All Forum Posts by: Rich O'Neill

Like Eric said, you should be able to cosign the loan but not your name individually. That would be odd. Even if you did an LLC the bank would still want any owner with more than 25% ownership to be a PG on the loan in most cases I have come across.

Check out PFCU for a lender (you have to come up with some way to "qualify for membership" by either living, working, or "doing business" in the city of Philadelphia. I never had to verify this though.)

For PM, check out @Kevin M. or RentWell. Not positive if either of them work in Chester, but I have good experience with both of them in other areas of SE PA. 

@Steve Babiak, that video is hilarious. Thanks for sharing. 

@Account Closed's post? It is fantastic. Really well done. 

I would expect to pay closer to $400-500k for a turn key 3-4 bed property in my definition of a B area. I consider B areas Manayunk, Point Breeze (eastern part of the neighborhood), South Philly (East of Broad), and the like. They are not Center City, Olde City, or Fishtown, but they are still pretty nice. 

There are several RE Agents on here that should be able to help. @Jimmy O'Connor gets some great off market deals but in my experience they aren't usually turn key. I think @John Knisely does work in the city but I have worked with him a fair amount in Delaware County. 

That's a tough question to answer as far as "Philly for cash flow". As you can see by Jimmy's market overview, that question changes dramatically neighborhood by neighborhood. Short answer, yes it absolutely exists in Philly, but you have to decide how much cash flow you are looking for and how much crap you are willing to deal with. 

@Account Closed said is that I have a hard time believing you can find a nice townhouse for $300k in a B area in Philly. You also need to make sure there is enough of a draw to that neighborhood to get STR demand.

If you want to test your theory, you could try an arbitrage model in one of the neighborhoods you're looking to invest in. Go to a long term rental listing and offer them $100/month more than their advertised price if they let you sublet to STR's. BE UPFRONT ABOUT THIS! Nobody wants to deal with a shady character. Don't hide this from the owner. It benefits everyone if you position it correctly. Owner gets $100/month extra, and a tenant that is getting the place professionally cleaned multiple times a week, and you get less exposure to lawmakers deciding they don't want STR's (BTW, Philly just passed an ordinance requiring operators to pay extra taxes and get a permit, which requires a business license and so on).

Once you get a place leased, you can furnish it and start renting it out. If the rent is $1600/month and your furniture really does only cost $5,000, you are only on the hook for $24,200 if you get 0 renters for the whole year, which is unlikely. If it goes gangbusters, you go buy in that neighborhood. If it doesn't work out, you lick your wounds and move on to another neighborhood or strategy. 

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• Passion for Possibilities- It is not “I can’t”, it’s “How can I?”
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As the company grows, we are looking to add several services, which would be further income generating opportunities for the right hire. Additional services in the pipeline include: property acquisition and disposition (wholesaling), real estate sales team (representing clients on purchases and sales), hard money lending, and property management referral.

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Some sample tasks associated with this role are:

• Prospecting
• Attending industry events
• Networking
• Job estimating
• Client education
• Data mining
• Direct marketing

Job performance will be based on a Job Scorecard, a sample of which will be supplied during the interview. Commission will also be tied directly to performance.

Some skills and traits we are looking for are:

• Charismatic
• Organized
• CRM training
• Thorough
• Not required, but bonus points awarded if you have Real estate investing experience
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To apply, click on the below Indeed link to be taken to the application page. We are looking forward to working with you. 

@Account Closed so does NYC but people love it there. Both are pretty big places and any city has rough areas, so you can’t pass that judgement on the whole city. You can pay $500/sqft in some parts of Philly, but you can pay $50/sqft in others. Just depends on what kind of market you are looking for. 

Side bar, Funny part is that those two places aren’t too far apart. 

@Steve Babiak I forgot about HAPCO. Thanks for adding that! 

Similar to what these smart gentlemen have mentioned above, it is basically a financial equation. What you are proposing is basically shifting debt from one asset to another, which will likely have a net total effect of costing you more money given the low rate on the duplex and the upfront costs of refinancing both properties. If the duplex is not cash flowing then that is a completely different issue and you should not try to prop up the numbers by shifting debt. That's just a mind game that you will lose. 

