem nouveau riche. The predominantly Republican rural community is 20 miles outside Boston, but a world away in outlook. Anything under $500,000 is considered a tear-down.

 

THE GAMBLE: Hull
Looking out from Hull, the view is stunning: sweeps of ocean and Boston twinkling in the distance. The problem has been that from the outside looking in, the view is far less scenic. Now, however, the town is making progress with its schools—buoyed partly by tax revenues from beach
lovers bulldozing cottages to build second homes. "If I had money to invest right now, [Hull is] where I’d put it," says Jill Duffy of William Raveis Real Estate. Her rationale: Most of the Victorian homes here are on the beach, and they’re primed for restoration. (Median home price, $326,024; one-year change: -13 percent; five-year change: +20 percent)

 


The Bright Side of Foreclosures
Yes, it’s bad news for those losing their home. But their loss could be your way into a prime neighborhood.

In some of Boston’s most manicured suburbs, foreclosure petitions are sprouting like crabgrass: Last year there were 76 in Newton, 34 in Wellesley, and 16 in Concord. For the opportunistic, the trend is a chance to get into a premium community at a cut-rate price—if you know how to work the system.

While many foreclosures are sold through a real estate agent, some of the best deals come via auction. Since newspapers list them only a week or two in advance, for more notice, subscribe to Banker & Tradesman, which publishes details of proceedings as soon as banks initiate them. Once you find a house you like, you’ll need to make sure there are no liens against it—from the unpaid kitchen contractor, for instance—as those liabilities fall to the purchaser. You’ll likely be asked to provide a certified check for a down payment, and possibly proof of financing. You may also be expected to purchase the property without seeing the inside (but crafty shoppers often offer the current owner cash for a sneak peek).

Before you pull out your checkbook, there’s one more thing you should do, suggests Bob Imperato, a Boston-based Realtor. "I would advise anyone thinking of trying this to go to two or three auctions first," he says, "just to see how it’s done."


Downsizing
You might not net as much as you would’ve three years ago. But when you’re ready to cash out (and give up the chores), your nest egg would be put to wise use here.

IF YOU’RE AN EMPTY NESTER AND…

You’re ready to start having fun

Plymouth
Median home price:
$300,000
One year change: -9 percent
Five-year change: +20 percent
For the assiduous, Plymouth has numerous cozy, reasonably affordable waterfront cottages that can be winterized and turned into retirement retreats. For those done with Home Depot runs, there’s the 3,000-acre Pinehills development. With its three golf courses, swim and tennis club, and Village Green restaurant/shopping center, it’s like "Disney World or Second Life to empty-nesters," says one real estate agent. Different builders have constructed the complex’s varied and neatly packaged neighborhoods (which have quaint-sounding names like Pine Cobble and Winslowe’s View), and options run from huge custom estates to townhouses to 55-and-over condo buildings.

You deserve the good life, damn it

South End
Median condo price:
$535,000
One-year change: +11 percent
Five-year change: +34 percent
As boomers vie with their own grown children for the same luxury condos, competition for the best units remains stiff in this highly coveted quarter. Consequently, it can take a windfall from offloading a suburban manse to afford the big three—concierge, elevator, and covered parking. In the more traditional row houses, the influx of "mature" residents is turning pricing schemes upside down: The upper floors used to fetch the higher prices, but since older residents are less interested in hoofing it up the stairs, the parlor units are beginning to rival or even eclipse them in value.


IF YOU WANT TO REDUCE YOUR ECO-FOOTPRINT AND…

You have a soft spot for sea life

Newburyport
Median home price:
$420,500
One-year change: -3 percent
Five-year change: +20 percent
» The culture of creative reuse runs deep here, dating back at least to the decision 40 years ago to restore the Federal-era downtown. Today, a lot of Newburyport dwellers are gung-ho green. Local group S.E.E.D. is involved in everything from promoting cellulose home insulation, to raising funds for bike racks downtown in an effort to get people to run their errands on two wheels. The chamber of commerce is also getting in on the act, hosting its first Green Expo last month. Buying local is big here—whether it’s food grown on nearby farms, or handmade goods sold at town boutiques.

