All Forum Posts by: Abel Rodriguez

 I agree 650 is low but the area has fully renovated 1 bedroom units going for 800 so I do not know if I can raise them. If I were to raise them how much total rent would i need to collect at asking price to for it to make sense?

Roof is new within 1 year as I have been told but I have not inspected it. Those questions about when the last rent raise was I should certainly ask. I believe they were not updated but rather repaired over the years. I do not have specific but would imagine if they were relatively newly renovated it would have come up. I will gather this soon. Thanks.

@Steve Firth 

@Steve Babiak

Thanks for the tip. I will add it to my assumptions. I guess this is just one of the few things I missed. Reason why its great to talk to experienced investors like you.

I am sold on your comments I will not split the water bill. One thing that came up earlier in the thread but I am still uncertain about is the trash collection cost. I have lived in philly for a long time and have never seen this. Does anyone know if this is a real expense within the Philadelphia municipality?

 My first thought would be to pay it and investigate quickly the potential cause. Try to get a fix in quick and have it go back to normal. I would like to know if I can levy this bill to the tenants. Can I charge the bill split evenly? I do admit I see rental listings and most if not all include water. I also do not see anything in the landlord handbook saying I can not charge a fee or atleast have a provision for excessive use. 

The neighborhood is Tacony in the lower northeast but close to bridges. Any insights to the neighborhood you can share would be greatly appreciated. Thanks.

Steve that makes alot of sense to take into account my current rent. I pay 1200 now and would definitely see savings if I moved. The odd thing would be that if all goes as planned I would buy another property and move out so for the longer period it would not be owner occupied. Does that make sense why I only look at the numbers as of I did not live there? If the case is that I focus more so on the time that I am occupying the property then I should definitely move since I am spending 1200 a month now in rent. 

Thanks Steve. Also on the water bit cant you just charge your tenants 30 dollars fixed? Is that allowed in Philly?

Joe very well put. I will change the assumptions and right away can tell it looks much less enticing.

Property management to 10% 

Repairs to 5%

CapEx to 10%

Vacancy to 8.3% approx 1 month per year

Added flat 150 per month for water but I wonder If I can charge 50 a month flat fee to Tennants or some average of years prior.

With that I am now looking at losing about 250 a month on the deal. Which is easy to say no and walk away to. If I can get it for 280k it looks like I break even. I do not see anything close to a comp that would justify 280k does it just not work to cash flow in this area? Should I consider increasing the rents a ton if I do get this property or others?

Joe you made great suggestions really looks like I missed some key factors. I am not married to the property but given that what already seemed to me like finding a needle in a hay stack just got harder.

Thanks Joe!

Thanks Neal exactly the insight I was looking for. 55 per year is something I did not think about at all. The trash is interesting I had not heard of this for people I know who own their home in Philly is it different for a multi family? Also water is not split but I was thinking of billing the average of the prior year split between Tennants is this not allowed in Philadelphia?

Lastly if I add these costs is it something I can offer less on and create more room? How much room would make you comfortable?

Thanks again Neal these are just the things I was fearful of missing.

Hello BP!

I am looking to get into a deal but do not know if I am missing something or worse am moving too slowly on a potential bargain in Philadelphia. A friend is thinking of selling their Quadplex and I heard it could be as low as 325k.

I want to owner occupy a multifamily and thought this might work.

325k Quadplex in an awful school district but low crime lower North East section of Philadelphia

Income:

Unit A: 1 Bedroom $700 (Unoccupied) Currently Under Renovation

Unit B: 1 Bedroom $650 (Occupied)

Unit C: 1 Bedroom $650 (Occupied)

Unit D: 1 Bedroom Efficiency $500 (Occupied)

Detached Garage A: $150 (Unoccupied)

Detached Garage B: $150 (Unoccupied)

Total $2800

Expenses:

1.4% tax on 200k assessed value: $2800/yr -> $233

5% Vacancy -> $140

3% Repairs -> $84

7% Cap Ex -> $196 (Older Property built ~1930)

5% Prop Mng -> $140

Insurance -> $135

FHA Mortagage -> $1,368

MIP -> $230

Total: $2,526

Cash Flow: $274

CoC Return: 12%

I would love to hear any comments, warnings, or questions I should ask the owner.

I am unsure if I am looking at the whole picture? Is there a better way to estimate costs like repairs or Cap ex instead of a percent of rent that seems arbitrary to me?

Any and all insight is appreciated thank you BP you are an awesome community!