BP - I'm reaching out to see if there are any investors that can provide advice/info about investing in Pottstown and Norristown? Specific to buy and hold investing. Any success? I appreciate the help and advice.
I'd also be interested in hearing about issues, if any, with Norristown's HARB (HISTORICAL ARCHITECTURAL REVIEW BOARD). Are they overly aggressive? Any tips for expediting the process? How has Norristown been for working with landlords?
We have been invested in Norristown for 2 years now. We have acquired 12 properties with 17 units. I don't feel like an expert but do have some experience in this area. A few comments:
- We do not invest in Pottstown but I know many people do. My reservation is it's location. There is just less employment options for potential tenants than in Norristown.
- There are two different historical districts which have different levels of standards. Most of Norristown does not fall within either district. I am doing work on two properties now and beginning to work with the review board. I am told that communication and transparency is key. But I cannot speak from experience on this yet. Most of our properties are not within the historical districts.
- Is the code board overly aggressive? I would say they are aggressive but there are also "slumloards" that maintain despicable properties and have no conscience with respect to their tenants. They are aggressive but clearly they need to be. I have not had any unrealistic requirements. There are differences between inspectors but generally, we are aligned on the need to maintain safe, clean, and warm properties and conditions for tenants. I have looked at properties that are so bad that my offer required the owner to remove the tenant as a condition of settlement due to the living conditions. In terms of the Transfer inspection (locally called U&O but it is not actually a U&O inspection/cert) I find it to be very effective to have a local contractor be present for the inspection and I try to be there myself as well. I also have the same contractor accompany the inspector for the re-inspection. I generally figure for $3k-$5k to bring a property to the point that we can get the rental license. Many of these items are things I would need to do anyway- Hand rails, painting, operational windows, plumbing leaks, roof leaks, etc. But I have heard some horror stories but have not had that experience myself... yet.
- Be aware that there is a $65/unit annual rental license fee. Any back fees will need to be paid to get a current license. Address this in your offers. Also for a MF property it is critical to ensure the property is currently zoned for MF. If the rental licenses have expired for more than 2 years you will need a Zoning Board hearing to get the zoning re-instated. And be aware, that may not be returned to a MF property. Have a SF back up plan if the property is not currently zoned for the intended use.
- Trash is paid with local taxes but not reflected as a "Tax" if you look the property up on-line. Cost is about $400/yr per unit if I remember correctly.
- In general, I find the Borough administration to be very disorganized. Keep good personal records! I try to pay everything in person (fines-of which expect many for litter, taxes, rental licenses, inspections, even trash). I have been assessed fines and even had to go to court for issues that were a result of poor record keeping on their end. One court case was dismissed during the hearing when I showed the U&O cert that I was already given by the Borough. Another one was recalled when again, I showed them the documents they gave me that they said I had not filed. Keep your records!!
- Use a local contractors and PM if possible.
@Keith W. Great info! I appreciate it.