All Forum Posts by: Alex Capozzolo

Hi BP, 

Question: Does anyone have experience with back billing of water bills from properties purchased at Sheriff Sale?

Current Situation:  

My partner and I current have a property under contract, cleared to close, but there’s a water meter issue. The bills for the past 12 years have been only estimates and NOT actual readings from the water bill. However, the seller from bought the property at the Sheriff Sale in 2016. 

The title company we’re using on this deal is fearful of 12 years of back billing once we install a new meter and is therefore requesting the seller to escrow $30,000 to for any potential back billing of water, which makes sense because the title company doesn’t want to eat that cost after closing if that were the case. 

We’ve checked with 2 other local title companies, who have said that since the current owner bought the property at sheriff sale in 2016, the water department will only back bill until 2016 because titles are promised free and clear at sheriff sale.

The seller doesn’t want to escrow $30,000 and is therefore holding up the settlement. He’s willing to escrow $5,000 ... but no more than that. Lastly, we do not want to extend 3 months to get a new meter installed, go through the billing cycles, to get the ACTUAL METER READING, because we are purchasing this property with a loan and would have to start over completely.

We have the option to take on the liability (any additional back billing of water bills) after the $5,000 that the seller is escrowing. 

> Can anyone confirm in Philadelphia, PA that the back billing of water bills would only be up to 2016 for this property? 

@Aaron Morrow is this exclusive to Seattle, or could this exact same form be used in other cities in states? 

- Cash Flow and Appreciation in one investment (allegheny west, strawberry mansion, brewerytown, cobbs creek)

Yo @Derek Pheiffer welcome! I live out on the West Coast, used to live in Philly but currently invest there! Message me if you have questions on things!

any love for Philly here? Wholesaler in the Philadelphia region! Message me to connect!

Hi BP, my partner @Jon Sanborn and I recently bought a commercial mixed use property in Philadelphia, PA 19132: 3 Total Units - 2 Bedroom Unit, 1 Barber Shop Unit, 1 Hair Salon Unit. The tenants we inherited are great, but the Salon Shop was on a month to month lease, and after 15 years of running her business she’s planning on retiring in January.

This is our first experience with Commercial Tenants, and we’re curious what people would suggest for our next move for this unit?

The Salon tenant is planning on selling her Salon Business, which includes the database of clients and salon equipment (6 hairdryers, 10 salon chairs). The previous owner charged $1000/mo in rent for this Salon Unit, and had the tenants pay for Electric.

Plans we’ve considered:

• Searching high/low for another Salon tenant who will buy our current tenant’s business outright and run their own Salon from our unit. Ideally, we would find someone who is currently running their own Salon business, but needs to upgrade to a larger unit like ours. More realistically/likely, we think it’d be a hair stylist that is looking to start up their own business.

• Buy the tenant’s equipment ourselves, and rent out the Salon Chairs individually ourselves to individual Hair Stylists. This route sounds less passive, but could have a profitable upside.
  • Would we need a hair styling license to rent out the individual salon chairs weekly/monthly, even if the hair stylists have licenses? And does anyone have experience doing anything like this?

• Buy tenant’s equipment ourselves to then resell, which we estimate is worth around $3K between the used salon chairs and hairdryers. Then with the unit emptier, we would search for another different type of Commercial Tenant.

Any advice is appreciated!! Thanks

@Hanns Campbell How has the BRRRR search been going? Hopefully you've found some success! I invest in Philly but live in California, my partner @Jon Sanborn and I have BRRRR'd two properties so far, and have a 3rd in the rehab process now. Jon lives in Brewerytown and is more of the 'numbers guy' in our partnership. If you have questions on neighborhoods or specific properties feel free to reach out!

@Timothy M. Thanks! You're right, forgot to factor the interest from the loans we got! Factor in another $5000 off of the BRRRR profit. Copied this from an old Excel file :) We brought a portion of the funds ourselves, along with one other partner that covered his portion of the deal too.

I hear what you mean! We usually put cap ex and repairs higher for other properties. We put our repairs and cap ex so low because we replaced a lot during the rehab - new roof, kitchen appliances, water heaters (2/3), furnace. Overtime that will change and maybe we'll need to adjust these numbers as things age and get beat up in the property. As a reserve, we put 8 months of the entire 'cashflow' into a rainy day fund too, which we draw from for repairs and is our safety net. I agree with you though, they are low and we usually account for higher % for other properties. These %'s work for this property for now but won't years down the road. 

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $50,000
Cash invested: $34,000

Contributors:
Jon Sanborn

Our Team's third property purchased! This is a big SFH (big for parts of Philly) at 1,320 sq ft. The neighborhood is Allegheny West, 19132 - There is a ton of new development nearby, which excites us! Our plan is to BRRRR this property. Not sure if we can pull everything out, but we hope to be close. The rehab only took 2 months, which was quick for us! Starting the tenant search process next week, and then looking to refinance.

How did you finance this deal?

This was the first deal that we've purchased from a wholesaler, and it went super smooth!

What was the outcome?

We expect this to cashflow $62/mo after all expenses accounted for. Not a home-run, but hitting singles / doubles will get us to our goal! Small bricks build big houses :)