All Forum Posts by: Colleen F.

If you want to decrease occupancy advertise it as a two bedroom with an office or something along those lines. If you do that it will change who comes to look at it. This may have the outcome you are looking for.

First , I love historic properties and have renovated some. However they are not an easy fix. It is the structural stuff that can blow the budget. If it is on the MLS your offer should include inspections and you may want a specific structural and of course pest inspection given the age of the house. If significant issues are found take a contractor and get an idea of the real cost to fix.

Now on the topic of the national register of historic buildings be careful. Unless you intend to restore wood windows and other specific elements you might want to skip this. I think if you look into it there is no real increase in value based on registering and you may be forced into more costly historically correct restorations. For example you can restore old windows (this is as costly as replacement) or you can be forced to use historically accurate reproductions, also costly. If you are renovating to sell this can cut into your profit and any sweat equity you put in. I like to do things right but I am practical on this point and I want the final decision to be mine as much as possible. Also any expansion of the property may not be considered acceptable for a historic registered house.

Capitol gains well, if you flip you pay the tax. You need to talk to a tax guy about your specific situation. I do wish you luck there is nothing like bringing an old house back.

We just purchased a multifamily and it was our first experience having to get a commercial loan. I was unhappy with the initiation fee but learned it was usual in commercial. They wanted 25% of purchase price down, 1.5 % initiation fee, 20 yr amort/5 yr fixed at 4.6% interest rate. We are in RI. We only have 3 property loans right now. Not sure if having more in the property is good or bad but it was what the bank insisted on. In your situation it would not hurt to look around.

Thanks all for the welcome. I have been learning from everyone here already so I am hoping that I have some lessons learned that I can pass on.

In any case it is worth not doing it yourself. I always found taping and mudding tedious and there are people who are good at it and those who are not so make sure you hire someone with real experience. we got a 2 k quote on a small 3 br in NJ so I have to run those formulas to see if it was a good quote.

Who is paying heat? And what were the repairs? Those would be my questions. Utilities you can probably verify, are those last 3 units driving the utility cost in some way that is aviodable. Other then that the cleaning/maintenence is hard to judge, Colorado, is it plowing? that cost seems high.

We own property 1.5 hours away and sometimes it can be a pain, refrigerator (brand new) dies or you get a big storm and the power goes out and its not their house so they don't think about the pipes freezing. We have a property manager so I would run the numbers with a property manager. Even with that some of the problems are yours because no one will care like you do. So consider , how flexible can you be if you need to go to the property and how much will you want to go. If you can get responsible tenants and you can let go of some of the stuff, you can do it.

Lurking a bit but thought I would introduce myself. I am Colleen and I am an MA resident but invest in Rhode Island. I have a family and a day job but seem to gravitate to these old rehabs pulling us into some interesting transactions. I have been a lanlord off and on over the years due to various moves. Currently have a student rental in Narragansett and just closed on a 6 unit nearby! If it needs rehab and its historic I can't seem to pass it by...... (and of course the numbers look ok too) I hope to do a successful rehab on this multifamily and have it be the start of building a profitable rental business. I am also a reluctant part owner of a Sandy damaged 2 Family from my parents estate but that is another story. I would call it a rental but no rent...

Anyway so far I found BP to be a wealth of information and an opportunity to benefit from others experience. I hope to meet some other RI investors and understand the multifamilymarket.

good luck on this investment, I noted you say

> The $4500 credit and security deposits more than covered all the closing costs and left us walking away with over $2400 at closing.

Remember you need to escrow the security deposits. You are not really walking away with them. You should expect to have to return them to your tenants at lease end or eventually put them into the apartments for repairs if your tenants damage the place. that part of the closing isn't really your money.

If you keep it under 4 units you don't need a commercial loan so that may keep the cost down. Don't use a mortgage broker if you don't need to. We made the the decision to use one because it was our first commercial loan and the broker commission of 1.5 % of the loan is a total waste. If i knew then what I know now. Anyway that alone could decrease your closing costs. Components are similiar to any house although pre-purchase inspections may be more. if you are not on sewer in MA title 5 inspection of septic is extensive, don't know what it costs now , we live in MA but invest in RI.