All Forum Posts by: 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.

@Gregory Coppola sorry for this mishap. The free version of Rentometer will NOT show individual listings. Rentometer Pro will provide individual listings for 1 bedrooms, individual listings for 2, 3 and 4. I’m sorry, again for the mishap. 

@David Clay yes, I understand the dilemma. The Pro membership does give more specific details than the trial offers. I just ran a 1 bed room search for properties near mine’s. One listing is 2545 N Front St #1, Philadelphia, PA 19133. I then searched that same address and it showed-up on Coldwell & Banker’s site - Sold: $1,045 which is the exact rental price Rentometer Pro showed me. It’s not a guarantee for EVERY listing because some of Rentometer’s listings still show as “available”, but other times these listings aren’t available anymore or are ‘sold’/rented. 

I find Rentometer Pro to be really helpful, and I noticed @Brandon Turner uses that on his webinars. 

Lastly, it’s recommended on the BiggerPockets “Rental Property Calculator”. I hope this helps.

Hey, Gregory. I use Rentometer (Pro). I strongly believe it gives current rents, not available listings.

@Jaysen Medhurst, this is great insight. Thanks for the advice on specific questioning on seasoning, and for the heads-up on not having high expectations. I hope you find an apartment complex that meets your criteria. That’s a long-term goal for me. So I would love to hear how you make it work.

@Jaysen Medhurst have you had any experience with community banks? Do they tend to follow the same standards as the larger commercial banks?

Oh okay. I’ve been researching about community banks who don’t have the seasoning rule. I’ve got a list of 8 community banks I plan on calling when I’m closer to finishing the rehab.

Hey, Jaysen. It’s a single family, legally converted into a duplex. 

1. Thanks for the heads-up on the refi reserves. You are referring to 6 months of mortgage payments, correct?

2. It would be great to pull down capEx and repairs.

3. Thanks for the heads up on taxes, wasn’t sure how that would turn-out.

4. I significantly padded the Loan fees @ around 8% of loan amount.

5. Theirs no lawn, it’s a townhouse in the city. For Property Management: I looked up the rates of a company in the area yesterday. They charge 8%, BUT their Premium Maintenance package would take their fee to about 11.5% per month. 

• Unlimited 24/7 Tenant Communication
• 4 Home Wellness Checks per year
• 4 HVAC Filter Changes per year
• 4 Smoke Detector Tests per year
• 4 Exterior Property Inspections per year
• 1 Roof Inspection per year
• 1 HVAC Tune-up per year
• 2 Professional Common Area Cleaning
• 100% Free ACH Deposits
  Every ACH bank transfer in or out of your account is 100% free.
  

I recently realized my ARV from Propstream was based on bundle property sales, instead of a singular property. That ARV is going to take a major hit, but rent rates are in harmony with what I calculated. So we will see.

Wow, Kevin. That doesn’t sound like something out of the ordinary. Definitely hoping to learn how to work with L&I. I suspect more phone calls to clarify their records on each property I deal with. Thanks for sharing.

Thanks, Rob. I’m learning a lot.