All Forum Posts by: Fan Bi

As someone who has been investing in this exact target price in Providence/ Pawtucket for the past 4 years, it's a **** show. As @Anthony Thompson @Jeff Bousquet and others have said, for these prices expect Class-C or lower which means the target tenant has a combination of volatile employment cashflow and negligible or negative savings. 

You throw in the economics of a turnover on an $800/mth unit, i.e. 3 months of eviction lost income, legal fees, $5,000 turnover costs = your net free cashflow for 3 years being erased from one delinquent tenant.

I'm just saying that I wish we'd gone in with eyes wide open.

@Anthony Thompson @Frank Patalano What do I need to get on your wholesale lists - Omaha Steaks, sushi dinner?

@Jake Noreau Would you be willing to share any updates regarding progressing toward closing? I'm curious what a live situation is like amidst COVID. 

@Lindsey Costello It might be worth checking with your lender or mortgage broker about rates and underwriting. We primarily work with two local banks, one is not lending at least for the next 60 days and the other is requiring 65% LTV. I'm assuming others will also want owner to maintain more reserves.

@Frank Patalano $30,000 a door?!? Where was my phone call?!

Why is it do you think that Woonsocket has been on such a tear the last 3 years, prices have been wild.

cc @Anthony Thompson

@Matthew Kinch Curious your decision to hold onto this via refi vs selling it and roll into 1031 (pre-COVID)?

I'd imagine you're getting $1,400 a unit x2, on a $350,000 base, it's good not great cashflow? I'm asking because we've been in a cycle of:

i) buy, with bank debt
ii) refinance, with bank debt
iii) sell (increased appreciation has made the new yield lower)

The above three transactions in <2 years has meant we're paying a very high percentage of fees (legal, banking) on a <$400,000 transaction.

Thoughts?

cc @Anthony Thompson

@Reda Bennani Always good to see new investors hit the market - helps maintain prices ;)

We've been investing in PVD for the past few years and can confidently state that nothing on the MLS in the past year pencils to a good cash-on-cash return. People have been calling the 9th-inning of price appreciation for at least three years!

The best hope is that COVID creates compression from distressed sellers but given how much stimulus has been coming from the Fed and Treasury, that likely won't happen for another 90 days (at the earliest). 

Granted, if you have wholesale connections, that's a different ball game. We've only been fortunate enough to have done one wholesale deal via @Jesse Andrews (thank you Jesse). Most wholesale deals we've seen are worse than deals on MLS!

@Erica Larence-Penna How has your experience been with being a RI LL? We've been investing in multis in PVD for the past few years and it's definitely been both better (hotter appreciation market) and worse (lower rent collections) than expected. 

@Erin Onsager Have you been happy with your out-of-state investment in Pawtucket, have you doubled down on the area? In my limited experience investing in Providence/ Pawtucket, I've found the economic occupancy to be very challenging. 

Do local investors have thoughts on the pending Pawtucket train station scheduled for 2022? Given that funding has been secured and ground has been broken, it seems like this is all set to take place (even if it does inevitably get delayed). 

Infrastructure, and especially transportation, usually have strong positive correlations with real estate and with Boston continuing to see strong jobs growth from software tech, biotech, finance, medicine, and education, it would make sense that Pawtucket would draft off this.

But there's a close comparison of Wickford Junction station opening up in 2015 with both ridership and local business development being far worse than projected. 

@Anthony Thompson