Like @Eric Greenberg said, if you are trying to put the equity in the townhouse to work, you basically have to make sure that whatever investment you put it in is earning a better return than the interest rate you are paying on the debt (factoring in the closing costs on the loan- DON'T IGNORE THIS) plus a reasonable margin. Say that is roughly 4% and you want to make at least a 2% margin on top of the interest (factoring in risk), can you make more than 6% in an ETF? Can you invest that in another property that will make more than 6% CoC return? Can you invest it in a syndication and earn the same (check into other qualifications here)?

This is the finance world's version of "Highest and Best Use". The goal is to maximize risk adjusted return on current assets. Since everyone's risk tolerance is different, there is no one way to calculate this simply, but think of the overall concept. 

People get 4 and 5 year degrees in this stuff, so don't worry if it is confusing. Hopefully this helps you figure out what the "highest and best use" of your capital is. Let me know if I can help with this any more! 

@Eliam Birnbaum, I think part of what @Jonathan Greene was getting at is to ask what your criteria is. If you don't know that specifically, anybody can answer and it will always fit the criteria of "interesting". 

Exactly what cash flow number are you looking for? Class of area(even though it's subjective)? Median area income? Metro area population? Any other amenities need to be in place (great schools as defined by X publication, proximity to top rated hospital, etc)? Historic population growth? Major development projects in the pipeline? X number of NARPM Certified property managers servicing the area?

These are all possible criteria points among hundreds of others. The more specific you can get on as many of these as possible, and then put them in order of importance, the more likely you are to find a market that fits your needs. 

@Account Closed's write up is outstanding. Definitely dig into that if you haven't already. 

Overall risks to consider, that I am sure are the same in many other cities, but worth noting. 

Everything is block by block. One block could be all new construction, and 2 blocks over will be littered with crack houses. It's fascinating to see in person. 

The city L&I is a disaster. Getting permits can be a nightmare, and the sentiment in government seems to be leaning more and more towards anti-development. Sound's counterproductive to me, but that's a different conversation. Light rehab's (no major structural changes or additions. Full gut and rehabs fall under this level as long as none of the former is done) are manageable with permits though. 

Dumpsters are almost a non-starter. Generally we use "haul out" crews to come at the end of the day and load a truck with garbage to take to the dump. Obviously this is more expensive, so expect demo costs to be higher. 

Lots of contractors don't like to work in the city because they require a separate license with higher insurance requirements than the state, so the cost of doing business is higher. They also get taxed additionally on any income they generate within the city. It is also much more work when you have to park a block away and lug all of your tools on and off the job every day. All of this means that the costs of rehabs are usually higher in the city. 

All of that being said, from an investor's standpoint, Philadelphia is one of the lowest priced major cities in the Northeast, it has easy access to other major cities and industry hubs (NYC and DC), amenities are amazing (access to hospitals, beaches, parks, rivers, museums, restaurants, etc.) and the market is booming (Expats from NYC and other high priced cities). 

Best of luck and let me know if we can help at all! 

@James Back I am not in OH, I am in Philadelphia area, but I use the HD consumer card quite a bit for the 0% financing. Depending on the scope of the work, 6 months can be tight though, and make sure you pay it within the promo period because otherwise they charge you all of the interest back to the purchase date. 

Keep an eye out for their offers. They often do 12 or even 24 month financing. You can always ask them at the pro desk about that as well. 

Make sure you sign up for pro xtra. They do give some every day discounts and if you buy quite a bit they start giving you gift cards. If you are a member of NREIA, make sure you attach your membership to the pro xtra account. Theoretically you get a 2% rebate gift card twice a year, though I find that very inconsistent and I often have to ask for the rebate card. 

If you are a pro member, you can go to the pro desk and ask them to put your order through the "bid room". Not positive what the calculation is but sometimes you can save a few hundred dollars. Minimum order for the bid room is $1500 last I checked. You can add to the same "bid" for the the next 7 days after you open it. I believe that the bigger your total "bid" is the more discounts they will extend you, so it benefits you to buy as much of your materials as possible at the beginning of the job. 

Combine the bid room with your 0% financing and you can get a nice discount on materials and not pay for them until the job is done. 

I wish more supply houses were able to use programs like this, because I would much rather buy from them, but the programs above make it almost silly not to buy from HD. Combine that with the online access to receipts and everything and it takes out a lot of the headaches. HD has gotten it pretty well figured out.