All Forum Posts by: Anthony Thompson

Austin, you may want to be a little more specific about why you're looking for a real estate investor in Providence.

Are you a new investor (or new to Rhode Island) and looking for a mentor?

Do you have a potential deal in Providence and you want a local investor to review and/or buy the deal?

Did someone give you a bucket of cash with the admonition, "you must give this bucket of cash to an investor in Providence Rhode Island"?

You may have already gotten responses to your post, but in case you didn't, I thought I'd recommend being more specific as a way to increase the chances of getting replies.

Lissette if you're acting as an agent and not a buyer, you'll probably just want look on the MLS.

If your buyer is insisting on an off-market deal, then your best bet is to look at FSBOs, where the owner is often willing to pay 2.5-3% for your bringing the buyer.

However if you go that route you should definitely work with your broker as FSBOs are a bit of a niche. The more normal scenario is for agents to try to convert them to regular listings.

Also I've heard some agents say that working with FSBO owners is very frustrating, one who's a good friend told me "it's twice the work for half the money", because you have to do everything the buyer's and seller's agent would do, but you're not getting paid for all of that.

Off market deals are good if you can get them, but they take time and persistence to find and negotiate. The chances of your being able to do so in your investor client's timeline are very small, never mind also finding a property that meets their needs.

Others may feel differently, but in this case I think you should use the MLS to its fullest capabilities, set up precise searches for your client to find exactly what they need.

As far as liens on the property, that comes up in the title search but it's never a bad idea to check ahead of time (i.e., as early as possible). I use ripropinfo.com for that, starting at the assessor link for the town to get the owner name(s) and then the land evidence link to look up any liens.

No problem @Tarcizio Goncalves glad to help and I hope it works out for you!

@Tarcizio Goncalves If no one else gets back to you on this I can PM you a couple of names who might be able to assist.

Thanks @Nancy DeSocio, yes I'm looking forward to it as well :)

Please note though that it starts at 9AM - I thought I selected that but it looks like I made a mistake, and I can't figure out how to edit or delete the event so that's why I'm posting this update

The Rhode Island Real Estate Investors Group will be hosting a 3-hour seminar at the Crown Plaza in Warwick for beginning real estate investors which will cover:

• Common misconceptions that lead you down the wrong road
• Wholesaling - It's not as easy as they say
• Using Niche investment strategies to build confidence
• Approaches to beginning investing that are different from what everyone else is doing
• What investors miss when calculating cash flow
• Practical exercises to assess current market deals

For a detailed flier go to: https://rireig.com/wp-content/uploads/2018/02/flyer-2.pdf

The seminar will be held on Saturday, March 24th from 9AM-12PM at the Crown Plaza in Warwick and there will be a $10 discount for registrations before 2/28/18.

To register for the class go to: https://www.eventbrite.com/e/beginners-guide-to-real-estate-investing-tickets-43039094089

This is a purely educational event; no products or services will be sold and it is not a marketing seminar to encourage attendance of future classes.

@David Sisson Have you talked to the city building/planning department to figure out if they will be in favor or against your proposed use change? I'd also recommend talking to owners of neighboring properties if the opportunity arises, since I believe their input will be solicited for any potential zoning changes.

Aesthetically, I like your exterior painting (and nice budget move only doing the 2 visible sides!), and I can see that changing the windows will do amazing things inside the space (almost literally "night and day").

Taking a step back, my general idea is "do one thing and do it well" - so if it were me with that building I'd probably pick a course as far as office/commercial or residential and stick with it. But if the town is in favor of (or not opposed to) a more creative use then maybe there's an opportunity there.

I'd also say, think about if you ever decided to sell the building and who your potential buyers would be. How many people are going to want to buy a mixed office/residential building, versus one that's simply offices/commercial, or simply residential. Not to say that mixed is the wrong move, but I do think it's a more limited resell market so something to consider.

Lastly, I have not done this, but in the recesses of my brain there's a concept of a "highest and best use study". I have no idea if this project is a good case for such a study, or how much it would cost, but as long as you're opening up the can of worms of changing the present use, it might be something worth looking into (even if you ultimately say, that would cost too much for this building/project to make it worth commissioning such a study).

@John Gentile This deal only makes sense if you can really, truly increase the rents to 1200, 1200 and 1000 like you said. It does not make sense with the current rents. It is an "OK" deal if those are the new rents and you only have to spend ~$15,000 in repairs/improvements to the property to get the rents to those levels. Obviously, the more you spend, the lower your return will be.

I had to make a lot of assumptions in taking a quick look at this, for example I'm assuming all tenants pay their own utilities. If the owner is paying the utilities, it doesn't even make sense in the repair/raise-rent scenario and loses money in the current (as-is) scenario

I also assumed it would be a conventional loan with your putting 25% down.

I did not account for the fact that you'd be paying interest on your down payment since it's coming from a HELOC - I don't know your interest rate, but the numbers almost certainly don't make sense to do the deal if you have to borrow for the down payment, even in the raised-rents scenario.

And I'm always extremely hesitant to encourage any newer investor to buy a property where the current rents make it a thin or bad deal and it only makes sense with some proposed/assumed/pro-forma rent.

The phrase you'll see in MLS listings is "rents could be higher". My response is, "then why aren't they?" (already higher).

Maybe it's because the tenants were there for a while, the owners were bad at raising rents etc. But maybe there's some other reason you're not seeing. I would caution anyone against buying when a deal only makes sense on the assumption of being able to raise rents.

If owner pays utilities on this deal, I would say walk away. If tenants pay their own utilities and you're very certain about being able to get those 1200/1200/1000 rents, along with rehab #s no higher than 20K max to get them there, then after doing the work to the property you will have an "OK" deal (about a 5% cash on cash return). It's nothing to get excited about, but if you really like the area and there are other factors at play (e.g., you have to invest the money before your kids or spouse spend it ;) then you could do OK with it.

But it still seems a little thin to me and you'd be taking on some (admittedly small ish) risk to get a meh return. I guess I'd say, if you're going to hire a property manager (recommended, if you're in Boston), then run this deal by them to see their thoughts about the property and especially the expected/hoped-for new rents, since they'll be your "boots on the ground".

You absolutely need to take your HELOC interest into account though since that cost could tank even the rosiest scenario (that's still in the realm of the realistic).

@George Kahari There are quite a few resources for wholesaling here on Bigger Pockets, I'm sure. For example I think there must have been at least a few episodes of the podcast which have probably covered the topic, and @Brandon Turner wrote a pretty good post on The Ultimate Beginner's Guide to Wholesaling a few years back.

It's worth checking out the BP resources because there's very little that's Rhode Island specific about wholesaling. Essentially you're just getting something under contract for a below market value, marking it up a little, and assigning the contract for a finder's fee.

Though I also think it's important that you at least have the ability to close if you can't find someone to assign the contract to (and if the deal isn't good enough that you would want to close yourself, you may want to double check how good of a deal it is in general).

If your goal is to wholesale 5 properties a month, you're going to have to ramp up your spending and effort on a variety of marketing methods, as well as develop systems to handle/filter/process the leads that will come in, since most of them won't be deals but you have to be ready to jump on the few that are. Again, there are many resources here on BP you should check out.

You might also consider attending a local real estate investor group such as Black Diamond REI in southern MA or RIREIG in Rhode Island, and talking to other wholesalers in your area, maybe meeting up with some for coffee, etc.

Good luck and keep us posted on your progress of course!

@Matt Romano I agree with @Mike McCarthy - tell her it's fine but it needs to be run by you first in the future. But generally, if this is your biggest tenant problem at the moment, you've got it easy. It's actually kind of amazing she included the receipt.