All Forum Posts by: Prashant P.

You would have to do the same due diligence as if you were buying a property on the MLS. This includes assesing purchase price, reviewing comps for ARV and conducting a home inspection.

I would also make sure the deal is legally sound. There are alot of wholesalers and alot of people just starting out, you want to make sure there are no legal issues.

Darrick P., in the Philly area there are several things to check. Make sure there are no liens from PGW, PECO, Philly Water or Philly taxes. Since alot of homes are older you have to watch out for structual and electrical issues.

I have rehabbed a home with mold. I would not suggest that you have the mold cleaned. It is better to remove and replace as needed. You may clean mold off the surface but water may have penetrated behind the drywall or under carpet causing mold to grow in those areas.

If only a part of the home has mold, you need to insure that when you remove the moldy material from the effected area that it is sealed so you don't contaminate the other areas with mold spores.

Proper mold remediation is not "relatively cheap" but can be quite expensive depending on the problem.

It is also important that you find the cause of the moisture or your mold will just come back.

I have been in homes with mold and you can feel the effects within 15 minutes. So you want to make sure you take care of the problem correctly.

To inspect the deed and see the original listed name on the property, you can check with the town or county clerk/recorder of deeds. In most cities, these systems are online and you can view the files online.

I would also conduct a title search on the property to make sure the title is clean and their are no outstanding liens. This can be done by contacting a title comany.

You should also contact a lawyer and draft a purchase agreement for the house. If the seller wants to do all the paperwork himself, he can deal directly with your lawyer and then you know if it is legit.

I agree with Dion, the deal seem shady. Why would a seller winterize his own property. This is done mostly by big banks and goverment owned properties where no one is around to maintain the houses.

I would ask him to turn on the utilities and dewinterize to see if all the mechanical systems are working. Unliess you plan on replacing them.

Hi Frank,
I invest in the Philly area. Good to see some more people from the area.

Prashant

You will also have to bring your building up to code for a multifamily house. This may seperating utilities, adding fire rated doors, providing more means of emergencey egress and eletrical load upgrades.

Hi Eugene, welcome to biggerpockets. I myself invest in the Philadelphia area. To provide you with some feedback, you live in a great market where you can make positive cash flow on mostly any property type you pickup if you are investing in the Philadelphia county area. The reason for this is that the area is saturated with renters who cannot qualify to purchase a home.

You have the right idea but trying to find a property that might need some light rehab and renting it out. In my expierence, you can pick a small three bedroom row home and rent it out while getting a good ROI.

The problem you will face in the Philadelphia area, specifically college areas is competition. Everyone and their brother wants to buy a house close to Temple, Upenn and Drexel. This means that house prices much higher than the rest of Philly.

I would stick to small rowhomes or duplexs.

I don't allow tenants to do any repairs. My lease even states that all repairs must be authorized by the landlord and must be done by a landlord approved contractor. The reason for this is that you are taking someones word that they capable of fixing something. Better to spend the money and get it done yourself or do the work your self.

In your case you can either ride out this tenant until the end of his lease term and then not renew. You already know that the damage is done and you can get it repaired and charge the security deposit. There is no sense in repairing it while they are there because they can easily ruin what you have fixed.

Just one thing to remember when doing a rent to own is to check the credit of the tenant more deeply. This person is going to have to qualify for a mortgage at the end of the term.

I would also ask the owner to get an inspection on the place. You would hate to get into the deal and find out there are more problems. The tenant could say everything is fine know that his current landlord is a dead beat. Once they get a new tenant, they might ask for a million repairs.

Just do your homework.

I think you do not see this language in leases is because it would be difficult to defend in court. In your clause you mention normal wear and tear. What might be excessive wear to you, might be normal to someone else like a tenant.

I think instead of putting clauses in that will reduce the damage to your property, you have to figure out how to midigate your risks as Joel pointed out.

For pets, have a solid pet policy and charge additional security deposit for pets. You pet clause should mention that tenant will be responisble for any damage caused by the animal living in the house.

If your hardwood floors are ruined right now, there is no sense in refinishing while the tenant is living there. The dog is just going to pee on them again. If you took photos before the tenant moved in and did a walk through with them, you will be able to charge them for floor repairs when they move out.

Alot of older complexes in Northeast have large industrial units and heat is controlled for the entire building. In a case like this, you may want to see what the average cost for gas is for the entire, add 10% and divde that cost equally among all the units. Increase the rent by that amount.

If the system is older, you may want to look into single unit system. We did a large school conversion where we bought large hotel grade heat/air unit for each apartment. They sell manifold for the top of these units which creates different vents for different rooms. Works great.