All Forum Posts by: Fernando Vitorino

@Luan Oliveira

Hey Luan. I agree. I’ve seen a recent investment in speed trap setups. The speed at which people travel on Cranston st, union ave, and up and down side streets is absolutely absurd. I’m glad the city did this and I hop they generate enough funds from these speed racers to fix sidewalks.

Last year every street from Westminster to Cranston st. received new water lines. Big step considering the water quality we were dealing with.

Re-vitalization takes time. It’s definitely been happening in providence though. Don’t forget this is not a major U.S. city. It’s limited to its population and amount of business that it brings in

@Alec Pulst

Hey Alec. Speak with Justin Hertherington. I believe he is still with Lenox Realty. He knows the west end and the east side better than anyone one I know. He is extremely savvy and has relationships with property owners from all walks of life, some of which who own entire neighborhoods. He is very good at knowing why, when, and where the next neighborhood will do well. He himself purchased an empty lot and built a beautiful property that is out of this world at a time and in an area that most investors did not want to deal with. The neighborhood he built in is now thriving and he is doing extremely well with the property.

Justin - +1 (401) 952-6096

@Marc Rice 

With all the new restaurants, breweries, coffee shops, etc popping up in providence throughout the past couple of years curious as to how you thing local government could do better? Id argue that local government is actually doing decent given the circumstances. The city closes vehicle access to federal hill on fridays and saturdays to allow higher foot traffic. Police are on foot or bike more than ever. Ive had leaning trees cut in front of my property a day after making an inquiry. The city sets traps for free in neighborhoods with rodent issues. Ton of new bridges / road work. 

Things could always better but I feel as though providence is in a decent economical position. 

@Don Spafford

Don, did some basic analysis on Idaho falls. Personally I do not find Idaho falls very entertaining. No major university, financial district, restaurants, attractions, etc. Just a ton of single family developments. To your point, Idaho Springs may be up and coming but it will be many years before the masses migrate to this city. Again, there is definitely upside but not enough for my to invest long distance. 

Curious to know how everyone else feels about this?

@Corby Goade

Great feedback Corby. I don’t think your being difficult at all. On the contrary, your findings are pretty darn accurate. I purchased a five unit commercial residential property 2 1/2 years ago for $595,000 thinking that the market had reached a peak. For me at the time, I saw a case where rents justified the purchase price and the overall analysis of the building looked good. Today, I could sell this property for right around $750,000.

Seems like the take away from this thread is as follows;

The deals are always out there. They just need to be found.

Purchase price is important although higher prices should not discourage investor from buying considering rental figures make sense.

Finally, stick to what you know. Investing 20 states away in uncharted territories seems silly when there is a market/economy surrounding you with potential as long as you are creative and hungry for a deal.

Personally, I think prices are inflated throughout the entire country and that within the next 6-12 months there will be some sort of correction. I also think it’s worth investing in other cities/states once you’ve build up enough knowledge and footprint in areas that you know the best.

My goal for creating the thread was to see if everyone else was experiencing the same levels of price elevation and or investors were still finding deals.

@Jonathan Bombaci

Hey Jonathan. Awesome insight. Thanks for that. I totally agree with the points you made although I would argue that cash on cash return is a scary thing for me at the moment simply because the next 6 to 12 months could put a lot of investors cash on cash return in negative territory based on an increase in foreclosures, the Fed increasing rates, and an overall increase in inventory. Does this effect your decision making at all? Do you see a case where loans will be under water once some if not all of these things occur?

Also - I have witnessed a ton of investors in my area taking Bostonian tenants by the masses throughout the last year. I myself have an MIT professor in one of my units? Have you seen a lot of Boston foreclosures as a result of tenants leaving the city?

Do you see a case where property values in Boston have decreased as a result. Coupled with this, do you think that now would be the time to buy a property in Boston based on the fact that people will eventually return to the city thus increasing demand and the price of rent?

I have a good friend who works at a major financial institution in Boston. Once Covid hit, he purchased a single-family in Ludlow Vermont where currently works from home. He still pays 2200 in rent for his apartment in Southie Boston simply because he does not know if he will ever have to return to the office. He notes that $2200 is a very cheap rate. this is crazy!

@Corby Goade

Thanks for the insight. It seems as though Boise Idaho is definitely a promising rental hotspot. Personally, I look for properties with three or more units. Preferably a four unit in which three of the unit cover the mortgage. Not sure if you I see a lot of these types of properties in your area at entertaining price points? That being said based on your feedback, it seems as though the time to have gotten into your rental market was a few years back. I’d argue that you’d probably be overpaying in today’s conditions. As is the case in most cities. What are your thoughts?

This obviously excludes off market deals, whole sale deals, cash deals.. etc

@Ryan Kelly Not necessarily seeking investment opportunities elsewhere. Personally, I am fed up with the current market environment in my city/state. Rather than maintaining a frustrating pursuit for that next deal, I took a step back and decided to rekindle my BiggerPockets involvement. I wanted to know how other markets, investors, and economies are getting through the current conditions and whether or not there is value/opportunity elsewhere. I wanted reassurance, confidence in my current market of expertise. After receiving insight from everyone hear on BP it seems as though my initial thought process is validated. There seems to be tremendous opportunities in many cities throughout the U.S. however in most cases rents do not justify purchase price in these locations nor do property values seem to reflect a healthy trend. In some cases im still calculating suitable cap rates but as @Jay Hinrichs put it, rental income is simply one component and not always the most important. 

Its important to note, my math is based off a situation where one would take advantage of an FHA type financing with 3%-5% down. Not that I personally need to use this type of financing but, through my fiancé, we have the ability to use this. In 2015 I bought a 3 unit in a C class area for 145k using FHA. Turn key, completed updated with new electrical, plumbing, furnaces, etc. This was a section 8 property. My monthly return was $975 while occupying one of the3 units. This type of situation is very hard to find these days. And it seems as though the nicer the property and the better the area, the less overall return.

Based on everyone's feedback, im motivated to continue the pursuit in my state. Great investors find great deals no matter where they invest. I don't see significant justification in investing in any one particular state unless I were to physically move to that state based on recent analysis. This is especially considering the hassle of dealing with long distance property up-keep.

@Remington Lyman

Can you provide insight as to why?

Curious as to how other investors acquire their data / market analysis

@Jorge Vazquez fantastic read. Ive hear great things about the Tampa market and I think Tampa's economy will continue to prosper although properties are still over priced in this area as well. A Duplex in Hyde Park for example selling for $790k generating $1500 in monthly rental income per unit just simply is not attractive to me. I also see a case where you have to compete with the sky scraper rentals which are being built like rapid fire. It looks as though the rental prices are all over the place even when condensing the search area and assuming same amenities. Id imagine the reason why Graystone is getting a 12% return is because the are getting crazy whole sale deals, going in with cash obviously, a ton of leverage, etc. Not everyone has that kind of power. Can you provide insight on this? How for example does someone looking to owner occupy using FHA generate a decent cap rate?

@Marc Rice - East Side is for the people with old money, the big shot Boston/New York investors, and those that arent afraid of overpaying. Example: I have a good friend selling a 2 family for 1.2Million on the east side. He paid $345k for it in 2012. As we have already discussed, this is part of investing and I respect it but, its another example of how prices are inflated and people are blinded by fancy areas, low interest rates, scarcity of inventory, etc. Upside to the east side is that you get a high influx of awesome renters who pay. And believe it or not, the 1.2Million dollar 2 unit that my friend is selling  get 8K in monthly rental income which justifies the purchase price for those who don't care about the actual property value. 

@Tyler Williams - thanks for sharing. I will be utilizing that source. Much appreciated