All Forum Posts by: Anthony Thompson

Ray, I sent you a private message.

@Sherwin Vargas The bank will scrutinize your source of funds for the down payment and deny the loan if you're getting the down payment as a loan from someone else, even if it's a second mortgage after theirs. 

The usual way around this is for people to get funds as gifts from family and friends, but the lender will want a gift letter from each saying it is really a gift and not a loan that is expected to be repaid.

Also as @Wayne Brooks said, you're going to be hard pressed to find any hard money lender who will make a loan on an owner-occupied property since all the consumer-protection laws went into effect after the last bust. I don't know any that will, but if you can find any, good for you.

In general, and I can't emphasize this enough, do not lie to anyone involved in a mortgage transaction. Don't tell the bank you intend to live somewhere as your primary residence if you don't intend to do exactly that (and a few months for appearances doesn't count). Don't tell the bank something is a gift when it's really a loan. Don't tell private/hard money lenders that you won't occupy a building if you're going to.

I can't tell you how many people I talk to, and see here on BP, who are so eager to start building their real estate empire that they want to do anything to Grow As Fast As Possible, including "fibbing" about their intentions to occupy a property and/or their source of funds.

There are strict laws against fraud involved in mortgages. People can and do go to jail, actual prison, for this stuff. People tend to forget this in a rising market because mortgage brokers are trying to "make hay while the sun shines", but when the market falls (as it inevitably will), and banks start losing money, a lot of loans get looked at very closely and people get charged and convicted. If you find yourself lying or "fibbing" in the process of getting a mortgage, STOP.

In case a BP post isn't enough to convince, it's not hard to find examples in the news as they usually make the local paper, e.g., Providence lawyer among 6 indicted in mortgage scheme (Dec 2015)

@Tarcizio Goncalves Yes, this is something that happens in RI on a regular basis. However seller financing deals are often off-market deals and as private sales, they aren't often talked about.

I wouldn't say seller financing is something you can or should seek out specifically, but if you have something that is a deal anyway, and the seller has equity, then it's certainly something you can ask for.

It all depends on how you present it to the seller, and the sellers needs - which you can only find out through talking to them and listening. You can spin it as a way to save taxes, or a better investment than they could get in the stock market (or whatever else they were going to do with the money), or a way to keep getting income from the property without any management hassles.

Seller financing is a great example of the principle that you won't get something if you don't ask, but as with most things a soft sell is usually a better approach. I think if you start out asking for seller financing from the start it screams "I have no money and can't do this deal without your seller financing" so I'd recommend establishing an agreement/deal first, and then seeing if seller financing is a possiblity.

We had a panel of people who had successfully used seller financing, a few months back at RIREIG, so if you want to talk to people who have successfully found/done/created seller financing deals, that's one place you could go to make some contacts and ask about it some more.

John, since you don't know any of the people on your mailing list, I would definitely not put the property address on the flyer. I would put the neighborhood or nearest major cross street if that's more precise/useful.

I would be careful sending out a flyer to buyers, that you don't advertise as if you own the property. My understanding is that in most states due to real estate licensing laws, you can't advertise something you don't own. Instead, you are advertising a contract to buy a property - that's what you're selling, the contract, not the property itself.

(I'm not an attorney so I'm just raising an issue you may want to discuss with an actual attorney, but you may find this series of videos on wholesaling which was made by an attorney in Ohio to possibly be applicable to your situation.)

In general I'm much more in favor of spending time to build relationships with a smaller number of buyers you've met with a few times and vetted a bit, instead of doing a mass mailing campaign - the "rifle" approach rather than the "shotgun".

If you decide that's something you want to investigate, you could contact active people here on BP and/or go to your local real estate investment group such as RIREIG in RI or Black Diamond REI in Mass to start building relationships.

Good luck and let us know how it turns out of course!

@Nancy DeSocio my recollection is that you paid a sizable amount for that property. My advice is not to do the parking right now, because I can pretty much guarantee that within the next year or two something will come up on the property that will make you wish you'd saved the $3500+ in reserve for higher priority items.

Keep it on the "nice to have" list and just deal with the current parking situation until you have so much money that you feel you have some left over for improvements after all the necessary reserves have been satisfied. (If you don't know what I'm talking about, Google replacement reserves rental property.)

Unless you have money to burn of course. Then do the driveway, do an interior redecoration of all the units/common areas, and invite me out for coffee (your treat ;)

@Sam Rogers people kill people, not companies. You either need to identify yourself as the "property manager" (NOT "owner"), or if it's too late (and you already identified yourself as the new owner) then you need to hire a property management company.