You like old-school conservation

Lincoln
Median home price:
$1,096,250
One-year change: +27 percent
Five-year change: +32 percent
Composting? Recycling? Community-supported agriculture? Lincoln was doing it before Thoreau set up shop at Walden Pond. Though you’ll pay dearly for the privilege, the outdoorsy rewards of living here are many, courtesy of the powerful Rural Land Foundation (which owns the only mall in town) and like-minded groups that have secured permanent protection for about 35 percent of Lincoln’s land. That open space is now covered with walking trails, or leased to sustainable farmers. The Food Project also does its part by mentoring urban teens to grow organic food for co-ops and shelters. To address the town’s dearth of modestly sized (and priced) houses, planners are taking steps to preserve smaller, affordable homes. Fridolin Hill, Lincoln Woods co-op, and Brooks Road are smart places to start a search.

You enjoy a progressive crowd

Davis Square
Median home price:
$424,000 (Somerville-wide)
One-year change: +3 percent
Five-year change: +29 percent
In the new Davis Square Lofts, housed in a group of reclaimed mills, the floors are warmed by an efficient radiant heating system and the toilets gurgle with recycled rainwater. You can almost imagine such features becoming standard for the neighborhood, as its population of students, hipsters, and the kind of older, moneyed urbanites who like to live among them continues to give the place a progressive tilt. Escalating prices had the Davis Square market looking overheated just a few years ago, but those gains are holding steady even as values have cratered in nearby communities.

THE GAMBLE: Haverhill
Haverhill has the assets (and now some of the necessary backing) to become a real turnaround story. Like Newburyport, it has an almost perfectly preserved 19th-century downtown corridor with a colorful history (before he hit Manhattan, Rowland H. Macy opened the first Macy’s dry goods store in Haverhill in 1851; Louis B. Mayer ran theaters here before founding MGM). Attracted by the picturesque architecture and up-and-coming restaurant scene, a pair of bigtime developers are spending nearly $100 million on new mixed-use complexes in the town center, including a 300-unit conversion of a former leather factory near the commuter rail. (Median home price, $270,000; one-year change: -7 percent; five-year change: +8 percent)

 


Havens for the Recently Unhitched
Two towns that offer the good life for those who’ve given up their better half.

When a marriage busts up on the South Shore, real estate agents say, odds are good that one of the parties will relocate to an increasingly popular destination for the newly unattached: Weymouth. In the densely settled city by the sea, where the median price of a condominium is $201,450, consenting adults can quietly share a cuppa at Dunki
n’ (10 franchises to choose from) or a brew at a neighborhood tavern (countless, and all tuned to the game). The argument can be made, in fact, that Weymouth’s future looks more promising than most newlyweds’. Already well supplied with good-quality, attractively priced townhouses—some of which, on the north side, come with ocean views—it will add 500 units of housing when the first phase of the redevelopment of the 1,400-acre South Weymouth Naval Air Station opens in 2009.

 

Further inland, and slightly down the pricing scale (with the average condo costing $179,500), there’s Marlborough, where the Newcomers and Neighbors Club hosts regular adults-only mixers. At Speakers Night Club, another singles stronghold, there’s karaoke night on Friday, live music on Saturday, and Brazilian dance on Sunday. Not that such contrivances are necessary: Insiders say transplants looking for romance should head to the South Bolton Street Starbucks. "I can’t tell you how many relationships got started in that Starbucks," says single Marlborough resident Susan Alatalo, a publicist at the town’s Arts Alliance—whose popular free Saturday morning performances in the town center have themselves become yet another outlet for the lively postmarital scene.


The Fearless Flipper

Would you want to be a real estate investor right now? You would if you were Fran Yerardi, house-flipper extraordinaire, who believes almost no property is too far gone to be rehabbed for a profit—and is more than happy to share his secrets with those willing to roll the dice with him.

By Daniel McGinn

Photo by Kathleen Dooher

 

The two-family house at 95 Hollingsworth Street in Mattapan has seen better days. The paint on the porch is peeling. The aluminum siding is weathered. Inside, the empty second-floor apartment is pure squalor, with plaster hanging from the ceiling. The owner, Fran Yerardi, motions toward the back of the house. "I’ll show you where he did the deed," he says, walking to a dingy bedroom. Yerardi points to blood splatters under the window and remnants of crime-scene tape on the door frame. Two years ago, the home’s former resident, a 70-year-old retired machinist, was allegedly beaten to death in this room by his 41-year-old petty-criminal son, who then dragged his father’s body to the basement and cut it into pieces, dumping the head and limbs in a yard a few miles away. Back in the kitchen, the woodwork retains a coating of the powder that detectives used to lift fingerprints. Out front, the victim’s name is still on the mailbox.

