All Forum Posts by: Alan Asriants

Insurance changes are impacting our market and returns more and more. 

Most insurance companies are leaving state by state and stopping to offer landlord insurance all together. 

Insurance is getting more and more expensive with renewals doubling or even tripling in some cases.

Insurance companies will issue notices to quit if they see stains on your roof from google earth. 

Its truly crazy. 

I am even hearing from insurance agents that insurance companies don't even want to insure homes 75 years or older.

 You can always call up the title company beforehand to get an idea if they charge any sort of settlement, recording, doc prep, etc fees.

As for the Seller side, the buyer chooses the title company 95% of the time, unless seller just recommends one. Seller really shouldnt be paying any fees to title company unless they did their conveyancing (ordering U&O, tax and sewer certs etc.). They sometimes charge the seller notary and doc prep fees - especially if you don't plan on attending settlement and do a deed package. And we are talking about $50-200 bucks

 This is a great explanation of the market.

I will add to the City of Neighborhood parts; that the market can be so drastically different less than a mile apart.

Point breeze is struggling, while Fitler Square is a fast paced market. Even though they could be walking distance apart.

There is a lot of construction happening near the area that Stuart mentioned and that is certainly affecting values and rental metrics. 

Personally I think the Suburbs of Philadelphia is a stronger market with less hoops to jump through, strong rental demand, and a great pool of tenant applicants. (Of course not every part of the suburb - but just generalizing)

Doesn't mean there aren't solid spots in Philly to invest in like: Upper NE Phila and part of NW Phila. Its all about knowing your neighborhoods!

You should never invest in an area you know nothing about or at least have someone you know and trust who can guide you there. 

I know nothing about Ohio, so I dont plan on buying anything there. 

I have a close buddy who lives in LA, I would likely trust his judgement if it came down to it - but I would still get to know the area more.

I dont think you are ready to invest out of state if you havent invested yet in yours. And being from Phila, there are plenty of solid and reasonably affordable areas to invest in. if you're open to it, feel free to reach out and we can talk more about this topic and the local market. 

In PA transfer tax is 2% which is usually split 50/50 between Buyer and Seller. Usually seller pays commissions. 

Its possible you might need to order a tax cert. Then you have other fees like settlement fees, notary, etc that might be like 200 bucks total.

Your most expensive expenses are your transfer tax and commissions.

In Phila that transfer tax is 4.28%

Did you buy this home off the market yourself or through the MLS?

Its strange that you were not given proof of rent while you were under contract. Seems like a red flag if you ask for it. 

In PA we have a 5 day standard period to review leases and ask for all info regarding tenants. 

Here are some red flags I see:

1. they dont share proof of payement

2. They dont let you enter premesis

3. The apartment is in very poor condition and there have been outstanding repairs 

It seems to me like you have non-cooperating tenants. Did you get their security deposits and prorated rents? I wouldn't keep these tenants much longer... Do not renew their lease, and if they dont pay, serve them notice...

There might be no reason for the resistance besides being incredibly difficult people who will take all your energy from you. 

 In the situation that I had they moved out a week before which worked out. Otherwise I'll need a day or so to do touch ups and clean. 

So instead on oct 1st move in maybe its oct 3rd. (you prorate your first month)

When showing my appt to prospective tenants, I will typically know the condition when the current tenants move out. 

In many of my cases my tenants have been spotless and even cleaned up after. 

its case by case really but your tenant is one of your most important assets

 Can you actually buy 5 points and get in the 5's

Thats crazy tho. On a 400k loan thats 20Gs

Turn over costs depends on a couple of things:

1. Your tenants - are they clean, did they leave the place in great shape? Most of my tenants leave my place spotless - but that is due to good tenant selection. The dirty and more beat up, the more you will spend. Typically I have my painter come in a "touch up walls" like 300 bucks max. For larger homes this will cost more. Also to your point about D vs A - I think that your turnover costs would be cheaper for an a class property that a D class. Thats becuase your odds of repairs are much higher on D class than A. Renovating 1000sqft is going to be similar in labor costs if youre in same area. 

2. Vacancy rate and market - if your market is struggling, and it can take up to an average of two months to rent out the place you have to factor in that that's two months of lost rent. If you're in a strong market, like the one I am and you can get a property rented out in a weekend while you have current tenants in place. therefore 0 vacancy

my most recent turnover cost me $300.

I've had other turnovers cost me $4k - that was mainly because of bad tenants who purposely trashed my place. 1 month in lost rent + repairs

Mid 5% for DSCR loan? How many points are you paying to get that low. I might need your lenders #