All Forum Posts by: Marc Possoff

@Joe P.

Thanks for the reply. Actually the house cost $1and the complete reno cost $125k. So I have $125k mortgage on the property. Mortgage is $547 a month / 30 years.

So my expenses are monthly.

Mortgage $547

Property tax $84

Insurance $84

Vacancy $135(10%)

Repairs $65(5% a complete gut reno)

TOTAL : $915

I’ve talked to some renters on the block and most pay the water. The landlord sends them a bill and they pay it.

How much to add for a PM?

After doing some digging it’s suggested I get a cap rate #?

Conservatively can get $1200 a month rent. So we are looking at a $285 cash flow. From reading I take $285 cash flow + $547 mortgage x 12 = $9984. Then you’re suppose to divide that into cost of house.

Since I paid $1 for the house my cap rate is extremely high. But then it looks like I have to get a cash on cash figure. Which from the looks is $9984 / $125k(reno) = 8%.

This link is where I got the info just a little while ago.

https://www.biggerpockets.com/blog/real-estate-math

Current market rate for this house since it’s a 2 bedroom and 1 1/2 baths is in the $200k- $225k range conservative. There are 2 houses developed from the ground up on the same block that are 3 stories. And a lot of other spotty development and reno’s in Grays Ferry. I can imagine that in about 2 years my house could be go for $300k with the way GF is being developed. And / or higher rental rates.

As far as property / real estate taxes the house is under an ‘old resident’ program so yes taxes will go up but not at the rate as a new owner would. Actually taxes on the house are less than $1,000 a year.

I do own an empty lot around the corner, 14x51 which I’m going to sit on for a while.

@Joseph Pietrzak

Tentant will pay gas, electric and water. Sewer and trash is already including with taxes and water. I will self manage property. I plan to inspect property once a month.

The property is located in Grays Ferry Phildelphia.

The $2500 a year would include expenses down the road and operating expenses.

When you say operating expenses can you give an example? Like I said the $2500 a year included expenses. For instance let’s say tenant moves the $2500 a year stacking will include getting rental ready for next tenant. Also the $2500 stacking will include expenses down the road like a new roof but I don’t expect a new roof for another 15 years since there’s a brand new roof already.

House is almost ready for rent. I have 1 house now but wondering if my #’s are right. 

House was 110% completely renovated from top to bottom side to side and a new roof. House is a 2 bedroom 840 sq ft  

Potential rent $13,750($1250 a month rent with 1 month vacancy per year, so getting 11 months rent per year)

Taxes $1000

Insurance $1000

Expenses $2500( keep stacking for potential expenses) 

Total income from rent $13,750

Total expenses $4500( taxes, insurance, expense account

$13,750(11 months rental income) - $4,500 = $9250 revenue?

I know there’s going to be fed income tax but I’m hoping that that can be offset with the $2500 expenses as sort of write offs. 

 Thanks! Ok so it depends on tenants in relation to the voucher. 

Now when it’s say my property is $1341 / month is that pretty much the total rent I’ll get from PHA and the tenent?

What makes PHA inspections difficult recently? Our property was a complete full gut. Thanks again!

Hi have newly renovated house in Grays Ferry area of Philadelphia. 2 bedroom which looks to be in the green zone.

According to this it’s the green zone @ $1341 / month.

http://www.pha.phila.gov/media/178250/hcv_voucher_briefing_guidebook_2020_3_sheet.pdf

I general let’s say the rent is $1341 / month how much will be received from the program and how much from the tenant?

This is a start on asking thanks!

I have 2 properties in Grays Ferry. They are both 2 bedrooms, 1 1/2 baths and completely renovated. I rent for $1350 each. 

At $400k new construction you’re over paying like $150k+ like Joe P said. 

Like Joe P said it’s block time block currently. You’ll see a house or 2 on a block either new construction or renovated pretty much on a consistent basis. Which is a sign that Grays Ferry is the new hotspot. 

All you have to do is drive around Grays Ferry and you’ll see construction and renovation going on. 

Thanks! What’s a sales contract? I don’t think he has one yet as he started the process with a lawyer. The lawyer after doing investigation says there is no deed that’s in no other name but his mothers according to records and the original deed. The lawyer said there’s no other liens on the property except taxes which the lawyer said he’ll have to pay back taxes 20 years and most likely will get the interest and other penalties waived. The lawyer said the priority is yours(cousin) legally. 

I told my cousin to ask about the to tile. The lawyer said when the property is legally yours it will be legally yours and you won’t need a title unless you sell it. 

Cousin talked to his lawyer today. Lawyer said the property is yours and you have the title. The only issue that can come up is if you sell it. But if you’re going to build on it different story.

Yea there’s a whole block of empty lots on S Dover St in Grays Ferry that someone was able to grab for $1 a lot  

Hi my cousin was getting calls from investors wanted to buy a vacant lot and the investors said it’s going to sheriff sale. My cousin thought he was being scammed because he said to these investors that his mom didn’t own a lot. Anyway after many calls he decided to investigate it. There was someone else name on the deed according to records which the person was trying to claim but after getting a lawyer the lot was actually his moms in 1961 from her first marriage. It turns out that the person on the deed was committing deed fraud. Lawyer got the original deed and his moms first marriage name is on it with no other name after. Lawyer said deed fraud is common. Anyway there’s back taxes to be paid for 10 years and some other stuff but the lawyer said this will be easy to make a deal with the panel. The lawyer checked if there is anything else owned in the lot but there’s nothing. There’s a tentative agreement of $7k back taxes for 10 years and $6k for the lawyer representing the city and a transfer tax. So it looks like $15k net the lawyer said.

I had my cousin ask the lawyer if there are any demolition costs involved because there was a house there at one time. Lawyer said no demolition costs.

He would like to develop on this lot. I’m wondering why there isn’t any house there. But like I said as far as the city knows it’s an empty lot and it’s my cousins from an ‘inheritance’.

I’m playing devils advocate. When he starts to develop the lot what things can pop up since there was once a house there? Or shouldn’t worry about it?

Thanks!