All Forum Posts by: Alexander Zurn

@Darren Budahn they are currently month to month which bodes well for a situation like this. Perhaps "the stress of moving" could lead to more illness, at least maybe that would work in a courtroom? Trying to consider all angles.

@Clayton Plank Yeah, it's interesting because I can hear my gut tell me it's an investment but the back of my mind wants to make sure all legal issues are in order. The last experience I want is a legal suit on my first go round. Thanks for the input

I am a few weeks away from becoming a first time home owner. 3 Unit in Rhode Island. The property contains a 2 unit building and a 1 unit standalone cottage. This will offer a unique opportunity to be a landlord/property manager in a separate building then my tenants. I am certain of the numbers, the zoning, the structure, etc. and have really done my homework (thanks to all of BP!). My question now concerns future tenants.

I was recently at the appraisal and I (unfortunately) was asked to stay on the street while the appraiser did his inspection. During this time one of the tenants in the unit with the highest rent (still below market) really tried scaring me out of buying by bringing up points that I have already factored in and thoughtfully considered. Needless to say, I played it off but still took note of everything he said and triple checked it. All is well! However, during this conversation I was lead to think that it may be wise to raise the rents on this unit first because in reality they may try to do this with future tenants I try to acquire (i.e. speak out against the property, etc.). The only and exact point of raising rent will be to get it up to market value so if the tenants I am speaking of can pay, great! But I have a feeling they cannot. The wife of the couple is very sickly. She has had a tough winter, I know because I have heard stories during inspection, etc. and I have seen the proof of 16 stitches on her head from falling due to high blood pressure. My question is this:

Say I close February 1st, give a 60 day notice of rent raise (more than required) to fair market value (a difference of $300-$400 in what they are paying now) and they decide to leave. What happens if the wife becomes ill during the moving process? Assume worst case scenario, am I legally liable for any illnesses incurred during the moving process? What if she becomes sick and bed ridden during the time they are supposed to move out? My worry of course is that I would that I am responsible because I would be "kicking them out" (Would I be though?) but this could be the non-landlord/business attitude of my speaking and something that I will have to get used to.

@Matt Burns I am under contract for my first deal so I still have plenty to learn but definitely keep saving! 10k is great. Figure out the amount of take home money from your job that you save and come up with a firm figure that you could potentially save by Summer '17 (could be a great New Year's resolution). Then you'll have a much better idea of where you'll be and the price point to look for.

No need to have a friend spot you rent if you don't need it. You don't want to be in debt if you don't need to. If rent is paid up front to help fund the down payment, the argument could be made that your friend owns a part of the house too, then you'd need a contract to clarify... it only gets worse. Save, save, save until you can afford the 20% down and then rent out rooms to cover the mortgage and ideally all other expense (Insurance, taxes, hoa, etc.) This is a great plan especially early on.

Also, keep in mind that if you are going to be living and fixing up, $200k may even be a little much. You won't want to get in over your head during your first property with a full blown fixer upper but if you plan to fix it up a bit over a few years, build some equity. You make your money when you buy, that's a fact. I recommend reading William Nickerson's How I Turned $1,000 into Five Million in Real Estate In My Spare Time. It gives a great model for going from one property to the next and literally doing what the title says. This could benefit you greatly as it goes into detail how to purchase the right property with room to fix it up, build equity, and move on to the next one. 

Keep learning and going through the forums. Best of luck.

@Michael Medeiros

thanks for the input, great thoughts. I will owner occupy the cottage and rent the 2unit. Yes, college (& post-grad) housing for Roger Williams is definitely a possibility, which through the site they use (), appears to average $500/bedroom (which is probably why I had that in my head) for students. Property is a 6 minute drive from campus. The reason I say unique is because of the lay out of the property, with the 2 unit and then a standalone cottage. I was not particularly speaking towards the deal, however I do believe it to be a good one.

@Anthony Thompson another great answer per usual. Thank you for taking the time. I called the building inspection department and they emailed me the assessment pages for both buildings (on same lot) and the tax sheets for last year, as well as the "zoning certificate" you mentioned where they will tell me what I can and cannot do with the property in the future for $25. Worth it? I don't see a need to change anything but to the point of it being a legal 3 family... my understanding is that it is a legal 2 family with a sfr ("Cottage") on the same parcel.

Hello - I recently have gone under contract with a unique multi family property in Bristol, RI.

It is 3 units. Unit 1 = 3 bed 1 bath ; Unit 2 = 2 bed 1 bath ; Unit 3 = 1 bed 1 bath

Units 1 & 2 are standard MF Up/Down (Unit 2/Unit 1) set up while Unit 3 is a standalone unit with 911 total sq ft of which 448 is livable sq ft.

Few questions:

1. I am putting rents per bedroom in Bristol, RI between $400-$500 based on comps. (1) Can anyone confirm or deny this and either way shed a little more light?

2. Financing this will come down to two things (in my opinion): the self sufficiency calc (3-4 unit FHA requirement - property must be self-sustaining) and finding comps to evaluate it for appraisal. (2)Does anyone know of a property similar to the one I have described? Or how else is could be evaluated?

• The self sufficiency calc will use market rents as the current rents are very low due to tenants being in for a long time. (formula = (Market Rents per appraiser * 85%) > (Principle + Interest + Taxes + Insurance + PMI)
• An appraisal will need comp's similar to a property like this, which I believe will be tough to find and am concerned about not being able to get a loan because of it. (3) Are there ways around this?

Note: I have an inspection tomorrow at 2pm and would hate to spend the money if I can't get the loan due to no comps.

Let me know your thoughts!

Tags: Rhode Island, appraiser, FHA, Underwriting, Boston

@Stephen Renehan are you interested in selling your MF? Please message me if so. Have been in the market for some time!

@Thomas Barksdale I work in the industry and sell 1st time homebuyer loans to investors. I have a little knowledge on what Mass Housing has to offer but your best bet is to use biggerpockets AND the mass housing website (

https://www.masshousing.com/portal/server.pt/commu...

They have a good structure to follow in how to get moving and learning everything you can. As does Biggerpockets to be honest! The MA site will help you as it is specifically geared towards Mass homebuyers. I assume you know all BP has to offer, it is my favorite site/podcast out there.

I suggest listening to the above and learning more and specifically diving into the masshousing website to get started (again!). Good luck!

@Jared Carpenter posted just below my comment as well.