UNDERCONTRACT Multifamily 3-unit
Nick SettePro Member
Investor · PA · Member since 2021 · 12 posts · 16 votesUNDERCONTRACT Multifamily 3-unit
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Denver McClurePro Member
Financial Advisor · Flower Mound, TX · Member since 2018 · 661 posts · 480 votes@Stanley J Black can help with insurance. Congrats on the Triplex!
9 Replies
- 1yDenver McClurePro MemberFinancial Advisor · Flower Mound, TX · Member since 2018 · 661 posts · 480 votes
@Stanley J Black can help with insurance. Congrats on the Triplex!
- 1yStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
@Nick Sette Congrats. During the diligence period make sure proper zoning/a 3 unit rental license is in place. Its the item that trips up most investors in Philadelphia.
- 1yAlan AsriantsBusiness MemberReal Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes
Quote from @Stuart Udis:
@Nick Sette Congrats. During the diligence period make sure proper zoning/a 3 unit rental license is in place. Its the item that trips up most investors in Philadelphia.
Bumping this - with triplexes especially make sure active licenses are in place. DO NOT buy without active licesnes, especially in RSA/RSD zoning. If you want a second set of eyes, reach out anytime. Lots of people get burned buying triplexes in the city
Alan Asriants - New Century Real Estate 592 Reviews
- Investor · Bucks County · Member since 2023 · 196 posts · 157 votes1y
What neighborhood is this triplex in and di you find the property on MLS or off market? Congrats on the contract! I am looking for some 3 families right now, but slim pickings out there.
- Investor · PA · Member since 2021 · 12 posts · 16 votes1y
I primarily look around west oak lane, germantown, mount airy, roxborough, east falls area. There are opportunities out there and I found this one on Zillow. If you need help looking I'm here for you! Feel free to send me a message and we can talk.
- Investor · Miami, FL · Member since 2015 · 355 posts · 268 votes1y
Congratulations. People are always looking off-market but sometimes there are hidden gems hiding in plain site.
- 1yStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
Robert is 100% correct. There are always opportunity on the MLS....properties that are listed/categorized incorrectly....properties that rely on public record square footage that is not accurate but the broker is too lazy to verify and simply relies on the autofill data, properties that have base zoning that allows for a better use, properties with unique characteristics that are not properly detailed in the marketing information, properties that are simply listed over priced and become stale and are good negotiation opportunities.
It takes time to identify these properties and often requires physical observation, not merely sitting behind a computer scanning through property listings, but they are out there. Also, the MLS/listed scenarios allow for more favorable settlement terms (the opportunity for more thorough diligence and deal analysis & ability to line up the best financing). The notion that MLS properties are bad investments because eyes are on them is the biggest misconception out there. Most "off market" properties are sent out to huge buyer lists of the most unsophisticated and inexperienced investors and those are the individuals you are beating out on term.
Here are real examples of MLS properties I recently purchased:
6370 Germantown Avenue: Four unit mix-use with one unit occupied. MLS listing indicated the property was 2400 SF and did not indicate the number of bedrooms in the 3 apartment units. Anyone who viewed listing would assume the units were studios or 1 Beds based on building SF. I toured the building, observed each apartment unit was a 2 bedroom, and was significantly larger than 2400 SF. Architect ultimately surveyed the building and verified the building was 4,100 SF. I purchased the building for $430,000, other investors reached out telling me I overpaid, but didn't realize my building rent roll once occupied would be $7,300 instead of the $5,200 they underwrote sitting behind their computer screen. This will perform as a true 8% cap fully leased.
