All Forum Posts by: Eric Greenberg

Our local philly FB group is very helpful

‘Philadelphia Landlords Connect’ 

Id be really really careful about a multifamily for $120k that only needs $10k rehab in and around Philadelphia. Youll absolutely be in a C/D neighborhood and would be the opposite of what Id tell an out of state investor to start with in Philly.

Id feel differently if they did something risky but to me they did not. 

Are you worried if they don't get bailed out that Institutions/VCs/etc will only bank with large banks (JP Morgan/BOA/etc) who have 500B+ in asset?  I could imagine in return anyone outside those few banks, especially small local banks, will start loosing footing which could lead to their slow death and a more monopolistic banking scenario. 

It sounds like this aspect could be more influential than the sales price for the seller. How under market is their rent right now and where would you like it to be? How do your numbers look when underwriting their unit at the current rent? Im always a bit weary of taking on a long time friend/family member who have been renting for a while at well under market rate. Have you reviewed the current month to month lease or estoppel certificate and verified via bank ach/etc that they are actually paying? 

Agreed with Matt. Rather than only letting the numbers dictate the decision, Id let the house and area dictate which I chose. That being said there are certainly areas in both Brewerytown and Kensington that I like and other pockets not so much. 

Id also be a little weary of new construction and do your due diligence on that builder to see if they have had lawsuits/issues in the past, especially with water intrusion issues. 

A couple thoughts:

Since its two homes with two roofs, two kitchens, etc id double all of your expenses at the end  

I like to use 1 month /12 month = 8.3% for vacancy 

I would add more than 5% for Maintenance and 5% for CapEx unless there arent AC units and other costly items to fail

I dont know what part of NorCal but any chance youd need to account for snow or any outside maintenance that the tenant wouldn't perform? Are there garbage collection fees or are they all wrapped into the taxes? Any other costs for rental license /etc? 

Id also be curious what type of neighborhood is the property in( A/B/C/D) and if that aligns with your overall buying criteria.

So you did a cash out refi to only get $5k cash back? Or is this a hypothetical?  

The cash you receive from a cash out refi is not taxed.

Congrats! Lets hear some details!

I dont know the going rate of ARMs vs fixed rates for your scenario so the first thing is to check if its even worth it. Since you will only live there for a year Id think it could be best to get a fixed 15-30yr loan as tight now its your primary which would be a better rate then a investment property when you go to refi. 

You are more or less trying to time the market with the belief that in X years an investment property rate will be better than todays fixed primary rate (assuming you dont plan to move back into this unit).