All Forum Posts by: Sung Park

@Michael Trabert Not sure how abundant MFs in areas you are interested in investing/living in but for me, the MFs that come up where I'd want to live/invest are rare and even rarer at a decent price so it's slim picking regardless of how many units. Whether a 2,3,4 unit, it is really a matter of personal preference, your budget, and the local inventory. The more units, the more likely it may cashflow when all units are rented out but not always. Based on your question though, don't get catch up in how much it will cashflow while you live there because most househackers don't cashflow on the MF they occupy. What matters most is the money saved on housing expense, the low downpayment and great mortgage rate for an MF due to owner occupancy advantage, and learning to property manage. It should definitely cashflow once you leave and all units are rented out based on current rents, not hypothetical rent appreciation in some distant future.

1) Just north of 300K. About the same price as DC home but i now live 15 minutes drive to downtown whereas DC home was 1-1.5 hours to downtown, huge difference. 2) total approx 2K sq ft. 3) I wanted quality tenants since I self-manage.

@Maira Molina There's no "business license," in a generic sense like a medical license or a CPA license or bar license (i.e. lawyers or booze), required to start in real estate investing. You buy a property and rent it out. Before you rent though, you most likely need to apply and get a rental license and sometimes a business license and meet other requirements from your local city/town/municipal/county government to operate the rental property legally. Once you have a rental property, with the intention of operating a rental business, ready to rent and be in service, then you can start deducting business related expenses based on IRS rules as Amanda and Matthew mention.

@Joel Cruz Not sure what you mean by credit limit. If your credit score is solid, you got a W-2 income stream, and you have the downpayment + additional funds to close another property, go for it. You don't need to double your income to get another mortgage cuz your rental income should offset the debt payment. The better lenders will take the actual and/or forecasted/appraised rental income from ur current property and apply it to your DTI at around a 75% rate. If the total rental income at 75% will cover the PITI, then you only need to be concerned with what your w-2 income can afford, assuming you have no other debt.

@Lana Lee That's awful. Maybe there will come a day when the city will transfer title to your tenant and not notify you about that either...

@Joseph ODonovan Agreed, anti-landlord seems right on. I come to biggerpockets to remind me not to buy anything in Philly. 

@Rowan Ledbetter I moved my family from DC to Philly last year. We wanted to immediately buy and buy specifically a house hack to reduce living expenses so we worked with an agent long distance. I was looking at the MLS daily for a few months. A MF came up and we put an offer in. It was in a nice safe neighborhood, great school district for my kids, and close to major roads. We were very fortunate to have gotten it and super happy about how much less we pay for housing, not living for free but still a great deal. Given the housing market in general, MF inventory is slim so make sure you prioritize what's most important to you and your family for the next house. You probably can't get everything you want like sq footage or amenities for a particular location or school district. Consider the trade-offs and best of luck.

@Robert Howard @Caleb Heimsoth 

Actually, origination fees and any costs associated with the loan are added to the loan cost basis and amortized, not added to the property basis.

http://www.therealestatecpa.com/2016/05/22/ultimat...

I just closed on a property. Origination fee was $900 before points. Fortunately for me, the lender dropped the fee cuz he missed settlement. My other property was around $900 also. There's a whole list of ways lenders itemize this cost on the closing disclosure, underwriting fee, origination fee, processing fee, application fee, etc. As long as they add up to around $900 or less, I accept it.

@Bill Caraker I'd agree with @Chris K., PA the state feels like it leans towards landlord friendliness but the city of Philly leans more towards tenant friendliness. Two examples:

1) In Lower Merion Township just outside Philly boundary, it was pretty easy to get a rental license. As simple as getting a business license and the rental license after a quick in-person inspection. I looked at getting a rental in Philly and the list of things a property owner has to do to get a license is depressing. Business license, U&I, suitability certification, lead certification, etc.

2) Philly landlords are highly recommend to join PGWorks so that tenant's unpaid gas bill does not put a lien on his/her property. You also face water liens too. Both gas and water bills (but not sewage) follow the tenant in Lower Merion. One less headache to deal with.

Bonus: From a tax perspective, I prefer the higher annual tax bill outside Philly to the higher one-time transfer tax inside Philly since I can immediately deduct those as oppose to transfer taxes which add to the basis. Of course, property needs to cashflow with the higher tax bill.

Just to follow-up on this post, I found eversign. Free each month for 5 documents as in I can do five separate signature transactions. It works just like docusign without the cost.