Philadelphia Kensington Area Flip Project

[Courtney Benson]

Investment Info:

Small multi-family (2-4 units) fix & flip investment in Philadelphia.

Purchase price: $70,000
Cash invested: $85,000

In the middle of the rehab. Plans for use-change of entire property was approved. Converting a two-story row-home into a duplex. This leads to double the rental income, or a house-hack for the buyer.

What made you interested in investing in this type of deal?

Firm believer in David Greene's philosophy on creating deals and opportunity. Property is in a RM-1 Multi-family zone, so why not convert it into a duplex? Just made sense to me.

How did you find this deal and how did you negotiate it?

Found this on the MLS. It was on the market for a little over 3 months, so I offered $13k less than listing price. The property, also, had a couple violations (non structural). Both of those factors helped with my offer being accepted.

How did you finance this deal?

Line of Credit, and a couple loans.

How did you add value to the deal?

Hired an architect to draw-up prints and turn it into a duplex. We added a kitchen and bathroom. Also, re-did the concrete in the backyard, and put-up a privacy fence. Then, changed the electric from 100 amp to 200 Amp. Then, Installed separate meters. Added separate supply lines so there will be stackable washer and dryers in both units. Lastly, central ac for both units.

What was the outcome?

Done in two weeks, so i will let you know. Glad we're in a seller's market.

Lessons learned? Challenges?

Just because the city of Philadelphia has a property listed in their records as multi-family, that doesn't mean the city recognizes the property as such. Make sure the Use Occupancy Permit is approved, and the prints on record match that permit. You can call Philly L&i to verify that.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Arco Settlements was the closing company, they were very good.

[Od Ntuk]

@Courtney Benson Can you discuss the difference in rent income vs keeping it a single family. This is something I’m curious about because it is not ideal with every situation. With a multi it is better to have a management company where with a single it is easier to self manage. With a single tenants can be asked to pay all the utilities. With a multi you have to pay for common space energy usage, and usually hear and water.