Looking to Build a Portfolio in Providence, RI

[Tom Barrick]

Hello everyone - new to BP and first time posting.  I am a CPA located in the Greater Boston area who specializes in working with real estate investors and developers.  After working with them for a number of years, I'm quite familiar with the calclations necessary to make a deal work as well as realistic expense ratios, etc.  Living in Southern MA, I'm interested in the Providence, RI area because I would like to start a hub in a reasonably priced location not too far from home.  I intend to make this a passive venture via the use of a local property manager, and have built out most of my "team" (finance and attorney are good and working on broker and property manager with a few irons in the fire).  

At the end of 2020, I think I'll have the finances ready to make my first purchase and am interested in the following areas: Elmhurst, Smith Hill, North Providence, Federal Hill and Pawtucket (also really love the East Side, but seems to be too expensive and more geared to an owner operator who is trying to have someone pay half their mortgage versus someone looking to cash flow).  I'm willing to stick to these areas as quality of tenant seem to be better than the headaches in places like Silver Lake, Olneyville, etc. (especially for a first-time investor).  

Ideally, I would like something with 3 to 6 units (duplexes don't seem to cash flow in PVD and there's too much competition from owner operators who only need to put down 3% to qualify) that needs minimal to no work as I'm not looking to bite off more than I can chew with my first purchase.  Additionally, it seems that three bedroom units would be ideal as they create less turnover (more families, less transient folks).  That being said, I understand it's easier to find three bedroom units in 3-family versus something 4+, so I'm open to many ideas.

If anyone has any advice or would like to connect, I'd be happy to discuss.  Also, if you think anything I've said above is way off base, please feel free to tell me that too!  These are just my observations at this point in time, and I'm trying to "stress test" my idea(s).

Thanks in advance!

[Spencer Grassie]

Tom, welcome to the BiggerPockets forums. Your research to date is spot-on. I too would be reluctant to invest in Silver Lake.

As Anthony mentioned, I would target three- to four-unit properties because: a) 5 units and up is considered multifamily housing and therefore requires commercial financing (less likely to be an issue for you given your financial position); b) usually have less competition from real estate investors; c) tend to cash flow more than duplexes; and d) allow you to get your feet wet, especially as an out of state investor. Now if you come across a killer deal on a small multifamily property, by all means, pursue it!

I’m in both Boston and Providence and am more than happy to connect.