All Forum Posts by: Rich O'Neill

@Jennifer T. that is a tough question! 

Philadelphia is a VERY tenant friendly city, so that is the part that would scare me. 

Is there any more background on the tenants? Have they been paying until recently? Do they have decent credit?

If I was you, I would have a lawyer draft a strong letter explaining what they are risking by going to court (credit, chances at getting another place, eviction record, etc), but then offering them the cash to leave and avoid the headache. Carrot and Stick. 

I am sure there are others here who have dealt with this more than I have, but I would prepare for a fight. 

@Sean Parno, welcome aboard. PLEASE- do not be another one of those rookies that talks about it forever and never does anything. It is important to learn as much as you can, but just know you will never learn everything. Don't fall into the trap of analysis paralysis. 

There are some excellent people on here who can help you with any challenges you face (and you will face them). 

I wish nothing but the best for you! If I can help, please feel free to reach out! 

@Eric Greenberg that kind of surprises me actually. Did you try to fight that at all or get an explanation?

@Dave Polykoff a 3 unit is usually still appraised using comparables. Most of the time appraisers will start using a cap rate on a 5+ unit building. 

That being said, I don't think an appraiser will put much weight on outdoor amenities. Appraisers need metrics to adjust their values based on. Think adding sqft, or a new half bath, something with a number. A few benches out back or a paver patio doesn't give them a whole lot to work with. 

Very cool stuff @David Krulac, how did you find the land? Was the land development portion difficult? How about zoning/approvals? 

I am going to relisten to your podcast episode tonight (been a while), so ignore any of those you cover in the show, but I really appreciate the response! 

@Joe Fordahl I agree that property management is not rocket science, but it is hard, low margin, thankless, and can get tricky. This might be an excellent place to partner with a seasoned investor who can help with the real estate/property management specific aspect of the business, while you use your experience to refine, systematize, and grow the operations aspect of the business. 

@Steve Babiak is right, I managed my own 20 properties for 3 years before I went to a professional. I must have interviewed 10 firms and did tryouts with 3 of them before I settled on the one I am with today. It was always a red flag when they could not honestly tell me that they had their own properties and experience on the ownership side. 

Has anyone in Southeastern PA ever built a multifamily property using modular construction? I do a lot of work on existing properties and I am fascinated by the build-to-rent model, and even more fascinated by the modular construction process. 

Would love to connect with anyone in Philadelphia, Chester, Montgomery, or Delaware Counties who have made this work. 

100% agree with @Eric Greenberg. The fact that it is there is plenty for college kids. If it were a high end rental in Fishtown I would probably change that answer a little bit, but for this case I would leave it bare. Clean and private is the only part I would spend money on. 

@Phillip Repalone The only product I am aware of that allows you to put down less than 20% on multi family properties is FHA owner occupied loans.

To expand on @Benjamin Aaker's point, Credit Unions specifically are less likely to sell off loans, meaning they are less likely to need to comply with Fannie/Freddie guidelines. This means they can get more creative in their financing since they are trying to fill the credit union's appetite for loans, whatever that appetite is. It also varies from CU to CU, so just because one says no, doesn't mean another won't. 

I have had a good experience with Philadelphia Federal Credit Union on their commercial side. I think they would be a good place to look. I have also heard good things about Franklin Mint Federal Credit Union. 

Last point, I have never heard of a bank or FHA checking up on the owner occupied status of the property. Do what you want with that idea.

Hey @Joel Grier, best of luck to you! Another Philly area investor here, so I am happy to help however I can.