All Forum Posts by: Nick Schmid

@Jeff Copeland I’m sorry the appraisal came in @ $335k

Currently under contract for $370k no seller assistance. Original Asking price was $356k. The property was last purchased for $310K in 2017 by the seller. 

I am seeking feedback & suggestions on how to best Re-negotiate this deal for the best outcome, being not over paying for a property & optimizing cash flow.

Currently one of the units is rented for $1550/mo. The home inspection did not reveal any huge surprises but I am estimating roughly $13,500 for repairs & updates.

The second report is my attempt at a counter offer. 

I realize this deal may not seem too exciting at first glance but if my calculations are correct I should be able to pay down enough in less than two years to get rid of my PMI & cashflow for $468/mo allowing me to utilize a second FHA loan keeping this as a hold investment. All feedback is welcomed, bring your best ideas.

Current Offer

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*This link comes directly from our calculators, based on information input by the member who posted.

My Renegotiation Offer Attempt

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*This link comes directly from our calculators, based on information input by the member who posted.

Brief follow up on response from contractor regarding some aspects of this potential project. The following are the most accurate estimates my contractor was able to provide. Complete demolition cost $30-$40K. Cost to build 4 new Units $200/sf. Quote for roof deck $10-$15K. Cost for Architectural plans $15K. Length of time for all necessary permits 3-6 months. I feel confident my numbers & projected rental rates were accurate. Knowing what I know it seems like it is still a good deal for someone who is able to ride out the long renovation process. The search continues, I appreciate the feedback & insight. 

I appreciate all of the feedback and insight. @Jaysen Medhurst you bring up a lot of good points. The property currently has 3 separate water & electric meters. @Troy Sheets I did not know about the two stairwells that is an interesting point and that amount of time for plans and construction seems to push the limits of what is allowable with a 203k loan yet alone what I could afford to pay per month without rental income.  @Austin Haley @Mayer M. Per the Philadelphia Property records website & a phone call to the zoning office it is currently Zoned RM-1 with a Land Area of 1440 (SQFT)  and an Improvement Area of 3099 (SQFT).  I'm currently waiting to hear back form my contractor regarding some of these specific questions I will be sure to let you know how this plays out. Thanks all. 

I have spent considerable time looking at this ambitious deal. It is fairly complex, especially for a first time house hack investment. I want to know what I am not taking into consideration & what questions other experienced investors would be asking. My hope would be to refi to a conventional loan & drop the PMI after roughly 3.5 years when I calculated I would have 20% of the loan paid down. (correct me if I'm wrong with any of these numbers)

There are several challenges with this deal & property as well as a few unknown variables which I will address. It is currently a corner triplex row home that is metered with separate water & electric & qualifies for a 10 year tax abatement. There is significant structural damage that leads me to believe a complete demolition & rebuild would be the best way to approach. I know this is possible with a 203k as long as there is a pre-existing foundation. My hope would be to transform it into a 4 story, each of the 4 units having 2 Beds & 2 Baths & a common access to a roof deck area. 

Here are the Big unknowns as of now. 

- Cost of a complete demolition & debris removal. (In Philadelphia I have found some estimates to be roughly 10k-15k) this would be rolled into the mortgage & obviously known before hand. (waiting to hear back from my 203k contractor on this)

- Cost of Architectural plans (estimating roughly $10,000) separate from analysis. This will allow my FHA consultant to dictated must have components.

- Approval of permits & blueprints as well as the time it will take for them to be approved. 

This is my biggest concern, the time it will take for the City to approve the necessary permits & complete required inspections. There are no guarantees as to how long each of the needed items will take & I can only sustain for so long with the monthly payments while it is an active construction zone & not being rented out. 

Things to consider, I will be house hacking the deal living in a unit for at least a year & even though I have allocated 10% for Property management fees I will be the PM for the meantime.  This all means I will be cash flowing $273 a month while I live at the property. 

BP community is rich with knowledge & insight I welcome feedback & questions. This is the 25th multifamily property I have walked through & the 60th property I have seriously analyzed since I have started my journey. If pulling off something like this was easy everyone would be doing it, I'm set in my ways to take a different approach towards my ideal freedom.  Thanks for the help!

View report

*This link comes directly from our calculators, based on information input by the member who posted.

I am currently seeking a 1-4 unit multi family property in Philadelphia. I have been analyzing many properties to find one that fits my criteria. I am finding there are some expenses associated with being a landlord in Philadelphia that may not apply to other locations.  Some of those expenses being a Rental License $50 per unit annually, Fire Alarm License/ Certification $225 plus monthly monitoring fees, Certificate of Rental Suitability $25, Business Privilege License $300 per entity. 

Correct me if I am mistaken on the fees I have discussed. What other expenses are Philadelphia Landlords paying that would be helpful to know when analyzing potential deals?  

Hello BP community, 

I am new to investing but I have substantial experience as a Renter of houses & apartments from coast to coast.  I had the opportunity to live in some of the best cities across the country as a travel nurse. I entered the world of Real Estate long before I ever heard the term House Hacking. I saw an opportunity to rent out an extra bedroom on Airbnb in Charleston, SC. I learned a significant amount during my time house hacking including the importance of Location, Communication, Tax benefits, & Recognizing opportunity. 

I am currently looking for a property in Lancaster City & Philadelphia PA. I am open minded to all opportunities & suggestions however I believe the best way for me to become an investor is by house hacking a Multifamily financed with an FHA loan possibly utilizing 203k to build in some equity. I am ready to take on the challenges ahead and I realize the power of forming mutually beneficial relationships with industry professionals.

I am always open to feedback & suggestions please feel free to speak your mind to me. 

• Currently seeking 1-4 Unit multifamily property in Philadelphia or Lancaster PA to house hack & cash flow. 
• If anyone can recommend an Investor friendly RE agent in Philadelphia or Lancaster I would be grateful for references.  
• If anyone can recommend Lenders & Contractors familiar & experienced with 203K Process I would also be grateful. 

I look forward to the Hustle & Grind ahead and wish you all success in your 2019 Goals. If anyone in Philly or Lancaster would like to discuss real estate or add some value to one another's networks feel free to reach out. All the Best.