All Forum Posts by: Brandon Eleazer

Hi Steve,

For some reason the link wouldn't open. Are you saying there will be no fee to renew the housing inspection (rental) license? I'm sure you weren't referring to the BPL as that is a one-time fee....

The city will find another way to make its money

Welcome William, thank you for your service to our community/fellow residents.

Any update on your rehab project? Please bring us up to speed with more details!

Brandon(same name),

If you sent in the $50 fee to apply and paid another $50 in person then the city will apply the extra payment to the following year (2013-2014). As you may be aware they do not issue a refund.

How is your duplex working out? Was it already in move in condition when you bought it?

A friend of mine owns a duplex in Mayfair that he lived in the first floor and rented out the second floor.

Thank you Will, unfortunately that is exactly what I thought. Seems there is no other way to make this happen without selling him a piece of the pie. It will be nice not having to pay out of pocket for repairs though.

I recently purchased a buy and hold investment property. Now a friend would like to invest $15k to cover rehab costs(and split any expenses moving forward). I offered to pay 10-12% interest to him on the money if he loans it to me, but he's more interested in the tax advantages of ownership in the property (and long term equity stake) and less concerned about cash flow or initial return on his investment.

Is there any way to structure this partnership deal so he gets the tax advantages he is looking for but without giving up a portion of ownership to him?

Sobsie,

This clause may be common in management contracts. I believe anyone reading it would take it at face value as you have. Our firm added language to our agreement to address this issue, which basically states the PM agrees to act responsibly and to the best of its abilities in fulfilling its duties as Property Manager; and will make reasonable efforts to perform the due dilligence to be reasonably expected under the circumstances implied by the contract.
It does not eliminate the indemnification clause but helps reassure the property owner that the PM is held to these standards.

Jon Holdman,

Great response. Thanks for sorting this out. I understand and agree with your logic. Perhaps I'm being a bit overly conservative...

Sam W. sorry if the original post was unclear. The purchase price is $50k but with closing costs and rehab it will actually end up costing closer to $70k.

Thanks for the replies guys. Given this scenario there is $2,470 per year, or roughly $205/month to cover the expenses you both mentioned. Even looking at this for one year it seems this will not be sufficient.

I guess what I'm getting at is that when you first analyze it and figure that half of your rent is going towards expenses it seems too high; but then you look at the actual costs and half the rent may not even be enough.

Hello BP,

I am preparing a budget for a SFH that costs $50k. The monthly rent is $1k. Using the 50% rule of thumb I don't see how $500/month (which amounts to $6k per year) is enough to cover all expenses except P&I.

Here are the known fixed yearly costs:

Taxes $1,320
Insurance $960
Rental License $50
PM (10% of $12k rent) = $1,200

These total $3,530, which leaves $2,470 per yr($6k-$3,530=$2,470) for variable costs (i.e. turnover repairs, general maintenance, vacancies, etc.)

Only budgeting $2,470 for an entire year does not seem to work. For example this is only barely enough to cover a few plumbing and electrical repairs, and the cost to clean and paint the unit when a tenant moves out, just to name a few things.

Am I missing something here or does it appear there is not enough income to cover expenses? Thank you.

Ty, @Curtis N. is right in line with what our team currently charges to manage a 1BR 1BA unit near the Philly Art Museum. This client had one of our buyers agents represent him during the purchase process (it was a foreclosure) and then we coordinated the repairs to get the unit ready for a tenant directly after settlement.