Providence, RI buy and hold house hack

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Providence, RI buy and hold house hack

Jake Noreau
Rental Property Investor 路 Providence, RI 路 Member since 2020 路 18 posts 路 6 votes

Hello Providence!

So I am looking to buy my first property (ideally sooner than later) ... My timeline could be 3-6 months if I went conventional, or much sooner if I went FHA through Rhode Island Housing. I have a few questions and wanted to also just open the floor to meet other investors and real estate professionals in this market!

My plan is to house hack my first property, and eventually move into BRRRRs a few years down the line. I'm looking at multifamilys with 6 or more bedrooms (or potential for additional bedrooms) in the East Side neighborhood 02906. Obviously, this is a very desirable - and pricey - area as there is little on the market. I'm wondering if people have any insight on finding deals in this area. Do a lot of people already drive for dollars here? My second choice neighborhood is Elmhurst, and would be perfectly content in this neighborhood, though I've heard recently zoning laws have changed for the R-2 zone to restrict 3+ unrelated people from living in one unit.

Any insight on financing in RI, different neighborhoods, just a hello from fellow Rhode Islanders, and any advice with the market the way it is as it relates to buy and hold house hacking in a B+ to A market.

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Brett Read
Realtor 路 Providence, RI 路 Member since 2016 路 32 posts 路 26 votes
6y

Hi @Jake Noreau, as @Anthony Thompson mentioned you can get more for your money in Elmhurst (a lot more). I have a 2 family in elmhurst that pulls great rents (1200 for a 2BR with no utils included) and I didn鈥檛 have to pay the big price tag associated with the East Side. 
It might be worth prospecting for rent by owner listings in the areas you鈥檙e looking in to make your efforts more efficient. 
As for financing I recommend talking to local lenders who understand the R.I. nuances. I can recommend a few if you鈥檙e shopping for a mortgage. 
Feel free to message me if you have any specific questions.

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  • Jake Noreau
    OP
    Rental Property Investor 路 Providence, RI 路 Member since 2020 路 18 posts 路 6 votes
    6y

    @Anthony Thompson Quick question Anthony: did the appraisal for the property you're closing on take that much longer than normal to receive the report for any reason besides slow down? I know things are generally moving slow right now, just wondering if perhaps this was a commercial property or some unique house with a scarcity of comps that may have made the appraiser's job harder? Just wondering.

    @Brian Allanbrook Thanks! And congrats on your new place as well! Have you had any difficulties getting tenants? I'm just considering you were probably trying to fill vacancies right when this started up. I'm sure you were thorough when screening; I guess I'm just wondering if you had the foresight to avoid, say, tenants with at-risk hospitality jobs?

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  • Anthony ThompsonPro Member
    Buy and Hold Investor 路 Cranston, RI 路 Member since 2013 路 1k+ posts 路 1k+ votes
    6y

    @Jake Noreau I don't know exactly why it took so long. I wasn't in touch with the appraiser, only my bank rep, and he wasn't very forthcoming on specifics.

    The two working theories I have are: 1) a glut of refinances due to even-lower interest rates, and 2) things relating to the government CARES act programs like the EIDL. I think the latter is more likely to affect bank reps than appraisers but it's possible there's an appraisal tie-in somehow.

    It's commercial loan on a residential property, so it's not an especially challenging or unusual appraisal by any means. If anything I think those appraisals might be slightly easier since they give more weight to the income approach rather than the sales comparison approach, and he didn't go in any of the units so he wouldn't have had to make any adjustments for unit condition.

    Or for all I know, it's none of the above. Maybe the appraiser had someone fall ill in his family. Like I said, I wasn't in contact with the appraiser directly. But I have heard anecdotally from conversations with other investors that 1) private lenders are pulling back until they see the effects of the economic contraction, and 2) closings that are happening, seem to be taking longer. It's possible #2 will get better as people adapt to new ways of working, but we'll see.

    Another example of things taking longer is that city/town halls aren't open for recording, so documents are having to be mailed in. Title companies have adapted to this with gap insurance but it still introduces yet another delay in getting the deal completely done.

    (All taken with a large grain of salt of course - it's fortunate to be discussing such problems at all when many people are in much worse circumstances right now.) 

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  • Jake Noreau
    OP
    Rental Property Investor 路 Providence, RI 路 Member since 2020 路 18 posts 路 6 votes
    6y

    Just to follow up, got the appraisal report, just shy of a week since it was appraised. In my case, the appraiser actually walked the property and took pictures. So a little delayed, but not quite as bad as two weeks!

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  • Anthony ThompsonPro Member
    Buy and Hold Investor 路 Cranston, RI 路 Member since 2013 路 1k+ posts 路 1k+ votes
    6y

    @Jake Noreau that鈥檚 great, very glad to hear that wasn鈥檛 a problematic delay for you 馃槉

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