All Forum Posts by: Anthony Thompson

Assessed value is only very loosely correlated with market value. Lately I have been finding it a little under market values, but in the past it's been higher. I only mention it in a negotiation if it helps me (i.e., if assessed value is below market value and I hope the seller puts more stock in assessed value as a measure of market value than I do).

The best way to determine market value is to look at similar properties ("comparable" properties aka "comps") that have sold recently in the same area, ideally within the last 3 months and ideally 3 comps. Be very cautious with only 2 comps, and never assume you can get an accurate value from only 1 comp.

You can try to get an approximation of market value by looking at sites like Trulia and Zillow but the problem is those sites often don't show truly comparable properties - they are often not too similar to the one you are trying to value, are very old, and/or aren't really in the same area (even though they might be within X miles, neighborhood boundaries really do matter - 1 mile in one direction doesn't necessarily equal 1 mile in the opposite direction!).

Similarly you can try to approximate market value by using riliving.com to look at "asking" prices for similar properties. The good thing with that is that you can do a better narrowing-down as far as similar property and similar area. But the big issue is that you'll only see asking prices, not sold prices.

Anyone can ask too much for a property, in fact it's quite common for people to "shoot for the moon" when they first list a property and hope some sucker "investor" will come along and over-pay for their property.

So asking prices aren't actually too helpful, other than if you're planning to rehab a property and put it back on the market and just get a sense of what the competition is like. 

But don't use asking prices for gauging market value. The only way to determine market value (and even that is a range - which is why appraisers call it an "opinion of [market] value") is to find similar properties in the same area that have sold recently, and where buyers and sellers were transacting freely (what they call an "arms length transaction"), and where the buyers was actually willing to plunk down their hard-earned cash to buy the properties at a certain price.

Abou, you can calculate the property taxes on a property in Rhode Island by looking up the assessed value (on the city/town assessor page) and then dividing by 1000 and multiplying by "rate" and "% of value" on this tax rates page.

For example, if a residential property is assessed at $250,000 in Cranston, then it's 250,000 * 22.84/1000 (tax rate) * 100% (% of assessed value that is taxed) = $5710/year or 475 that would need to be set aside each month.

Abou, I've worked with several real estate attorneys in RI who I can recommend. Contact me by private message and I'll be happy to give you their contact info.

Josh, welcome to Bigger Pockets! As you've probably seen, there's a wealth of free information here on BP in the forums and also the podcasts are great.

I also recommend getting out to a local real estate investor group/association, such as the RI Real Estate Investors Group (rireig.com) or Black Diamond Real Estate Investors (blackdiamondrealestateinvestors.com).

And of course if you have specific questions you're welcome to post them to the forums too :)

Frank, welcome to Bigger Pockets! As you have probably seen, there are a lot of resources here on BP for both wholesaling and landlording (buy and hold).

I would also recommend attending a local real estate investor group such as RIREIG in RI (monthly on 3rd Thursday; see http://www.rireig.com) or Black Diamond RE Investors in southern Mass (http://blackdiamondrei.com).

And of course if you have specific questions feel free to post them here on BP :)

It's not directly about any of the states listed.

If everyone listed every state that could possibly have someone interested in a post, Bigger Pockets would be a never ending stream of keyword alerts.

A lot of people on BP are associated with businesses that serve multiple states. Again, if everyone listed every state they serve for every promotional post, BP would be more email alerts than actual content.

If it's not specifically about that one state, please don't mention the state.

For my part, if I see a post I think is keyword spamming, I'm going to mark it as abuse.

Please refrain from keyword spamming.

I won't take a moral or legal position on it, but personally I am extremely uncomfortable if there is more than one wholesaler involved in a deal (double- or triple-wholesaling).

I feel that wholesaling is a delicate enough dance as it is, that having so many extra parties involved is just begging for one of them to screw it up.

It also has a feeling of "find the bigger fool", and as the end/real cash buyer I am not willing to be the biggest fool in a chain of fools.

And as you pointed out / implied, many of those "wholesalers" are very new, indeed. They are trying to make thousands of dollars without adding any value to the transaction (at least the initial wholesaler found the deal and got it under contract).

From a free market point of view, if the #s are good it shouldn't matter who the middle man/men/women are or how many, but as a practical matter "too many cooks spoil the broth" and I'll avoid those deals no matter how good they seem.

(And they are rarely very good at all as most/all of the wholesalers in the mix are greedy and slap a high premium on for themselves so there is little/nothing left in the deal.)

This is not just theoretical. I've had people attempt to wholesale my own deals back to me! (on more than one occasion, too) Pretty amazing when you get an email from some newbie wholesaler who has an email list, and you read through "their" properties and see one you currently have under contract... Guess that "cash buyer" was actually a wholesaler after all.

It is theoretically possible that if you had the right mix of experienced people, a deal with multiple wholesalers could work. But I've never seen it happen in practice.

My advice to newer investors is: If you get even a hint that there is more than one wholesaler involved in a deal that's presented to you, run away fast.

Finally, as @Robert Blake pointed out, there really was no need to list every state in the original post.

Pete, welcome to Bigger Pockets! Sounds like you're already off to a good start with the podcast and checking out your local REI group.

Renovating with intent to sell is a good thing (though you might want to avoid that particular phrase; see "dealer status" here on BP).

You may also want to consider, at some point, keeping some of your rehabs instead of selling. It will give you a better understanding of your target market (at least for people buying multi-families), and for tax reasons it can be much, much better than buy-fix-sell.

Up to you of course - go where your passions lie - but taxes are like very juicy carrots and very mean sticks, so it's IMO worthwhile considering them anyway.

Sackie, welcome to Bigger Pockets! As you've seen, there is a wealth of good, free information here. You didn't mention the Bigger Pockets Podcast so be sure to check it out - always entertaining and informative.

Someone else in Rhode Island recently (like, yesterday :) asked about mentoring in Rhode Island so I'll refer you to that post.

I'd say start slowly and go in the direction of where you are most comfortable and/or attracted to - there are a lot of different aspects to this business.

Many suggest that new people begin with wholesaling, and if that's what's most interesting to you then by all means do so (again, tons of good info here on BP). I'm a cash buyer in all of RI, by the way :)

I would say that if you don't know where to start though (i.e., all other things being equal), you consider starting with a small rental house (single family you don't live in, or 2 or 3 family you may or may not live in).

Pick something close/convenient to where you live, because you'll be over there more than you expect, and make sure to read everything you can here on BP about analyzing buy-and-hold rental properties before buying. In a nutshell, the numbers have to work.

Also don't start with something needing anything other than a light rehab; paint and flooring are good candidates, maybe a new boiler or hot water tanks - think "under $30,000 total".

If the #s work you could also start with something needing little/no rehab. Heresy around here, I know, but if the #s work that would free you to start learning how to be a landlord right away instead of having a project on your hands.

The reason I recommend a small buy-and-hold rental is that no matter what else you end up doing with real estate, it's such a significant part of the RE pie that in my opinion you really do need to understand it. For example, many times when you wholesale you might be wholesaling to buy-and-hold investors - it will help you identify good properties for them, and talk to them, if you have a little landlording under your belt too.

And I mentioned it in the other post but can't help repeating myself, consider going to a local real estate group such as RIREIG in RI or Black Diamond REI in southern MA. For free or very little money you can stay current with laws affecting our industry, make great local contacts with fellow investors, real-estate savvy vendors, private lenders, etc. - very worthwhile.

Again, good luck and welcome to BP!