7200 Germantown Avenue: Listed for $2.15M. Listing contained no interior photos and a limited write up with most who viewed the listing focused on "two retail spaces and "9 (1) bedroom apartments" At first look most would pass over this because they would see $195K/unit with 9 being 1 bedroom units. Listing didn't mention the retail spaces were 3,250 SF and 3,400 SF respectively. One was leased for $5800/m to a credit tenant and the other was a corner space that had a 3 year old HVAC system and ventilation system in the kitchen area already installed. Nor did it show the 700 SF solarium on the second floor or the fact 4 of the "1 bedroom" apartments were 800+ SF with some of the best floor plans you can produce. I offered $1.73M for the building days after it was listed and 6 months later ended up buying the building for $1.73M. The building appraised as-is for $2.1m. I bought the building with a $14,800 rent roll. Through renovations of the apartment units and recently executing a lease for the restaurant space, by the fall my rent roll will be increased to $29,600.00, My total costs will be $2.85M, and anticipate stabilized valuation to be $4M and is a true trophy property I will own with my capital partners for years to come.
There's a ton of others I've picked up off the MLS, these are just examples of what thorough observation of MLS properties can yield. I am also on countless wholesaler and broker "off market" lists and no properties ever compare to what I buy on the MLS. I will however buy directly from sellers, that's the only other avenue I rely upon which also yield similar results.
- Rental Property Investor · Philadelphia, PA · Member since 2021 · 782 posts · 505 votes1y
Quote from @Stuart Udis:
Robert is 100% correct. There are always opportunity on the MLS....properties that are listed/categorized incorrectly....properties that rely on public record square footage that is not accurate but the broker is too lazy to verify and simply relies on the autofill data, properties that have base zoning that allows for a better use, properties with unique characteristics that are not properly detailed in the marketing information, properties that are simply listed over priced and become stale and are good negotiation opportunities.
It takes time to identify these properties and often requires physical observation, not merely sitting behind a computer scanning through property listings, but they are out there. Also, the MLS/listed scenarios allow for more favorable settlement terms (the opportunity for more thorough diligence and deal analysis & ability to line up the best financing). The notion that MLS properties are bad investments because eyes are on them is the biggest misconception out there. Most "off market" properties are sent out to huge buyer lists of the most unsophisticated and inexperienced investors and those are the individuals you are beating out on term.
Here are real examples of MLS properties I recently purchased:
6370 Germantown Avenue: Four unit mix-use with one unit occupied. MLS listing indicated the property was 2400 SF and did not indicate the number of bedrooms in the 3 apartment units. Anyone who viewed listing would assume the units were studios or 1 Beds based on building SF. I toured the building, observed each apartment unit was a 2 bedroom, and was significantly larger than 2400 SF. Architect ultimately surveyed the building and verified the building was 4,100 SF. I purchased the building for $430,000, other investors reached out telling me I overpaid, but didn't realize my building rent roll once occupied would be $7,300 instead of the $5,200 they underwrote sitting behind their computer screen. This will perform as a true 8% cap fully leased.
7200 Germantown Avenue: Listed for $2.15M. Listing contained no interior photos and a limited write up with most who viewed the listing focused on "two retail spaces and "9 (1) bedroom apartments" At first look most would pass over this because they would see $195K/unit with 9 being 1 bedroom units. Listing didn't mention the retail spaces were 3,250 SF and 3,400 SF respectively. One was leased for $5800/m to a credit tenant and the other was a corner space that had a 3 year old HVAC system and ventilation system in the kitchen area already installed. Nor did it show the 700 SF solarium on the second floor or the fact 4 of the "1 bedroom" apartments were 800+ SF with some of the best floor plans you can produce. I offered $1.73M for the building days after it was listed and 6 months later ended up buying the building for $1.73M. The building appraised as-is for $2.1m. I bought the building with a $14,800 rent roll. Through renovations of the apartment units and recently executing a lease for the restaurant space, by the fall my rent roll will be increased to $29,600.00, My total costs will be $2.85M, and anticipate stabilized valuation to be $4M and is a true trophy property I will own with my capital partners for years to come.
There's a ton of others I've picked up off the MLS, these are just examples of what thorough observation of MLS properties can yield. I am also on countless wholesaler and broker "off market" lists and no properties ever compare to what I buy on the MLS. I will however buy directly from sellers, that's the only other avenue I rely upon which also yield similar results.
Stuart - Thanks for sharing your two stories of recent purchases! Great deals!
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