All Forum Posts by: Rob Beeman

Very true in reference to the City of Wilmington, DE and the requirements for permits pertaining to improvements. My comment was referencing the County, not the individual cities or towns within the county. Have seen Wilmington permit requirements migrate through the years and get, in my opinion, a little crazy, almost to the point that some investors avoid doing projects there.

Towns like Elsmere, DE and some small towns & townships in Delaware County, PA seem to almost count on permitting fees to help them survive. In Elsmere, DE the realtor that I used needed a permit to install a for sale sign in the yard! I have had to purchase a temporary GC license (exceeding $1K) in addition to the permit required in a small municipality just to work on the property.

Every municipality is different, so it is best to research which municipality would oversee your project and become familiar with their regs.

CONGRATS!  By the way, its not just the FIRST flip that will a learning experience.  Everyone will have some element that will be new and not yet encountered (in the property, with the buyer, with a contractor, etc.).  

The good news is, you fished it, you conquered it, not it conquering you! Pat yourself on the back and start searching for the next one (perhaps with less rehab needed). I have a saying, regardless of how much fun they were, or profit earned - : "They all look best in the rear view mirror."

Thanks for sharing your flip experience with us.

The southern and southwestern states are less expensive than the northern states (plus warmer weather). So you will get more for your money in the south and southwest. 

If you are going to live in one unit and rent the others, and are taking title in your names personally, consider a FHA loan if the property is 4 unit or smaller. The rates and down payment requirements are lower. Additionally, there is a FHA loan product called the FHA 203K that will allow you to finance some improvements into the mortgage and the improvements are conducted after you settle on the purchase. Good luck.

I have found from personal experience to check with the local license inspections department (L&I). In New Castile County Delaware, almost nothing short of an addition needs a permit. However,  10 minutes away in Pennsylvania, the rules for work requiring permits adjusts from township to township! The same with New Jersey. 

Don't even get me started on Philadelphia requirements. They wouldn't even let me pull my own permits (since it was owned by my LLC...not TECHNICALLY me), only a licensed GC (or the INDIVIDUAL property owner) can pull the permits. So, I gained a GC license, just to control permitting on my projects (Yes, I AM a control freak).

So, I always check out the permit requirements tied to work type with the local municipality.  I find that it avoids fines and stop work orders.  Plus I sleep better at night.

I have found that it depends on the resell bracket of the property. First time home buyers haven't really noticed, nor expressed concerns (as long as all of the appliances match in color). 

Higher end flips..............different story. Those buyers have looked to certify that they are all matching brand.  In fact, one high end buyer expressed at the closing table that the brand new $6K+ appliance package that was just installed during the rehab was going to be replaced with "another better brand" after she moves in!  Can't express the feelings felt from that comment after just spending the 6g's to have them put there!  Lesson learned.

BRRRR is: Buy, Rehab, Rent, Refinance, Repeat. A method used by landlords that want to purchase properties in need of improvements, have the improvements conducted, place a tenant(s) in the property, then refinance using the updated (current) market value and hopefully pull cash out during the refinance.

With regulation adjustments now the average investor can consider investing as a crowdfunder, where in the past only accredited investors had this luxury, and the option to invest in a REIT, which required extensive minimum investment sizes.

Might want to search "crowdfunding" online and check out the required minimums for throwing your hat into some of the funds.  The removal of risk however will be almost impossible to accomplish as risk sort of goes hand-in-hand with any investment vehicle.  Good luck!

My experience is to contact the local credit unions near the property and ask for the commercial lending division (if the property is titled in an LLC, even if the property type itself is a residential property).

Although they may require that you become a "member" and open up a checking account with $5.00, they often do not have minimum loan amounts, keep these loans in-house and are eager to support the community.

Additionally they often have lower FICO requirements of the loan guarantors.  I have found the local credit unions to be an awesome resource. Just make sure you are working with the commercial department, not the residential department.

I am not a big fan of total passive investing when it comes to real estate. Perhaps I am a control freak, but I have found that I do best when I somehow work along side my investment. At the very least, please make effort to do your homework prior to investing.

In the case of being the private lender, make certain that you do the following: Only 1st lien position, visit the property, conduct your research on current market value & current market trends, as well as future projected market trends for that immediate area, have a professional appraisal conducted on the property by an appraiser of your choice, research local laws pertaining to foreclosure process & costs, conduct a lien search, make certain that the property does not have a ground rental attached to it that is owned by a separate party (as this can jump in front of the mortgages on collection/foreclosure), consider having the borrower gain a term life insurance policy with the lender (you or your entity) as the beneficiary (might help in case there are problems with probate in case of borrower death), research state laws pertaining to lending to be certain of maximum interest rate/points/fees allowed by law, and also if a license is required for this form of lending in that particular state (in some states if you loan to a person, it is considered consumer lending, but if you loan to an entity, it is considered commercial lending, and the laws apply differently for each type of lending), have as much collateral for the loan as possible, even consider cross-collateralizing of another property if possible, just to name a few.

Bryan, sorry if it came across that way. We provide the training locally in Philadelphia, however the law covers the entire nation, in addition to some states adopting and enforcing their own laws. So we can not train everyone. However, forums such as this ARE ready by people from everywhere, so they can be informed & do their own due diligence as to whether the law applies to their business or not, and if so, seek out a local training provider from the EPA site.

The EPA has said that they are making efforts to educate the public (and those who need to comply to the law) about the existence of the law, however they also pass that task onto the training providers.

I am a contractor as well, and when I took my training last year, I was surprised how many contractors, like myself, did not know about the law, so I took the steps to help train & certify those that may need it. I do not enforce, just inform & train.

Once again, sorry if I scared anyone, but it was another contractor that first made me aware of the law, and why should I not do the same in return?