Checkmate? No parking on 3 unit property.

[Brian Watkins]

Am I in checkmate?

I found a property in Providence, RI I want for myself as a cash flowing property. It's a 3 unit property. Perfect for college student rentals. Easily $600 per room. 8 rooms total. Good math. I'm in position to short sale the property and scoop it up for $90,000. Needs about $70K to rehab. ARV $255K. Nah this is not a sales pitch. I need a strategy from someone with experience please. No shade.

There is NO parking. Street permits aren’t available in the area and even if they were parking bans throughout the winter for plows would hinder anyone parking on the street.

There is a 3400 sq.ft lot behind the property. The owner of the subject property use to own the lot but lost it about 2 years ago to tax foreclosure without her knowledge. A politician purchased the lot and hung up on my Realtor when he called about purchasing the lot. The house will be going to foreclosure soon hence my dilemma.

Anyone have a strategy to make this work? Or is this a checkmate by the politician who won’t take any calls? Seems like he is waiting for the property to go into foreclosure and scoop it up for cheap. Any suggestions?

[Anthony Thompson]

@Brian Watkins why do you say street permits aren't available for the property?

It looks like, from the Providence web page about street parking permits, that there are some restrictions but it's not clear any of them would apply to your situation.

I know that doesn't help for snow / parking bans of course but still, better some parking than no parking.

If it truly is good student housing that implies it's close to one of the schools in the area (RIC or PC, I'm guessing). If that's true, would your tenants really need cars anyway? A lot of younger folks are foregoing cars anyway, and I've read that the auto industry is getting nervous that car purchases are on a steadily declining trend.

I wouldn't assume that this politician was necessarily planning to scoop the property up for cheap, chances are he'd end up in a highest and best offer situation bidding against other people, which is true for most rehab properties these days.

Granted, he has the solution to the parking, but I still think he'd end up paying a good amount for the house if he had to compete against other people like you.

It's also worth wondering, how useful is the lot to him, apart from the house? It's quite possible if you buy the house, and he can't do anything else with the lot, he could contact you down the road to ask if you still want to buy it, hoping you'd pay more than someone else would for the lot since it's most directly beneficial to you. This would be especially true if it's an otherwise undersized or likely-unbuildable lot.

(I don't know the address or zoning, but 3400 probably is buildable for at least a SF, but you'd want to look into it if you plan or expect to negotiate with the land owner in the future.)

Personally, I think you're focusing too much on the back lot. I would bid / buy the 3 family without parking, for a price which makes sense without parking, and do not plan to be able to get the parking. So make sure you buy it right for no parking.

If, somewhere down the line, you can actually work something out with this politician, then that's just gravy. But it sounds unlikely at this point, so I'd recommend basing your purchase on a no-parking scenario.