All Forum Posts by: Peter Kuck

@Kerry Baird. This is an incredible list. Thanks for sharing!

@Avery Carl. Thank you.  Just looked at PenFed.  Prime + 1.5% is pricey, but a good backup option.  Maybe that's the price I'll have to pay anywhere.

Looking for lenders who you've seen are willing to issue a HELOC (or loan) in 2nd position on an investment property. Most I've seen require 1st lien position on investment properties. Any advice or leads appreciated. Property is in VA.

@Afoma Okwudiafor Agreed with @Anthony Thompson.  You don't see ADUs much in S. MA or Providence area.  Those typically arise where land values are a significant price driver, thereby incentivizing maximization of the land utilization.  You do see it in Boston, increasingly more every day, but that's the only place I've seen it commonly in this area.

@Anthony Thompson - thank you for all of this detailed information and guidance.  I'll certainly look into the lot size, parking, and property history details.

I'm going through initial diligence on a MF in Providence that has a few illegal units.  It is already a multi-family, so I am hoping the process to update the number of legal units is easier than shifting a SF > MF.  Any guidance or war stories going through this process in Providence would be greatly appreciated.  Are there any attorneys that specialize in facilitating this process, or is one even needed?

I am local and already have a 3-unit, but have not had to go through the rezoning process before.

Hi Warren - info on RIREIG can all be found here: https://rireig.com/

Taxes in Providence make the economics much more challenging for any property than most other places.  Make sure you are looking at non owner occupied rates when doing your analysis (it's 2x the owner occupied rate).

Overall, I think it depends on where you're looking in Providence.  Prices are absurd on the East Side, but probably also more recession-proof.  When you move to the other corners of the city you can get some more attractive deals, but then you have more management issues and pricing volatility.

A lot of Boston money is coming down here right now and driving up multi-family prices.  I suggest you look at neighboring cities if you are interested in Rhode Island.

I think your property tax estimate may also be a bit low.  If this is going to be a non owner-occupied property, your tax rate is ~2x the owner-occupied property tax rate in Providence.  You can review the tax rates here: http://www.municipalfinance.ri.gov/documents/data/taxrates/2017-Tax-Rates-12-31-16-FINAL.pdf

@David Sisson I recently purchased a MF in Providence, and have been going through several of the learning experiences recently that you have.  East Providence is a bit of a different animal, but some of my learnings may be helpful for you.

- Finding tenants & pricing: Zillow was the best resource, bar none, for this.  I knew exactly what the market price was and even though I listed the property through several platforms 3/4 of leads came through Zillow.  I've been using Cozy to manage everything (from listing to management), which automatically syndicates the listing through several different sites and has the background/credit checks built into the application process.  You pay nothing, the applicants pay for the screening fees.

- Property taxes: they swing dramatically depending on whether the property is owner-occupied.  Make sure you build this into your model.

- Water and sewer: costs are much higher than other areas, as has been mentioned here already.  Make sure you build this into your model.

- Re-zoning: this appears to be very complicated in these parts, so not sure how easy it will be to split your double lot and sell the other half.

- Insurance: I don't know if this was only me or others have experienced this as well, but it was exceedingly hard to find reasonably priced insurance.  I'm still paying a lot more than I expected to, but I heard everything from "lead paint" to "coastal area" (?!?) to "we don't cover RI".  I ended up using a broker who already knew who would cover a MF around here, but would love to hear others' best practices/experiences.

- Plowing/snow removal: it seems like many SF tenants are used to dealing with this themselves for a non-owner occupied property.  However, MF tenants appear to be more accustomed to the owner/manager taking care of it.  I haven't figured out how I'm going to do this, but it is an issue I need to figure out soon...