All Forum Posts by: Kevin M.

Pros and cons to each. We typically advise owners to push as many utilities into the tenants name as possible. As @Jacob Sampson mentioned, this allows you to advertise the property at the lower number but still not be out-of-pocket for these costs. Make them take over electric, gas, internet. As a side benefit, if a service shuts off it's not your fault and the tenant needs to work with the provider to resolve.

Water typically has to remain in the name of the owner. If it's not separately metered by unit, owner should pay this entire bill and build the cost into rent. You can get into trouble if you split up water bills among tenants with no control over use. You also have to be careful about billing tenants for water use because there are strict laws regarding resale of utility services. Avoid this if possible. 

Sent you a connection request. 

@Max T. in retrospect yes I agree - but unfortunately that number just kept creeping up over time. A lot of sunk costs in the decision process and lessons learned

I would say it depends exactly how "multi" your multi-family apartment is. If you are doing something small like a 3 family unit, you don't need much of a team. I did my first with just;

Mortgage Broker- Step 1 is to determine your budget. Talk to a mortgage broker about your financing options. House-hack, conventional, commercial, cash-flow loans, etc. Get an idea of the possibilities, price range, and cost of capital. 

Agent- Once you know your spending power, talk to a local agent. In my experience there are a lot of good, professional agents out there. Your agent should communicate with you quickly, often, and outside of normal business hours. They should be MORE eager than you to find you the property of your dreams and bring you to closing (if the deal is right)

Inspector- You need an industry pro to pick your target apart. Find someone who specializes in multi-unit inspections. A good inspector can always find a list of deficiencies even if they are just general improvements. 

Title Company- This really takes the place of your lawyer. They make sure your title is clear and all the paperwork in order to officially transfer your property. They should also be responsive and customer-service oriented.

This is your core team, but as others have mentioned you can add to this if you have specific needs or aren't self-managing.

Best of luck

@Robert Palladino knows his stuff when it comes to zoning/permits. I will share a personal anecdote that caused some issues;

Client purchased an RM-1 property in 2017. Original construction permits were for a duplex (in 2011) but the builders made a triplex instead. 

Zoning was approved for three-family dwelling in 2013 (by right). In 2013, inspectors came out and issued a dozen violations against the property for the "extra" work done in excess of the duplex approved plans. L&I did nothing about these violations for 5 years and they remained open in the system. The third unit, however, was technically "illegal" until a FULL new set of permits was drawn to include blueprints/calcs, etc. This all fell into client's lap. Ended up costing around $70k to upgrade fire suppression system, fire alarm, new drawings/calcs, drywall work, etc. Just to legalize a the third 2BR unit... L&I was an absolute nightmare to work with. No one could explain the process/requirements and just finger-pointing to other departments. 

David- my wife is a commercial real estate attorney in Philly and I have worked with a few local brokers. I'll connect with you. 

Good luck

Maybe a lender can chime in for the specifics behind a physician loan, but the general rule of thumb is three-five years for purchasing. In other words, if you plan on residing in a home for at least three years it TYPICALLY makes more sense to buy. 

Remember what you're paying for when you rent; risk mitigation (cap ex/market downturn) and the ability to leave. You don't want to bet against the market, and if you are signing a new employment contract and you are confident you will be residing in your new home for a few years then you should probably buy. You will make out better financially in the longrun if you do your homework before closing.

A don't like when people say renting is "wasting money" because it's really not. You're just paying a premium to take on less risk and have more liquidity. If you don't need these two things-then buy.

@Dave Bopp my wife handles appeals for commercial and non-profit properties in Philly and has seen some success. I have not heard of anyone with a successful appeal on the residential side. Hopefully someone can chime in with a story that gives me hope in OPA and the City in general...

A lot of this depends on your personal skillset and goals. If you enjoy the management component and you're local, you should have no real problem handling 20 units on your own as long as you set up a good system.

Many investors, however, would rather focus on their careers outside of real estate or evaluating and acquiring new properties instead of dealing with maintenance issues, showings, late rent, property turnover, etc. If I can make $100/hour as a software engineer why would I spent my time coordinating an HVAC technician if my PM can do it for me for $50/hour? It's really about efficiency and scaling.

Also a good PM will be better than you at filling vacancies, evaluating tenants, regulatory compliance, and handiwork. **note this is only true for a GOOD PM!!** 

That being said- I ALWAYS recommend self-managing your first property. You will learn so much that you can carry forward for your entire real estate investing journey. 

@Dave Bopp I've appealed a few times with a ton of evidence as to why the city's valuation is incorrect. I've shown them 5 other properties on my block with larger lots with a lower valuation. Appeals denied. Every time. I ran into the mayor one day and told him about it and he shrugged his shoulders and said "better than it used to be".