All Forum Posts by: Douglas Gratz

@Jay Hinrichs I could really use some guidance on the construction process.  I am getting my zoning and building permits and Ido not know what the next steps are. I have a developer but Want to know the knowledge before hand, so  I know. what im looking for. IE breaking ground, pouring concrete foundation, water from city line install, gas line install , framing, what order do these come in?

Hello, 

I am doing my first new construction and at first I was very confident, but no, not so much.  A lot of my flips took longer than anticipated which resulted in me having to find money for the closing.

I did! but now I am just not as confident.  Its 1.5 2 single family build in the hottest neighborhood in philadelphia. Northern Liberties.  My lot sizes are 40x60. Comps in the area range from 1.3 million to 1.9 and those homes have 10 feet less frontage.  Ir willl cost 1.5 to build it all.  So the profit looks nice however I am using hard money and thats always hard....(need to be strict with time)....Anyway, I want to make sure I of all the knowledge I need to make as few mistakes if none, possible ...

My first questions after all appovals and permits.  What is the first 3 steps to from breaking ground to the next 3 steps? does the developer handle this all?

I really need guidance here, this is a once in a life time opportunity and due to a flip taking to long, I had to pivot and I feel less safe in the investment.  All will be well as I should have 690K as soon as on house closes next month and and refi comes through, is my less safe may just be my fear....So I'm trying to reduce the risk and know all I can possibly know. 

Starting with the first 3 steps and costs right now. its 5000 sqft home with elevator. Basement, 4 levels and roof deck.

@Jay Hinrichs @Wayne Brooks 

Here it simply put, the current survey map shows one large parcel with one OPA # address 836 N. 6th st.  The buyer entered an agreement of sale with the sellers who own the above mentioned parcel.  In the agreement the buyer had a contingency that 836 N 6th st be able to have lot relocation aka subdivision that created 836-838 n 6th st. (from the original deed recorded June 3 1998)  all these address's at some point were separate according to the deed and all had their own OPA #s. but somewhere along the timeline all above mentioned addresses were consolidated into one OPA # which is 836 n 6th st.

So I have an AOS to buy 839-41 n Oriana street and the other buyer has AOS to buy 836-38 n 6th. There is also an addendum included that I myself must close on 839-41 n Oriana st in order for the other buyer to close on 836-38 n 6th

The sellers tried to subdivide but turned out the subdivision plan did not conform to zoning code and was considered not a legal parcel.  Does this give the seller the right to terminate the agreement to the buyer of 836-38 n 6th or does the buyer have a case where he can sue the sellers?)

Next question is, if I decide to back out and the sellers allow me to do so, does that void the other buyers contract due to the addendum?

Lastly The other question here is that since the subdivision has yet to take place, is the buyers contract with the seller to buy 836 and 838 n6th street null and void and not enforcable from the beginning since the parcels to be bought were yet to be legal parcels since no legal subdivision took place ? 

(CA has a law...https://www.gibsondunn.com/pur... if you read it where it states that an agreement like the mentioned above is void from the start and I am wondering is it the same here in Philadelphia PA)

@Jay Hinrichs can you elaborate  a little, by what you mean "if county/city code precludes it then in my mind deal is dead"

Thanks everyone for your thoughts

I have very important question in regards to terminate an agreement of sale.  Heres the case...I had an AOS to buy 4 lots of land from a buyer who lives next door .......After having it signed , I decided to assign two of the 4 lots to someone else. as a result two new AOS were signed one for me for the two lots I wanted to build on and a new aos for lots I wanted to sell for quick profit.

But in a nutshell I want to terminate his agreement to buy. Here’s the short story, I signedan AOS with sellers to buy 4 lots xxx1 and xxx2 leithgow and aaa1 and aaa2 n 4th st 19123 (I replaced real address with xxx and aaa

I later decided that I want to build out all 4.

In his AOS he had a contingency yThe contingency was lot relocation of aaa1 and aaa 2 n 4th st (the lots in his aos).  They were not specific on  sqft size

All lots above are part of one large lot YYY n4th st. So we went to get it subdivided into 4 equal lots.

The survery district approved 4 , 1200 sqft lots but it did not pass zoning code for RSA-5 district .

1. Does this mean his contingency was not met?

A) he wants to file suit and lis penance 

B) since his contigency did not specify sqft of lot relocation does this mean there was no meeting of minds between seller and buyer and can void the contract?

2. Aside from meeting of minds, it not failing tom let his contingent  as result can the sellers rightfully terminate his agreement?

3. Does he have the right to make the sellers wait on a variance or do a larger subdivision? The sellers are acting in good faith here, there plan was to nt have lots larger than 1000 sqft built bc it would take away the natural light they get on their large home next-door , they agreed to try 1200 but that was not conforming to code.  Can the buyer force the sellers to wait on variance or do larger subdiviosn? 

4. Also aaa1 and aaa2 address's (that are in the buyers AOS) do not exist yet , they do not have their own OPA # or deeds, does this alone void the contract?

5. In his contingency there was no outlined sqft he desired, does this mean there was no meeting of the minds between him and Sellers and make this contract voidable?

6. If he decided to fight this and files lis pendence, can I still close on my AOS for lots xxx1 and xxx2 leithgow if I subdivide the one large lot yyy n 4th st  into just those and leave the 4tv st side alone and can I build on them (xxx1 and xxx2) while the fight for aaa1 and aaa2 taking place and has lis penance ?

7) if the buyer of aaa1 and aaa2 is in the wrong about having a case against the buyers to enforce the AOS, will his lis penance be slander of title

Overall what’s my best course of action to terminate the agreement? Wvag are my chances in court ? How long does a suit like this take to complete ? What are My options. From what I state above does it seem the sellers have the right and thus would have good chance to win if taken to court?

Can I file a lis pendence before he does on the 4 lots in question so that he cannot file one and I could then be the person who can removed it?

Hello investor friends! I hope all your ventures are going well,

I am beginning a new construction project and was wondering what the average cost is for site prep.

The lots are flat at .023 acres each.  Only one obstacle is big weeping willow.

Whats a good way to estimate my site prep costs?

@Steve Morris On the auction list it said total debt was 218K, does that mean with my 247k purchase it should all be covered?

Thank you @Francis Nguyen

I wasnt expecting it to appraise that high, my estimates were closer 175k compared to friends of mine who had duplexes in the area, but it turns out, it being a corner house and over 2000sqft played a large role. Insurances said rebuild costs were over 800k (Which is absurd, its nowhere near that much, maybe 250k) Its also in a better section of the area.  And just paint really, the previous tenants kept good care of it. a few month after the fact I had to put 6k in roof issues, but other that, initially it was just paint and minor repairs.

Just bought a house at auction, I ran a title search and cant tell heads or tails from it. The auction being online is different than in person. They usually tell you if subject to 2nd mortgage.  

I purchased a title report but I do not know if it tells me anything about if there is a 2nd mortgage that I will have to worry about, however I do see mutiple transactions on here one year after the other. One loan for 136k then the next year 188k.  I won the auction for 247k. Can someone please help.