Last fall Yerardi, a West Newton–based real estate investor, purchased the 2,800-square-foot duplex for $209,000. "This is an okay house," he insists. He walks through the gutted downstairs rooms, explaining his plan to convert both apartments’ dining rooms into bedrooms, then to resell the property as three-bedroom condos. "The way I look at it, the ceilings are high, the doorways are awesome, the hardwood floors are perfect," he says. "It’s got a good roof, good windows—it’s ready to [renovate]." If you factor in what Yerardi has spent to empty the home of garbage and demolish the downstairs walls, as well as the interest on the money he’s borrowed to buy the home, he’s already invested $225,000. But after $100,000 more in renovations, he hopes to sell the pair of condos for $500,000. True, the house’s history presents some challenges: Twice Yerardi nearly sold the place to people who intended to rehab it themselves, but each time the neighbors scared them off by vividly recounting the murder. Still, he’s not worried. "It is what it is," Yerardi says. "We’ll get out of it in a couple of months, and we’ll make money on it."

He walks down the stairs, shuts the door, and secures the lockbox. As he strides toward his Jeep Grand Cherokee, he looks back at the decrepit house and utters the phrase that has become his mantra since he became a full-time real estate investor two years ago: "Who else is going to buy that house but us?" That is, who’d buy it before he’s finished transforming it—at which point he expects to have no problem finding someone who will dig deep to take it off his hands, and give him a six-figure profit for his trouble.

This seems like an inauspicious time to try to profit from investing in homes, what with Massachusetts, like much of the nation, now mired in a housing downturn that’s not just brought a jarring end to a half decade of sharply rising prices, but also appears likely to exact a lot more pain before it’s through. In 2007, lenders foreclosed on 7,653 homes statewide, more than double the total seized the previous year. In Suffolk County, the median home price dropped by 5.7 percent, from $350,000 to $330,000, according to real estate research firm the Warren Group.

As politicians debate proposals to ease the skid, however, another group views the current atmosphere a bit differently. Sure, it’s a lousy time to try to sell a house, but it can be a fabulous time to buy one. That’s giving hope to a new generation of real estate speculators, who continue to tune in to Flip This House and crowd into meetings of the Massachusetts Real Estate Investors Association. Where some fear the worst housing market since the Great Depression, others are seeing a great chance to scoop up deals.

Yet even among those determined optimists, few are buying as aggressively as Yerardi. The 40-year-old married father of three first tried his hand at real estate in the mid-1990s, a few years after opening Yerardi’s Restaurant on Watertown Street in West Newton. He started by buying homes adjacent to the restaurant and renting them out. Every so often, he’d buy a house to rehab, doing some of the basic work—like demolition and painting—himself. During this time, Yerardi also became active in Newton’s chamber of commerce, and was asked to join the board of directors of a local bank. Three years ago, near the peak of the housing boom, the bank hosted a strategy session. There, Yerardi learned about homeowners’ fraying balance sheets and the growing risk of a housing downturn. Seeing the opportunity that would create, he decided to make property investing his full-time gig.

In 2006, Yerardi paid $50,000 to become New England’s first franchisee of Home-Vestors, a Dallas-based company that teaches operators to flip houses. Founded in the late 1980s, it today has 260 offices across the country, and provides people like him with training, financing, and advertising—via those billboards that scream "WE BUY UGLY HOUSES"—that yield a steady flow of owners looking to unload their homes. Greater Boston, with median home prices topping $300,000, is considered a tough place to ply such a trade, but in less than two years Yerardi has earned a rep as an unusually savvy operator. "He knows what to zero in on, to focus on the issues that will make him money," says HomeVestors CEO John Hayes.

In a perfect world, Yerardi aims to buy a home a week, to own nothing for more than six months, and to earn a minimum of $20,000 per home. With the market as soft as it is, the first goal is easy to achieve. But the corollary is that it’s gotten much harder to sell the homes he’s rehabbed. So Yerardi and his four-person staff spend much of their time on tactics that wouldn’t have been necessary a few years back—courting prospective purchasers, working with mortgage companies to line up buyer financing, and helping novice home-flippers work deals. At any given time, Yerardi typically has a dozen homes on his hands, each costing him an average of $150 a day in interest. For all his confidence, he is not blind to the risks involved. Inside his offices, he constantly can be heard saying, "I’ve gotta get this house off my plate.&qu
ot;

 


There’s an old axiom among property investors: Nobody ever makes money selling real estate; they make it buying real estate. The key to success, in other words, is acquiring your properties at deep discounts. For Yerardi, that means paying a mere 65 cents on the dollar.

