All Forum Posts by: Anthony Thompson

@Account Closed

@Andrew R. the NRW 91-01: Withholding on Sale of Real Property by Nonresidents is a good link - I went to bookmark it and found I had already done so in 2012 :)

My understanding is that it's "withholding" meaning the seller may get some or all of it back once s/he/they file a tax return in Rhode Island for that year.

Also a close reading mentions a possible exemption for sellers 55+

So I'd say the seller(s) should consult with an attorney or accountant, but it's possible they may owe much less than 15% or nothing.

Also as @Account Closed said, seller financing is also often attractive to people who are concerned about taking a big tax hit in one year - instead it's "pay small amounts as you go, over time as you receive the money" and is great for a number of reasons (no or a favorable interest rate for you, no bank BS, build long-term relationships and credibility with future sellers, possibility to discount in future with a payoff offer, etc.).

It's worth having in your mental toolbox even if you don't use it on this deal.

Alex, I completely understand the dilemma you're talking about. I can offer a couple of thoughts.

First is that private/hard money lending is often relationship based. The more of an established relationship you have with someone, the better terms you are likely to get, and the more likely you are to be able to get a proof of funds letter.

Conversely, contacting someone "cold" is what often leads to the lender "clamming up" and not wanting to talk about specific terms and not wanting to spend a lot of time with you because they are afraid it will be wasted time, that you just got out of a seminar and will never find a (real) deal, etc.

So it's unfortunately the case that, just like with regular banks, the best time to approach them is when you don't really "need" the money, but earlier as you try to establish a relationship, build some credibility with them, etc.

Another thought is that while the lender won't give you specific terms, you could try asking for generalities. For example, "We are new at this and understand your rate would probably be higher to compensate for the additional risk. Can you give us an idea of what ballpark you might charge? Are you talking 13% and 3 points, or 16% and 6? Or something else?"

Generally a proof of funds letter doesn't state the terms of the loan, it just says that such-and-such lender has pre-qualified you for a loan of $X for such-and-such property. (Actually there's a subtle difference here I'm glossing over between a pre-approval letter and "proof of funds" which is often a bank statement kind of thing.)

Again it comes down to relationships and building up rapport/credibility. A lender who's reasonably confident you might find a deal probably would give you a pre-approval letter and let you fill in the blanks as far as property address and loan amount (up to a limit). But a lender who's not confident in your abilities wouldn't want their name associated with you in case you make a ridiculous offer and then realize it later and back out of the deal.

This is why people often turn to family and friends for funding on their first few deals. Then when they branch out to other lenders, they can mention the previous loans & deals as a way of establishing credibility and a history of repayment, etc.

I know it probably wasn't the answer you were looking for, but I hope it helps some anyway. 

Lisa, what an inspiring story - please keep sharing!

There are a lot of great resources here on BP including the podcasts and I believe there are a few free books as well (including the Bigger Pockets Ultimate Beginner's Guide).

You should also check out some local real estate investor groups such as Black Diamond REI in MA and the RI Real Estate Investor Group in RI.

And of course if you have any specific questions post them to BP and I'm sure someone will be willing to help you

Chris, welcome to Bigger Pockets!

There are a lot of great resources here including the podcasts and I believe there are a few free books as well (including the Bigger Pockets Ultimate Beginner's Guide). You should also check out some local real estate investor groups such as Black Diamond REI in MA and the RI Real Estate Investor Group in RI.

If you have some specific questions feel free to post them, you'll probably get several answers in short order :)

@Charles Peralta I am actively buying multis in RI right now. Please message me with whatever info you're comfortable sending. I'd be happy to meet with you for coffee or at the property when you're in town.

Igor, welcome to Bigger Pockets! There is a monthly real estate investor group in RI, which usually meets the 3rd Thursday of the month; more info at rireig.com

I usually find that the more specific your questions, the more likely they are to get answered (unless answering your question could open the responder to liability such as asking which contractors to avoid :)

So, for example, asking specifically, "How do people feel about Fox Point? What direction is the neighborhood trending?" is better than "I'm interested in the East Side and hoping people will share their opinions".

Elizabeth, generally I've learned to be very hesitant to get involved in deals where everything must go perfectly for it to work out. From what you've described I'd be very careful and possibly not do it at all.

I think you should research or talk to some people who had done condo conversions in the last cycle.

I didn't do any, but my impression was that they really took off when singles and small multis became prohibitively expensive, but the demand was still there.

While our market has certainly come back compared to, say, 5 years ago, I don't exactly get the sense that we're at that level of demand, the "condo conversion sweet spot" (when singles/multis get too expensive, but before the whole market falls).

Besides researching the condo market in general over the past couple of years, another thing you'll want to pay attention to is the "affordability index" for SFs as I believe that is related to condo demand.

Maxwell, it sounds like you've come to the right place. You'll find a lot of great resources here, and I think your plan of buying a multi-family and living in one of the units is perfect. Welcome to Bigger Pockets!

Stephen, while it does sound like a sad situation, it's pretty impossible to comment or help without any of the #s. Does she have a mortgage(s), from what year and how much (balance/s)? Current value, ARV, repair estimate, etc.? What makes you think it's a good deal?