Rental Property Investor · New Castle, DE · Member since 2016 · 376 posts · 158 votes
Good day BP! I am interested in buy and hold's of multiple MF vacant properties located in the Historic District of Wilmington, DE (West Center City, Trinity Vicinity and Quaker Hill). Most of them are also owned by the city. I've been in contact with the city planner and he wants to connect me with the zoning administrator to further discuss my interests. I've got about 15 questions to ask between the two of them, but was wondering if you happen to have any general questions or renovation lessons ... successful and not so successful in working on properties within a historic district. I've read about local building permit applications and approvals and still wanted some additional insight.
** NOTE: RESPONSES NEED NOT BE SPECIFIC TO WILMINGTON, DE AS ANY MAY STILL APPLY TO MY AREA **
@Cassandra Sifford, one thing you may need to consider is vacant property fees. I bought a house for myself that had been vacant for 6-7 years, and it took me a while to make it livable; New Castle County made me register it as a vacant property while I worked on it, and said that I have to pay a fee of $500 a year after that, going up to $1,000 on year two and so on each year. Make sure that is not the case in Wilmington, and/or make sure you can fix up whatever you buy before you get hit with those fees.
City of Wilmington has this program as well. Link below.
If this is your first rent property, I would think long and hard about this. Buying vacant properties adds a large degree of risk. Buying properties in a historic district adds a lot more bureaucracy and cost. This has both!
If you have already cut your teeth on other rental projects, I'd quadruple check all your requirements. We have a militant historic district around here and they often check that the shade of paint on the house was EXACTLY what was approved and not a half shade different.
@Account Closed I only own one investment property currently. It is also along the revitalization path in my county. I'm realizing that all the levels of approvals may have me holding onto the property for an extended amount of time, tying up my funds for additional deals. The properties I'm most interested in are in an area that is on the up rise so it could be well worth the wait. All of the properties are existing brick or paint that needs freshening up, at least from the exterior eye.
@Cassandra Sifford wow now i makes sense. That's a lot of money and the Value on the houses around 9th can skyrocket. Might make sense to buy something cheap over then and see how this plan changes that area. March 2020 is a quick turnaround as well.
@Account Closed That whole area is a small part of the revitalization plan that the city has. It's little areas within Center City that they're concentrating on. I need to get my DTI down so I can purchase some of what's happening. I reached out to someone at the Wilmington Land bank and they advised me that they are putting a new policy in place where they're allowing investors/absentee owners to purchase some of these properties that the land bank owns. Darn near all of them are $2k, but need a ton of work. It would be worth it to buy these properties, renovate them as your pocket allows and rent them out when the time comes. Check it out!
Is the city planner also the historic preservation person? If not you need to find the person at the city planning dept. in charge of historic homes in DE. That person will likely have tons of files on each property including info about previous owners etc. Check to see if any of the properties are contracted with the State for mandated repairs. In California some historic homes are under contract to maintain their upkeep. If this exists there may be a backdated list of required repairs that are overdue. I recently offered on a historic home that had $100,000 in state mandated repairs that were all cosmetic. I would sit down with the historic preservation specialist and review each property, what repairs you want to make, what is even allowed vs. what may be required. Definitely ask about the window replacement requirements and find out how strict they are. Could be a huge hidden cost.
@Cassandra Sifford That's good to hear that they're opening up the purchases for investors. Last time I looked it was only available to people willing to buy and rehab the property. Do you know when this will go into effect?
@Laryssa Stecyk Thank you for the advice! They are two different people. I met with one of the city planners last month and talked to him about the properties I was most interested in. I've submitted an FOIA form so I can look through some of the files of these properties. My interest in some of these properties now is on the low end as most of them have been vacant for longer than 12 months so they've lost their zoning. I reached out to the zoning admin, but he's so bogged down and hasn't responded as of yet.
@Account Closed Thank you for chiming in! I thought of it that way, but figured some of the properties may need less work and could be good buy and holds . I'm interested in appreciation, but that's just a bonus. The way they're building up some of these areas, appreciation could be a high. I see the supply and demand issue as a good bit of them are in rougher neighborhoods and are probably have a higher tenant percentage vs. OO.
Let me know if you fellas want to connect. I enjoy a good beer or two and good conversation :)
@Cassandra Sifford, one thing you may need to consider is vacant property fees. I bought a house for myself that had been vacant for 6-7 years, and it took me a while to make it livable; New Castle County made me register it as a vacant property while I worked on it, and said that I have to pay a fee of $500 a year after that, going up to $1,000 on year two and so on each year. Make sure that is not the case in Wilmington, and/or make sure you can fix up whatever you buy before you get hit with those fees.
@Cassandra Sifford, one thing you may need to consider is vacant property fees. I bought a house for myself that had been vacant for 6-7 years, and it took me a while to make it livable; New Castle County made me register it as a vacant property while I worked on it, and said that I have to pay a fee of $500 a year after that, going up to $1,000 on year two and so on each year. Make sure that is not the case in Wilmington, and/or make sure you can fix up whatever you buy before you get hit with those fees.
City of Wilmington has this program as well. Link below.
@Rumen Mladenov Thank you for the info! I'll have to do some research. It's sad that they try to bleed those who are trying to purchase vacant properties. Are you only required to pay the fee while the property is vacant?
@James Masotti Thank you for the info and creating this meet up!
For the record too anyone is allowed to come. They just need to pay for their own beer and food :-)
It's also super helpful if they can actually indicate on the event page I posed if they are coming, this way when I show up at the venue, or need to look for an alternate venue in the event of inclement weather, I know roughly speaking how many people to expect.