All Forum Posts by: Anthony Thompson

@Jennifer S. I think I saw you in the crowd but did not get a chance to say hello; glad to hear you found the meeting useful though, and happy holidays!

@Jerry Batista, I've looked at a few things in that area but most of what I looked at was overpriced (for me anyway).

It was a shame because I like the area and I think it has good potential. If I owned there now I'd definitely hold onto it, and I'm still hopeful that something will come across my plate in that area where the #s work.

And keep us updated on your redevelopment project of course!

Ha ha, thanks @Jimmy Murray - I saw the post but it didn't seem like @Jennifer S. was actually asking a question, and I figured I might see her at the RIREIG meeting anyway, but thanks for picking up the slack :D

@Jennifer S. Two of the major issues you'll deal with will be, is your lot big enough for the new parking requirements (with the 3rd unit), and that you'll need to confirm to 3-family fire coding rules which will mean hard-wiring the detectors so they become interconnected, which can be some expensive electrical work.

You can view the zoning ordinances for Providence online but like most zoning rules, they're a little terse and hard to navigate, at least until you get used to them.

I would not plan to try to find a 2-family you can convert to a 3-family because it's an uphill battle. What you could do is look for 2 families you think might have that potential (bigger lots are a definite help!) and then buy it as a 2-family you're happy with as-is (i.e., a good 2-family), and then try to convert to a 3F as "gravy" (something extra you don't expect, but cool if you're able to get it).

Figuring this stuff out online is difficult, same thing over the phone. However, every time I've gone down to the Providence building department in person (444 Westminster St) and asked about a specific property, they've been extremely helpful, in several cases giving me copies of the requirements for what I'm asking about on the spot.

If you are serious about this angle (turning a 2F into a 3F) then I'd recommend that the next time you're in Providence you go there and ask, and I think they'll give you a copy of the requirements right then. But it definitely also helps if you're asking about a specific property.

(I feel like I've gotten a copy of something addressing that exact question, turning a 2F into a 3F, sometime in the past, but God help me if I needed to find it right now :)

@Nancy DeSocio as @KEVIN FLYNN said, you should definitely meet with an attorney.

A big reason for that is that a big part of the "right" answer for you depends on your personal situation (income, expenses, assets & liabilities).

I would also say, be sure to keep the "complexity" factor in mind, and ask the attorney (if s/he recommends an LLC now), what will you need to do as far as present (now) and ongoing state AND tax requirements to form the entity properly and maintain it going forward.

A good attorney will describe those items and also gauge your ability to handle such complexity, when recommending a course of action for you.

For example, if you don't have any assets presently besides maybe your car, it "may" be that for your first property, an LLC could be considered optional because it's your only asset anyway. But definitely consult an attorney for your particular situation!

(I only mention this because I sometimes see newer investors focus on more on asset protection than acquiring assets, when I think the focus should often be on acquiring the first asset and then worrying about protecting it.)

@Luqman Shah welcome to Bigger Pockets! I know @Jimmy Murray has helped buyers from California buy multis in RI before - I'd suggest sending him a PM.

@Robert Chen I'd ignore what the tax record (tax assessor) has, you want to find out what the building department has on file as the legal use. You can get the phone # here (use the Contact Us link on the page; BP won't let me post the phone) but you may have to go in person to have them pull the card; they're at 444 Westminster St (somewhat across from AS/220).

I suspect the building department will have 4 units, and then down the line you can try to get the tax assessor to update their records to reflect the 4 legal units - which you should do as soon as you can, because you're probably being taxed a lot more at 5 units than 4.

Either way, the deal has already closed, you're not going to get any help from the closing attorney or Realtors. I wouldn't worry about the bank, they chose to make the loan and they have their own records & due diligence. Keep paying the mortgage, obviously :)

Converting from a 5 to a 4 is common due to fire coding and sell-ability. Hard to believe, but because it's a residential vs. commercial loan (4 vs. 5), a 4 unit can in many cases sell for more than a 5 unit, just because the pool of buyers is so much more.

And you will want to add "confirm legal use with building department" to your due diligence check list for future deals. :)

I've used Jason Smith in Cranston (jasonesmithcpa.com) and have been happy. He was recommended by a couple of other real estate investors who had used him and were also happy.

@Brian Flood Welcome to Bigger Pockets! It's wonderful that you're getting started at such a (relatively) early age - the lessons you learn about real estate now will serve you well for the rest of your life.

If you're open to house hacking, living in one unit of a multi-family property and renting out the other unit(s), then I think you can learn a lot, especially if you combine it with some of the resources you can find here on BP and in real estate groups near you such as RIREIG and Black Diamond REI.

I usually recommend that path (house hacking) to people who don't strongly lean toward something else like rehabbing, just because chances are good you have some experience already as a renter/tenant, so it's a good and natural transition to then provide services to others in the same way.

Even if you ultimately, down the road, end up using property managers, you'll still be able to manage those managers a lot better if you have personal experience managing a property or two of your own (and managing those tenants).

I hope this helps and again, welcome to Bigger Pockets!

I also think that @Steve Kontos's suggestion about upgrading one unit at a time is a good one, and is a strategy I've used myself, mainly when there's a vacancy and my contractors are able to fit the project in.