My first thought was, well if they pay on time maybe just let them stay until they move on naturally (encouraged by some rent increases perhaps). However now that you "know" they have a violent past, in my not-a-lawyer opinion, you have a problem in that if anything happens with the other tenants you could be held liable for knowingly allowing a danger to persist in your building.

So at this point unfortunately, you have to act. Best option is to de-personalize it, either be the "property manager" just acting on behalf of the owners, or hire a property management company (the bigger the better).

If you can afford it, I'd also consider ending the leases (and evicting if necessary) all the units, then it's obviously not personal - you just explain that the new owner wants to renovate the whole property. Obviously no one is happy to have to move, but it seems much less targeted/personal in that way.

(Though as @Eric G. pointed out, if Howard is gone for good at this point then you just have to evaluate how dangerous / much of a liability Tammy is to the property.)

Good luck and let us know what happens of course.

@Account Closed from Lyon Property Management.

He and his team manage two of my properties and I've been very pleased with the results so far. I know other good managers, but of the ones I know, he's currently the best mix of competence and hunger (i.e., he does a good job and he's currently expanding his business and taking on new clients).

I'm sure others here on BP will chime in with other recommendations, and you should interview several candidates before making your decision, but I do recommend you include Jim in the list of people to interview/consider.

@Adam R. since no one else answered you I'll at least give you a reply, though I was kind of hoping someone else would say something on the topic.

Your question is phrased in such a way that non-attorneys might be hesitant to answer it, since you're basically asking what's legal and what's not.

I have never heard of anything regarding sub-metering (if I remember the RUBS system correctly) for utilities being mentioned in the law. The laws relating to utilities, that I'm aware of (as a non-attorney), have to do with which utilities the landlord must make sure are available to the tenant as a matter of habitability, not specifying who pays for those utilities.

However what I was told at one point is that judges have determined (i.e., case law) that in practice the landlord must pay for water and sewer - s/he can try to pass the cost on to the tenant, but it is toothless because the landlord cannot allow the property to be without water and so must ensure it is never turned off (and if s/he allowed that to happen, then the tenant may not owe rent for that period and could even be entitled to damages if it was found to be part of a self-help eviction).

Some RI general laws you may want to review are listed below, but like I said, you're really asking a legal question so unless you find an attorney willing to weigh in here for free (which would be awesome), you'll either have to ask one directly yourself (on your own dime), research the laws yourself, or be content with non-attorney opinions like mine.

Anyway, here are some relevant laws and you'll also want to check out the RI Landlord Tenant Handbook which is basically a plain-language explanation of the most commonly encountered LL-tenant laws:

• RIGL § 34-18-22 Landlord to maintain premises
• RIGL § 34-18-22.2 Landlord's duty regarding compliance with zoning and minimum housing laws
• RIGL § 34-18-31 Wrongful failure to supply heat, water, hot water, or essential services
• RIGL § 45-24.3-7 Minimum standards for basic equipment and facilities

@Anthony Markey is there a reason you just don't try renting by the room instead of by the unit?

Seems like a way to make a little more money in a student scenario without having to do a lot of construction work or get the city involved.

Granted, there would be shared kitchen/bathroom, but on the effort/reward scale it would probably be where I'd settle.

@Lissette Deleon since you're an agent, I'd strongly recommend setting up some saved searches in the MLS. For example you could set up an alert for any 4+ units or mixed use properties in certain towns (e.g., Pawtucket and Providence).

You'll have to manually screen the results for cap rate, and you may as well give up on mortgages being assumable as that's very rare these days. However you might look for the possibility of seller financing, which is also rare but less so than assumable mortgages. There's a field for that in MLS but it may not be filled out reliably so I'd also recommend adding a keyword search in the notes/memo.

Anything that can be rehabbed is a big category, and there's lots of competition for those, but you can set up keyword searches for those also, e.g., "handyman" (special), "cash only", "fixer", "TLC", etc.

A lot of people recommend looking off market, but those are a grind to find, and usually not do-able for an agent looking for a client, under the client's desired timeline.

The MLS, conversely, is a giant database which you can set up saved searches in, kind of perfect for an agent trying to help a client make a purchase with specific criteria. If you don't know how to set up such saved searches, you'd want to ask your broker and s/he would probably be very happy to help.