All Forum Posts by: Randall Justus

@Reed Vennel @Frank Avallone II, I went ahead with a similar approach.  He doesn't have any co-renters, only a son that will be there part time.  There was no other criminal activity in the  background check against him.  I did the following:

1) Spoke with him directly and he told me that he was a part of the union and that they were going to switch him to another position should he lose his license.  I told him that I would need to contact his employer, but I would wait until hearing back from him so that his employer doesn't get a bunch of calls in this regard.

2) After I received an email confirming that he wanted to rent the place, I verified his HR Employer contact, and then called.  She confirmed that he was employed and that they would switch him to another role if necessary.

I think that I will move forward with this tenant.

@Eric Greenberg property is located just south of Lehigh near Front and Cumberland. I'm asking $1600/month and has Central Air/ Modern Electric Appliances/near newly renovated park/close to subway. The timing was horrible when I started this so I used a Property Manager to lease the unit, but he only used the MLS and wanted too much money. Since I have taking on those responsibilities myself. I have it listed on Zillow/Apartments.com/Realtor.com/Facebook. I get the most responses with Facebook and Zillow, but many people just don't follow up, but I think that this is a common problem.

Hello BP Folks, I'm curious how more experienced landlords might handle this situation.  I have a Class B apartment that I am renting out in a Class C neighborhood (West Kensington of Philadelphia) that I have been having issues renting out.  I found one guy who is interested, has a 600 credit score, makes 3x the rent, and is a truck driver.  My issue is that the background check uncovered that he has a First Office DUI that he is supposed to go to his pretrial at just before his desired move in date.  When speaking to him about it he said that his company knows about it and is willing to move him to working in the cooler where he would actually get more OT.

I don't have any concern about the DUI, but a truck driver would likely lose their job (livelihood) and I'm not sure how I would go about verifying his statement.  Any advise experience would be appreciated.

I'm a veteran in Philadelphia looking to purchase a small multi-family home (owner occupy/house hack) for the first year to get started. I want this to be relevantly turnkey in order to get my feet wet and satisfy VA Funding. I have been looking into the numbers here for over a whole year now, but it doesn't seem to work.

Everything that I have read suggests that you should figure in 8-10% for property management, but every PM company wants 1 months rent + 8% (which I believe to be typical). When I factor in both the 8%/door monthly fee + 1 months rent (8.3% of the monthly rent, spread out over the course of the lease year), it equals 16.3%.

The other figures I am using are as follows:

Purchase price: $300K - $450K

Closing Costs: 5%

Insurance: Varies by deal

Property Taxes: Varies by deal

Gross Rent: Varies by deal

Vacancy: 8-10%

Maintenance Costs: 8-10%

Capex: 5%

Utilities: $0-$50/month, Varies by deal

My goals

1% Rule: A consideration, but not firm

2% Rule: Ha, not a chance here

50% Rule: A consideration, but not firm

CoC Return: 5%-8%

Cash Flow: $150/ month, total building not per door

Live in one unit: Live in one unit for a year, pay myself rent for education sake

My questions:

1) Why does BP and other sources suggest only 8-10%? Seems like that number is too low. I understand that you want to factor in PM as a potential exit strategy compared to self managing.

2) Am I over thinking this? I do this often so if I am, I would be curious how and why.

3) Is my overall approach of getting started incorrect? If so, I am open to any suggestions.

Many thanks in advance!!!

@Yong Wu

Would you also be willing to share your contractor with me as well too. Thanks in advance!

@Evelyn Castillo

A secured credit card works like this:

1) Apply to the secured credit card of choice. I applied through the mail, but you can also get them online I believe.

2) Pay a deposit on the credit card account, which secures the account. You will probably only be able to put down $200-500 for the deposit, which will be your credit limit. You may or may not have a annual fee and your interest rate may be sky high, but we are not talking about alot of money here in the grand scheme of things.

3) Buy small inexpensive things like gas and make regular payments.

Here's a link that I found that maybe helpful.

https://www.creditcards.com/secured/

@Evelyn Castillo

I'm not sure what your exact situation, ultimate goal, or timeline is; but I essentially bought credit. I did it two ways:

1) I got a 6 month personal loan from my credit union and calculated the interest. I took the loan money plus the money for the interest and threw it into a checking account to be automatically deducted. One the loan was paid I closed the account.

2) I got a secured credit card where you take like $300 and send it to the CC company. You then use the card for gas.

You want to have these accounts open for 6 months to build credit. Hope this helps!

@Sue K.

Here in Philly my realtor has said that they can't show homes now. Strange thing is that I still see homes being put on contract.

@Brooks Rembert

Have you heard anything new about this? I would love to do this in Philadelphia, but I am wondering if this is just too much red tape.

@Russell Brazil

Thanks for the information on the fees. I was told by a Real Estate Group in Philadelphia that it was worth it. I suppose that it depends on perspective.