All Forum Posts by: Ethan Giller

@George Beatty, your best bet is probably to do an Excel export and analyze the data from the spreadsheet generated.

https://help.podio.com/hc/en-us/articles/201019668-Exporting-to-Excel

@Dewain J., for better or for worse, it is standard practice in Philadelphia that PWD charges the owner $195 for a water meter replacement.

If you want to avoid this issue next time, make sure to ask the title company prior to closing if the water bills are actual or if they are estimated. If they are estimated, then it's likely the meter needs to be replaced and that would generally be at the seller's expense (either prior to closing or else as a credit on the HUD), and the title company can also escrow funds in order to pay off any back billing (or you can wait 1-2 months to close until the meter is replaced and the next bill comes out using actual readings). Check your closing docs, the title company likely made you sign an affidavit stating that the water bill is estimated and they don't have any liability. If not, you can try to put in a title claim but this is an uphill battle and probably not worth your time and effort for that amount of money.

@Abdul Azeez, I think that the problem is that you are stacking the deck against yourself trying to do all of these things on your first deal:

1) Purchasing the property from an online auction site / bank, which is notoriously tricky even for the experienced investor, due to their proprietary contracts and minimal due diligence period and strict deadlines.

2) Working with a new contractor that you haven't used before, or seen their work before, and who may not be used to dealing with investors.

3) Trying to get conventional financing on a property that has a short closing time and where the mechanical systems cannot be tested.

4) Working on your first deal by yourself instead of partnering with a local investor who can guide you along, or at least a mentor who you can turn to with questions.

My advice is to make it easier on yourself by considering buying a property with a standard contract and longer due diligence period, network with local investors who can provide you contractor contacts and also some guidance, and consider using private financing or hard money instead of bank financing.

In my opinion, buying from the online auction sites is a more advanced strategy that you can use once you are able to ballpark construction costs yourself and/or you have a trusted contractor you've worked with before and/or you have private financing or hard money set up so you can close fast and/or you can purchase the property without interior access and hope to get lucky in terms of condition (but still buy at a price where you are comfortable doing a full rehab if necessary without losing much money) and/or you are familiar with agreement of sale contracts and closings in your state so you can assess the risks of using the bank's seller-friendly contract.

You're already doing the right things by asking questions on this forum, and taking action.  Good luck!

@Elijah Tawwad, by "tenant placement" do you mean marketing rental units and finding/screening tenants for the property owners?  In PA this is an activity that requires a real estate license and supervision of a real estate broker.  Most often, owners are interested in hiring someone who can place the tenant for them and also provide ongoing property management.  So if you're interested in placing tenants then your best bet is to get your agent's license and then find a broker or property management company you can work with.  If you provide tenant placement services without being licensed then you're exposing yourself to legal liability.

@Kyle Smith, I've personally never heard of this document being used or recorded in Philly.  What are you trying to use it for?  To show evidence that the property is under contract with the owner for a property you're looking to assign, or something else?  Typically agreements are not recorded, if the owner breaches a sale contract then you would just file a lis pendens to prevent the sale to anyone else if you thought it was worth the time and expense of fighting it in court.

@Nathan J. I have some properties there, my impression is that it's a solid C area... I don't consider it a war zone but I don't think it's likely to gentrify in the immediate future.  Just my personal opinion and others with more knowledge could prove my wrong, but I would say that you should buy if the rental numbers make sense based on current conditions and don't expect much appreciation.

Agree with @Account Closed.

Some additional information based on my experiences:

-If the zoning code is RM1 then you should be able to do a triplex by right and don't need a variance.  If it's RSA3 or RSA5 then you will need a variance (RCO meeting and ZBA hearing).  The RCO is a community hearing that happens first and the community makes a recommendation to the ZBA board but ultimately it's up to the ZBA to decide.

-If you are holding the property in an LLC then you are required to have an attorney, otherwise you can do it yourself. An attorney is still recommended though. Attorney fees depend on who you use and how you set it up (hourly or flat fee, if you want them at the RCO meeting with you or not, how much push back there is from the community, etc.). Budget $1K for a simple case and $5K+ for a complicated one. Average cost is probably $1.5-3K for attorney fees.

-You generally need plans showing proposed use.  These don't need to be architecturally-stamped so you can have a draftsman do it but you will likely need architectural plans for the permits if you get approval so it's often better to get architect involved early on.  Again this varies but budget a few hundred for draftsman or a few thousand for architectural.  More if you need MEP prints as well but try to find an architect who can include this in the price.  More if you need structural prints.

-If you are going from single family zoning to 3-unit you need to comply with all new construction codes, including fire codes (sprinkler system).  Usually the inspector will allow no sprinkler system if you are going from single family to 2 units (unlike new construction 2 unit which does need a sprinkler) but this is somewhat case-by-case.

-Some RCOs and areas are much easier to get multi-family through and some are very opposed to it.  If you're not sure about the mood of the area you can reach out to the heads of the RCOs before you purchase the property and see if you think your project would be supported.

Alex, no offense, but that's like asking what's the average price for a car. There is such a wide range that any answer about the "average price" is going to be vague enough to be useless. J Scott has a great book available on this site for estimating rehab costs. 

Helen, welcome to BP.  Your question seems straight forward but it's actually very hard to give a useful answer, even just a ballpark, without being misleading.  So much depends on the specifics... what permits you pull, what type of contractors you use (all licensed & insured, handymen, hands-on GC or hands-off GC), what you mean by gut rehab (just new kitchens & bathrooms? down to the studs? down to the joists?), what other work you're doing (new roof? new windows? new HVAC? all new electrical/plumbing?), exact size of the house (since some costs don't vary linearly with sq ft size such as cost of roof, heater), what level of low-end finishes (i.e. is flooring just painting the old hardwood? carpet? laminate? vinyl? tile?).  All of these issues can cause your price to range from $5/sq ft for basic paint and carpet to almost $100/sq ft for professional contractors and structural issues and more durable finishes.  So if you are looking for a ballpark figure, go with $50/sq ft but that's nothing more than a gamble.

Best bet is to get a copy of J Scott's book on estimating rehab costs:

http://get.biggerpockets.com/flippingbook/

Yes, in Philadelphia you'll need a Commercial Activity License (free), and a housing inspection (rental) license ($50/unit/year).

https://business.phila.gov/commercial-activity-lic...

You'll have to discuss with your CPA/tax preparer your specific tax situation.  But in general, any expense that is directly related to your rental business can be deducted from your federal and state returns, which would include local taxes.  You would just report the rental activity on a Schedule E.