It’s just past lunchtime on a January afternoon, and he’s in his West Newton storefront, looking over a file on a homeowner in Mattapan. The woman’s house is set back on a dirt road. She’s getting older and wants to move. Yerardi notices that she owns the house free and clear; without a mortgage to pay off, she may be more willing to strike a deal. Yerardi gives her a call to chat. "We’re almost like a car dealer," he tells her. Anyone who trades in a car to a dealer knows they’re getting a lower price than if they sold it on their own, but people make that tradeoff for the convenience. Home-Vestors, he hopes, offers the same appeal.

Most houses Yerardi sees have serious flaws. If they didn’t, their owners would be calling a broker instead. Once in a while he’ll look at a house in an upscale suburb, but more often Yerardi is inspecting basements in places like Brockton, Dorchester, and Mattapan. The worse shape they’re in, the more he likes them. As he gathers his flashlight and tape measure one day, an assistant tells him about a call from a man who’s inherited a place in Dorchester that’s infested with pigeons. The assistant hopes to visit in a few days. "I’m coming with you," Yerardi says excitedly. When he hears about a house near Worcester with a maggot problem so bad its broker refuses to step foot inside, Yerardi enthuses over it as if it were a waterfront manse. Late last fall, assistant Laelea Skerrit called him from a "buy" appointment in tears: The house had an extreme flea infestation, and she refused to go inside. Yerardi ordered her to drive to CVS, buy flea collars, and wrap several around her ankles and wrists—then get back to that house. Anything that scares off other property buyers is great news for Yerardi, since it makes the owner more likely to sell to him at a bargain price. Who else is going to buy that house but him?

Yerardi drives to Mattapan for his appointment. The woman’s home is nearly impossible to find, in a thicket of woods down a long muddy road hidden behind a condo complex. Inside, paint cans litter the floor and dishes crowd the counters.

As a HomeVestors franchisee, Yerardi has received weeks of training in preparation for the conversation that unfolds. He tries to get a feel for the woman’s situation. She bought the house in 1980, paying $25,000. She wants to move to a new home and doesn’t want to worry about fixing this one up in order to sell it. She doesn’t know what the house is worth, but her college-age daughter checked some Internet sites and came up with $340,000.

Yerardi politely looks around. Upstairs are three small bedrooms with low ceilings. The sole bathroom is downstairs, off the kitchen, its leaky shower patched by a plastic grocery bag. He asks if the city plows her dirt street. (No, she snowblows it herself.) Is the house hooked up to city sewers? (It is.) He asks her rock-bottom price. She tells him she wouldn’t sell for less than $200,000. Yerardi excuses himself to his car to crunch some numbers.

In the car, he checks a listing for a house around the corner, in better shape than this one, priced at $260,000. He jots numbers on a sheet of paper. "Her price"—the $340,000—"is unrealistic," he says, particularly due to the home’s isolated location. While his offer will be below the woman’s $200,000 threshold, he hopes she’ll be attracted by the fact that he’ll allow her to close whenever she finds a new place to relocate to.

Back inside, he tells the woman flatly, "I’m not going to be able to meet your number." Their conversation meanders, but it’s clear the woman still wants to know what he would offer. He pulls out his notebook and walks her through the math, just as HomeVestors has taught him. Her house, if it were perfect, might be listed at $260,000, not $340,000, he says. But getting it ready to sell for $260,000 would entail $30,000 of repairs. And if it’s listed for $260,000, a buyer is going to negotiate it down. If she uses a real estate agent, she’ll pay a brokerage commission of $12,500. Then come the closing costs. All told, he figures she’d be lucky to walk away with $190,000. Yerardi is willing to offer $161,075 today—and since Home-Vestors provides him quick financing, he’ll be ready to close in three weeks.

The woman is disappointed. "Can I think it over?" she asks. They agree to talk by telephone in five days. "That’s definitely not going to be somebody’s dream home," he says in the car. But after Yerardi’s team "fluffs and buffs" it—new paint, new carpets, a new kitchen and bath—it could look great to the right buyer. And since Yerardi’s employees are constantly cultivating potential purchasers, whom they track in specialized databases, he even has a particular buyer in mind, a single mom with two children in a tough part of Dorchester. "That would be a step up for her," Yerardi says.

