All Forum Posts by: Eric Greenberg

Just an fyi, you cant charge a pet deposit if you are already collecting last month & security deposit like most do in Philadelphia. You need it to either be a monthly fee as part of rent or a non-refundable fee. 

Maintenance and capex can be all over the map for these older properties. It matters what has been renovated already, what type of systems are in place (type of hvac, roof, plumbing, etc) 

What Ill add are the items you as a landlord will need to pay that you may not have in your underwriting.  

Rental license for each unit [$63/yr]

Lead cert for each unit [Varies depending on #bedrooms in each unit]

Fire alarm monitoring (if needed) [$4-$600/yr]

Fire alarm cert (if needed) [$100-300/yr]

Sprinkler/standpipe cert (if needed) 

Refuse Trash Bill [$500/yr] or private trash pickup

Electric bill for shared areas (Assuming everything is separately metered)

Water: Most older rowhomes do not have separate water meters. You can buy inline products to gage the usage but most of us use the number of people in a unit to charge the tenants a fixed cost. But some months you may eat some of the cost. Hopefully your numbers are close enough that you break even. 

Depending on your timeline an agent who knows investing and works with investors is a great path forward but I will say if you dont plan to actually pull the trigger on a property for a while they may help some but may not be fully engaged. 

You are more than welcome to DM me to talk about specific areas if thats helpful. 

Quote from @Nikhil Bhat:

I guess it matters how well you know the area. If you dont know it at all you need someone on your team that does, especially around here. It’s vital. Then I would start in Zillow/Redfin/etc to select multifamily and choose whatever price point youd like. For example you choose $200k max price youll see most of ‘center’ city has nothing at all to offer until your far north/south/west and the places that do will be C/D most likely if it doesnt need more than the $10k rehab you were looking for.

Then start ramping that price up until you hit current deals or recent sold MFHs in areas that are A/B. Thats a quick way to tell what your budget should be. That being said covid makes it a little tough but youll be in the ball park. 

Couple quick thoughts:

I usually use 8.3% for vacancy (1/12 months)

Id add in a management fee 8%+ even if you will be managing it yourself but for future you

You also do not have any expenses for maintenance and capex 

Are you paying all cash? I dont see a mortgage 

Is insurance really $1452 a year? 

Most folks in Philly underpin and dig down to accomplish that but rarely do we have such high ceilings on a 1st floor. Id first find the costs of both approaches to evaluate which is the best decision and confirm you do have the height to make it work after flooring/sheetrock. Do you also need an egress for living space in a basement in Jersey City? 

What type of mortgage and rate do you have on that property? Do you have a primary with equity? A 401k to borrow from? 

Quick thoughts:

I like 1month/12month=8.33% vacancy

Id put 8% in at a minimum for management for the future

Capex and maintenance are much too low

Can you have the tenants pay water/sewer? 

Is your interest rate 8%? 

Will you need any money allocated for outdoors work like snow/mowing/etc? 

No issues for me fwiw. 

Our local philly FB group is very helpful

‘Philadelphia Landlords Connect’