All Forum Posts by: Chris K.

@Chase Gu

For our projects, we typically see a limit for overhead and profit in the 15% to 25% range. But we are the subcontractor so our numbers are a bit different. GCs typically have a limit between 10% and 15%. So 12% seems reasonable on paper. 

I would strongly advise that you work with an insurance broker when it comes to coverage. I deal with insurance issues all the time at my construction company. Even as a trained lawyer, insurance coverage documents can be brutal. 

For performance bonds, you can require the contractor to have it. But as a general rule, that will increase the costs on your end as well. Setting aside the fact that the general contractor needs to factor in the bond costs in its bid, many smaller contractors cannot obtain a bond. So you may end up only receiving bids from "larger" GCs. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Nicholas Weckstein

It depends on the lender. They will look at multiple factors but they may end up counting the projected income for the unit that needs rehab. But you really won't know until you approach the lender. 

Note that because it is split between two buildings, they may try to steer towards you guys towards a conventional Fannie/Freddie loan. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Nicholas Weckstein

Try Jack from Insight Home Inspection, LLC. Also had a good experience with Tyler Long from National Property Inspections. Should me a PM and I'll be happy to make the introduction.

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Chris Wilkening

I would do it with a CPA for the reasons that others have mentioned. But maybe you can survive if you only have one property with minimal activity.  

Some thoughts to ponder: 

I value my time somewhere between $200 and $300 an hour. I factor that in when I decide whether I want to do it myself. For example, I have a friend that's very frugal. Among other things, he likes to buy parts online and bringing it to a car mechanic. The idea is that it's cheaper to get it online then having the mechanic order it. I would never do that because it's most likely the case that me ordering, picking it up, and delivering to the mechanic will wipe out any savings I could've gotten. And what if I order the wrong part or if the part is defective? Then I waste more time doing less productive things. 

It's one reason why I hire lawyers even though I'm a lawyer. While I think there is a value in knowing all parts of your business, I simply do not have enough time to research every issue that can pop up in my businesses or investments. It's not so much that I can't do it --- it's just inefficient use of my time. 

A more extreme example of this is Warren Buffett and his private jet. Being the frugal guy he is, he was always critical about company executives relying on private jets to get around. The story goes that his advisory team finally twisted his arm enough to buy a jet because they saw the value. He first named it "The Indefensible" because he thought it was absurd for him to ride in them given his past criticism. But after a year or two, he changed its name to "The Indispensable" because he realized the plane made him and his team much more efficient. 

Long story short, maybe Turbo Tax is fine. But I would also look at it long term and ask yourself if you are using your time efficiently. Not sure what you do and how you value your time. But it might be worth it to go with a CPA if you really thought about it. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Nicholas Standford

Everyone already gave solid advice. I would just add that you are next to Syracuse Glass --- a major glass manufacturer that has been owned by the same family for over 100 years. They don't sell windows but they are a major player in the glass/glazing world. Maybe they have good local contacts for residential replacement windows. I'll be happy to ask if you PM me your info. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Kevin M.

Based on what you wrote, the application should be part of the record. I'm not sure how many days have passed since you filed the appeal. But the ZBA should transmit their full record to the CCP. They will also give you a document that summarizes the rationale behind their decision. Once you get that, you'll have a clearer understanding of how to attack their position. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

I can't say I had to deal with the Philadelphia ZBA and I'm by no means a zoning law specialist. But as a general rule, you have the burden of showing that you meet the requirements of a special exception. If you do, then the burden shifts to the objecting party. They now need to show that there's some other reason why the special exception should not apply.

There is various case law on what are valid objections. It can get rather technical. But they basically need to prove that granting the special exception will lead to a "substantial threat" to the health and safety of the community.

The tricky issue that you may need to deal with is the "record." As a general rule, the Court of Common Pleas accepts the record before the Zoning Board. On appeal, the Court will generally not allow either party to introduce more evidence. There are exceptions but that's the default rule.

Based on what you wrote, it sounds like they rushed through it. I don't know if that is favorable to you since I have no idea whether you made your case. If you did, then they probably want to introduce more evidence. You can try to contest that.

Something to note: the above is one reason why a large corporation may send a team of lawyers to argue the case at the Zoning Board level. They do so despite fully knowing that the Zoning Board hates whatever they are proposing. The lawyers have no illusion that they will change anyone's mind. Instead, they are there to build a solid record to win at the Court of Common Pleas and beyond.

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Geo Johnson

It really depends on what the "business" is. If these properties are just investments and he is worried that his children do not have the expertise or skill to manage it, sometimes you can create a family trust and hire a trustee to run the properties. For example, that's kind of what Jerry Buss did with some of his real estate assets before he passed away. Obviously, his situation was much more complicated/convoluted since his family trusts also had to deal with the Los Angelas Lakers. But the basic set up was that. 

If it is an actual operating business that goes beyond simple real estate investments (e.g. construction company, restaurants, etc.), you'll want to do succession planning at the corporate level. Very different topic. 

It's honestly hard to talk about all this in a vacuum because it's so fact-specific. But simply assigning it to an LLC and having the CEO manage it may not ultimately be beneficial. Depending on who his heirs are at the end of his life, it may end up complicating matters as each heir should get a part of the LLC. And that can get convoluted.

If he has substantial assets, I think it's time for him to talk to an estate planning attorney. Depending on his net worth, it may honestly even make sense to hire a team to examine his situation. For example, we once had a wealthy client that had about four different legal teams and three CPAs working on it due to him dealing with very complicated issues (e.g. assets in multiple countries, having several operational businesses, inheritance tax concerns from multiple jurisdictions, etc). That was obviously a very high net worth person but the same principle could apply to someone who is less wealthy. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Geo Johnson

Transfer from an individual to an LLC has always been subject to realty transfer tax. That's true even if the LLC is 100% owned by the individual.

Depending on his age and net worth, perhaps he could look into irrevocable trusts. It's a big decision and it's best to work with an estate planning attorney that specializes in that since it's still an actively litigate issue between the taxing bodies and taxpayers. 

Maybe he could perhaps consolidate his investments by selling the investments and 1031 exchanging it into a single-member LLC. Or just invest in something else.

I would say the biggest issue he needs to think about is not necessarily outside liability but end-of-life costs. Unless he got long-term-care insurance, he could lose a lot of money paying for nursing homes. Depending on the area, he could easily pay $10k a month right now to be in a nursing home. So let's say he stays in a nursing home for two years he passes away. That's $240k out of his pocket. And that's even before considering the fact that nursing home costs continue to grow at a rapid pace with each passing year. So depending on his situation, he may want to talk to an elder law attorney that specializes in Medicaid planning.  

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Marky Suazo

Happy to help. I would suggest that you expand your search outside the city limits. Scranton is fine but I don't see any inherent reason why you should ignore the neighboring municipalities. 

Feel free to PM me for more details but I have investments in NEPA, AZ, and Korea. 

I would be happy to introduce you to contractors although most contacts I have nowadays are "bigger" contractors. But I do know several contractors that branched off from more established companies. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.