How are markets in your area

[Fernando Vitorino]

Hi all, hope all is well. I’m from Providence RI where I currently own a 5 unit commercial residential building in which I reside. I’ve been seeking new buys in providence for over a year now but the market, as your most likely aware, has been very daunting. Most recently, my fiancé and I have been actively searching for a multi in Newport RI. This is a very busy touristy area in our state. I would compare it to a smaller version of Charleston SC. 1800’s architecture, main strip with shopping right on the water, best beaches in our state all within a 1 mile radius, museums, etc. The rich and famous dock their yachts in Newport. My fiancé works in Newport (restaurant industry) therefor we wanted to buy something where she could be closer to work, enjoy the summer, and make some passive income.

The average 4 unit is selling for roughly 810k, 3 units are going for roughly 600k. If these properties are right next to THAMES ST (main strip), your looking at 1million easily. With some of these properties, the rents do justify purchase price. I’ve actually put in offers on 2 properties over the last month in which monthly cash was roughly 700-800 fully rented with all rental analysis projections accounted for. In cases where properties are in weekly rental zones, there is potential for very impressive returns.

Even though I’ve made a few offers recently and even though rents/weekly rental rates justify purchase price, I can not seem to get over how much money these properties are going for. If you look at public records on some of these properties, owners are making up to four times their initial investment in the matter of three years of ownership without having done a single thing to the property. This to me is baffling. At the moment, I can’t seem to figure out whether I should just wait out the storm or bank on the fact that home prices will flatten out rather than dip.

The reason for my message is as follows. What are you seeing in the areas that you invest in? Are you seeing any inclination that a market dip is approaching. Are you starting to see a higher number of foreclosures? Are you witnessing the same thing where properties are selling for unjustifiable purchase prices? What areas in the U.S. make most sense to buy in right now any why?

Lastly, I love old historic vibrant city’s. Charleston SC, Newport RI, Portland ME, Leadville CO, savanna GA, etc. If you have any leads on good real estate investments, would like to partner up, or would simply like to share information please reach out.