 


Many of the homeowners who sell their properties to guys like Yerardi tend to be desperate, ill-informed, and persuadable. That troubles some observers. Bruce Marks is founder of Neighborhood Assistance Corporation of America, a Jamaica Plain–based advocacy group. While he has no specific complaint against Home-Vestors or Yerardi, he believes many real estate investors are taking advantage of owners in financial trouble. "It’s a further exploitation of hard-working people who are desperate to keep their homes," Marks says. For his part, Yerardi says most buyers are grateful that he’s helping them get out of a home they no longer want.

 

But watching Yerardi happily sign contracts to buy houses filled with maggots and bloodstains raises a bigger question: How on earth does he expect to resell them at a profit? His long hours of manual labor and networking with first-time house-hunters is part of it—but above all, his business model is based on the belief that no matter how unattractive a home might be, it still represents a small slice of the American Dream to someone further down the ownership ladder.

Many of his sales are to other investors, who will make over the properties for themselves. To help convince some of these entrepreneurs to buy from him, Yerardi mentors new rehabbers on exactly what fixes will maximize their returns. Joanne Rodrigues, his design-savvy assistant, even accompanies clients to choose cabinets, colors, and fixtures. In November, Belle Borde, a nurse supervisor from Boston, purchased a home in Shirley from Yerardi for $150,000, putting another $12,000 into it for renovations. On a January afternoon, she stood waiting for a potential buyer to view the home, which she’s listed at $219,000. With a rehab in Boston also in the works, she admits she’s a bit overextended. "I need to sell this house, like, ASAP," says Borde, who’s never flipped a property before. Joan McCabe, a 72-year-old medical records worker at Brigham and Women’s Hospital, is another Yerardi protégé. She paid him $335,000 for a six-bedroom home in Jamaica Plain that she hopes to resell this spring, post-rehab, for $450,000. "Fran really cares about us doing well with this property," McCabe says, adding she’d love to buy more houses from him.

In addition to lavishing attention on what he hopes will be repeat customers, Yerardi is employing new tricks to spark buyers’ interest. One recent afternoon, he’s standing in a five-bedroom home in Everett. He’d bought it for $222,000, and his team has decided to auction it off using a technique called a round robin. Yerardi placed a newspaper ad listing the house at $199,900, and inviting buyers to an open house that weekend. The a
d said the house would be sold to the highest bidder on Sunday evening.

By Sunday afternoon, dozens of people have eyed the property. The house is structurally sound, with a roomy foyer and a nice fireplace. But the kitchen and bath require a full renovation, the floors and windows need some work—a typical fluff and buff. Once it’s fixed up, he believes, the home will be worth $350,000. Yerardi considers it perfect for a handy first-time homebuyer, and he’s got a mortgage broker standing by to fund the purchase and renovation costs in a single loan.

At 5:30, Yerardi is back in his office. Altogether, he’s received 17 bids, the highest from an engaged couple named Michael and Nicole, who’ve offered $237,000. Yerardi calls the bidders, one after another, reading from a prepared script. He asks if they’d like to drop out, stand pat, or up their bid. He expects the process to go quickly, but things bog down. He repeatedly ends up in voice-mail. One bidder doesn’t speak English. After an hour of phone calls, he’s left with seven bidders and a top offer of $241,000.

Yerardi’s team is loath to sell the house for less than $255,000, but Yerardi has grown fond of Michael and Nicole. He tries to coax them to bid a little higher. "If you just bump it a bit more, the house is going to be yours," he tells him. A few minutes later, Michael calls back and bids $252,000.It’s 8:14 p.m. Yerardi has missed putting his kids to bed, and now he’s missing The Amazing Race. He calls the rival bidder, Marabella, and makes a token push to get her to top Michael’s number. But his heart isn’t in it. He’s happy the young couple won the house. He’s happy for himself, too. After expenses, Yerardi will make $22,000 on a home he’s owned just three weeks.

It’s not exactly a scene from It’s a Wonderful Life, but the thought of the soon-to- be newlyweds living happily ever after in this Everett flip is to him a heartwarming image. It’s also short-lived: As so many deals have done lately, this one blows up when the couple’s mortgage broker takes a closer look at Michael’s credit card debt.

The setback, though, is only temporary. Within two weeks, Yerardi has convinced an investor to pony up $260,000 for the home. After a little work, he expects, the new investor could sell it for a profit of $40,000. Another house is off his plate—and somewhere out there, perhaps down a long dirt driveway, another vermin-infested home stands waiting. Who else is going to buy it but him?

ADVERTISMENT