All Forum Posts by: Anthony Thompson

@Stephen Douglas Welcome to Bigger Pockets! There are a lot of great resources here including the podcasts which you've already discovered :)

There was another thread recently where a few of us were discussing buying in Woonsocket, thought I'd point you in that direction since you did mention maybe buying units over in that area.

@Amy DeCesare While the areas you mention could certainly benefit from more multi-family units, generally people in the more affluent parts of the state like Washington county oppose such new development, either indirectly through zoning ordinances like minimum lot size and parking requirements that make it almost impossible to build (as @Brandon Ingegneri mentioned), or directly at zoning hearings where neighbors show up and oppose it because that they don't want to change the "character" of their neighborhood.

It can be done, but it's far more the exception than the rule and requires big bucks, political savviness, and the ability to make a big bet and absorb the loss if you lose.

@Raymond Hill my sense is that due to the various costs and regulations involved, as @Brandon Ingegneri mentioned in his examples, it just makes more economic sense for builders to focus on single families than multis.

I think it's related to the fact that most single family purchases don't make sense from an investment point of view because as an investor who's looking at income and expense #s to determine what you can offer, you're competing with owner-occupants who have very favorable financing and are buying because of the school district and because they like the kitchen and bathroom, not whether the rents vs. expenses & mortgage is profitable.

In other words, because of the favorable financing and "use benefit", the buyers of single families almost always pay more per unit than the buyers of multi families. So from a builder's point of view I think it's just more profit for less work.

The only time I've heard of new multis being built in the last 10 years were when someone either bought, inherited, or carved off a piece of land and wanted to build a new multi to hold onto themselves, rather than to put it on the market. I don't think the market compensates you enough for "newness" vs. the extra cost and complexity of building.

There was a good article on Bloomberg about this last year that's worth reading to get a sense of the bigger economic forces/trends involved in this, America Needs Small Apartment Buildings. Nobody Builds Them (Single-family homes and high-rises are all the rage. Meanwhile, the vanishing middle bodes ill for the future.)

@Jacob Gelinas I think one of my signs of the real estate apocalypse (i.e., market top) is going to be when people start getting excited about properties in Woonsocket again.

What @Brandon Ingegneri was being polite about saying, is that most of Woonsocket is a tough area.

I would strongly recommend visiting the property in the daytime, evening, and weekends, and talk to neighbors and people in the area to get a sense of who you'll be dealing with.

Woonsocket has a lot of tenants who get rental assistance (section 8 or RI housing vouchers), which is not necessarily a bad thing but you must screen them as well as you would any other tenant - and in Woonsocket you must screen thoroughly.

I would venture to say that a not insignificant portion of the the state's "professional tenants" (who move in to one property, pay no or partial rent to string the free ride along as much as possible - they love new landlords - then get evicted and repeat the process) reside in Woonsocket.

Others have spoken to the peculiarities of the building well so I won't repeat that, but as a general rule if the property deviates from the "usual" in some way, like a slate roof or geothermal heating, you want to be extra careful that you understand what you're getting into, even if it means paying a professional for a real inspection/evaluation. Asking on BP is nice, but to be honest I wouldn't say it's enough due diligence for big ticket items.

Historic properties are another good example where getting into specialized skills and materials, and deviating from the "standard" way of doing things, might look aesthetically pleasing but can cost a whole lot more when repairing or replacing.

Based on what you've said, and without seeing specific numbers, the property sounds overpriced and I would be cautious about buying it. I don't think the items you mentioned make up for the price being "quite high" and @Jim K. explained that those items could actually end up costing a lot.

And I agree with @Colleen F. that you should not assume you can increase rents. Always buy on current rents, never "potential" or "pro forma" rents. If you can increase the rents, great, but if the assumption that you can do so is the only thing that makes the deal work, walk away.

And if that means you walk away from every property, then either start doing the grind work to find and make offers directly to owners (without an agent), or just acknowledge that of the deals you can find, they are overpriced, and sit on the sidelines until numbers become rational again.

When a listing says "rents could be higher" I say, "why aren't they?" That's like the current owner asking you to pay her/him now, for work you're going to have to do in the future (improving the property and raising the rents). No way. If they want the higher price that comes from higher rents, they can do the work and raise the rents. But if I'm going to do the work, I get to keep the increased value, not pay them for it up front and then have to work to get my money back.

Anyway, if you check out the property, the area, the rental market, and the potential tenants thoroughly, and you're still happy with everything you see, then go for it, and let us know what happens of course!

@Kyle Brodwater I also missed you at the RIREIG meeting, but please be sure to say hi if you come to a future meeting.

Also if you've joined I believe there's a section where members can stand up and give a (short) little schpiel about themselves and their business.

Since I don't think there are a lot of folks who come up from Westerly, I'd recommend you consider introducing yourself and offering to meet folks from Westerly / south county for coffee just to network, talk about real estate, etc.

From everything you say, if you did enjoy accounting then it does sound like it makes sense to get your masters and try again.

But of course you have to pay the bills today, too.

Is there any way you could work as a junior accountant in a firm, while you also pursue your MST or other advanced degree on nights & weekends?

I would also imagine you could apply to jobs in corporate finance, with your accounting background and work experience there's a lot to talk up there.

I'm going to be closing on a vacant property in a tougher area soon and besides putting an alarm system in, we're also looking into options for boarding it up.

There's the classic plywood option of course, which is almost certainly the cheapest but also looks awful and advertises "vacant/abandoned property".

In the last few years it seems like a few other options have come up:

• VPS (vps360.com) steel door & window coverings
• SecureView (secureviewusa.com) clear boarding, used by FNMA
• InvisiBoard (products.cyprexx.com/InvisiBoard)
• Dawgs (dawgsinc.com) steel and clear boarding

I know I've seen a few VPS protected properties around in my area. I haven't seen any clear boarding that I can recall, but then again it seems like it's designed to be less visible/obvious.

Just wondering if anyone has any experiences with any of these non-plywood boarding up methods and would be willing to share their thoughts about ease of installation/removal, cost, etc.

(I searched the forums for existing posts and didn't find too much, other than a few posts saying DAWGS might be more expensive compared to other options like VPS.)

Also see the "Home Buying Process By State" section on this page, which has an entry for each state and discusses related issues that aren't about the closing per-se (such as customs around wells, heating fuel, environmental, pests, etc.)

@Raymond Hill CATIC (Connecticut Attorneys Title Insurance Company) is big in New England / the Northeast. So if you're at least looking to stay in this part of the country they're good since they also have a good RI presence.

First American is nationwide and definitely one of the big (if not the biggest) players in the title insurance area.

My understanding is that there are parts of the country (like the East coast) where attorneys are the ones to regularly do closings, and there are parts of the country (like the West coast) where title/escrow companies are more normally the ones to handle closings. This topic has come up on BP before if you want to research it more (also see state by state closing guide).

I would recommend, if you are targeting a remote market, that you try to determine what are the normal customs for that area, including customs around closing, so you don't expose yourself as an out of state newbie early in the process.

@Alyssa Merkle overall I like it fine, especially since I'm already here :)

If I were starting over and could choose my area in the U.S., I don't know that I would choose RI or even the Northeast because I don't think the demographic and employment trends are super favorable for this part of the country, compared to others.

However I think if someone is already in RI or this part of the country for other reasons (e.g., family or job), it's a perfectly fine market and you can still make money.

I also think that if one is savvy and pursues a niche or two, that you can make money pretty much anywhere. The frustrating part about real estate is that you have to deal with people. But the amazing opportunity in real estate is that you get to deal with people. And people don't always make rational decisions, so that's where there's opportunity.