All Forum Posts by: Eric Samuels

So my duplex was vacant for almost a year (could have been more aggressive with finding tenants) and I was let go from my job back in January so I was bleeding for a while. I got a good paying job and my property is now cash flowing a bit which is good. Thankfully my job covers my insurance completely and gives me 20k in equity every year but no 401k match.

I think I'd like to start investing in my Roth IRA which I have but haven't contributed since I've bought the duplex back in September 22 but I'm trying to figure out my budget again because I've moved to Los Angeles to live with my gf.

My reserves have definitely taken a hit so I’d like to build it back up and am hesitant to start contributing again until I can have a reserve for my real estate (thinking 6 months worth until I’m comfortable contributing to Roth again)

Is this dumb? Should I just start contributing again? I most likely can afford it but am really keen on building up a reserve be side there’s still a few things to fix in the place and I want to make sure I’m adding enough equity to the place to eventually cash out refi and get my next property.

Hi guys,

My money partners are looking for a property that will generate them income when they are not living in Philly but will give them a place to stay when they are back in town. Looking to do mid term rental in the unit that is left furnished while they are not there and Section 8 in the other units ideally.

Just trying to get my reps in with deal calculations. Seller's current asking price is $525,000 but I was thinking of asking at $450,000.

Property is zoned CMX-1 and is currently configured as commercial downstairs plus two apartments upstairs and basically in Shell condition. (I've yet to take a look at the property to confirm.)

ARV Comps:

https://www.redfin.com/PA/Philadelphia/1012-S-24th-St-19146/...

https://www.redfin.com/PA/Philadelphia/1709-Christian-St-191...

https://www.redfin.com/PA/Philadelphia/1525-Christian-St-191...

Rental Comps: 

For gross rent determination I'm assuming room configuration to be 3 bed 1 bath for two units and a 2 bed 1 bath for the last (furnished unit). Section 8 rent payment standards has the city willing to pay up to $3,120 per 3 br unit so I used gross rent of $6,240 given rent for the furnished 2/1 unit would be too variable with partners living there as they please.

Phila.gov info:

https://property.phila.gov/?p=871540010

https://atlas.phila.gov/927%20S%2017TH%20ST/zoning

Questions:

Does homeowner's insurance seem right for this? How about hard money interest rates? Please let me know if anything seems off.

Thanks!

View report

*This link comes directly from our calculators, based on information input by the member who posted.

Quote from @Theresa Harris:

Quote from @Eric Samuels:

@Theresa Harris

My long distance girlfriend lives in LA and I plan on marrying that woman. I understand it’s not the best financial decision but I don’t care. Long distance is ruining our relationship. She just got a new job out there and needs to get thousands of hours to get her MFT license in CA. Can’t make her move to Philly.

I used to live in LA and my W-2 experience was in tech/the entertainment industry so frankly it would be easier for me to find another job but still shooting for remote in general.

Trust me if I could stay in Philly I would.

And yes $1000/month is a few hundred under market.

 That makes sense moving to be with your girlfriend.  For the basement unit, why are you renting it out below market value?

It still needs a light Reno. Some drywall replacement, repainting, need to add a backsplash to the kitchen, maybe replace cabinets, flooring could be redone. Not where it needs to be to get full price at the moment. Which is why renting to my friend would be a pro because he’s fine with the condition but I think I’m leaning towards a no. I waited a LONG time to get a section 8 tenant on the upstairs unit so I can wait longer to get a section 8 tenant on the first floor. Unless my friend agrees to $800 for a definite amount of time where he’s gonna be out after a year regardless then it’s prob not a good idea.

@Eric Samuels sorry I miss read. Yea overall I’m not 100% convinced on either decision right now tbh. If I’m able to land a job within the next few months I’m prob more willing to wait it out and find someone else.

@Nathan Gesner like I said I already told him I would evict him if he fails to pay. We’ve already discussed that business is business. I wanted to make that clear.

@David Peschio

Conversation has already been had multiple times. Like I said originally. I told him I’m not afraid to evict him if it leads to that and he understood. That’s why he didn’t submit an application already. Waiting to get into a better situation.

@Theresa Harris oh and to add. Upstairs is section 8 but I’m not doing section 8 downstairs just yet because it needs some work and I don’t want to attract bad tenants with a cheap unit but first need to focus on getting my financials in a better place of course.

@Theresa Harris

My long distance girlfriend lives in LA and I plan on marrying that woman. I understand it’s not the best financial decision but I don’t care. Long distance is ruining our relationship. She just got a new job out there and needs to get thousands of hours to get her MFT license in CA. Can’t make her move to Philly.

I used to live in LA and my W-2 experience was in tech/the entertainment industry so frankly it would be easier for me to find another job but still shooting for remote in general.

Trust me if I could stay in Philly I would.

And yes $1000/month is a few hundred under market.

Hey everyone,

So I have a duplex in Fishtown and I just accepted a section 8 tenant for my upstairs unit at $2483/month. The downstairs unit (1 bed/1 bath) I'm currently living in but I need to move back to Los Angeles at the end of the month. I have an option to rent to a close friend of mine but from a screening standpoint I don't know if his financials are there. My mortgage payments are currently $2,841.40/month and my property management fees are 4% (I'm striking a deal with a property manager I trust so I'm super thankful for them giving me such a low rate). The first unit needs a little work but I think I could rent for $1000/month in general and that is what I told my friend I would rent to him at.

He hasn't submitted an application because he told me he's trying pay off some overdue parking tickets and just wants to be in a better financial spot before committing. He has also mentioned that his job has been paying him late here and there. He's a driver so also stays in hotels often and isn't at home as much as other people.

One benefit of me renting to him is that I was going to leave most of my stuff in the unit to rent furnished and will grab what I am ready to take slowly. He doesn't really have too much of his own stuff given he's renting a small room somewhere else. Otherwise I'd need to move all of my stuff out immediately and most likely pay for a storage unit if I rent to someone else.

Also important note here is that I lost my W2 in January and have been applying HARD. I'm in a final round with a company but steady income has not been secured yet so if I could at least cash flow that would really help me stay afloat for the time being.

Obviously I could market the unit as-is and potentially rent to someone but won't likely be able to rent to a section 8 tenant which I was hoping for down the line.

I was considering starting off with 3-month leases with auto renew and I have been VERY clear with him that if he is unwilling to pay on time that I still am treating this as a business and am not afraid to evict him. I know that it will never get to that point but I wanted to establish that verbally.

Realistically, once I leave it's not like I'm going to be getting rent for that unit anyway so if he's late I won't really consider it the end of the world.

Would love to hear people's honest thoughts.

Thanks,

Quote from @Eric Greenberg:

Hi Eric,

what is the sqft? Did you check to see if there are 3 rental licenses?

Zoning for RM-1

Any building with an RM designation can be used as a residence: for one family or as a multi-unit building. However, there are limits to how small each unit can be. In an RM-1 building, the minimum unit size varies: for the first 1,440 feet of square footage, you have to use at least 360 sq. ft. of lot area for the units. If your building is bigger, you have to use 480 sq. ft. of lot area per unit.

https://www.phila.gov/media/20220909084529/ZONING-QUICK-GUID...

 Hi Eric,

It does look to be RM-1 and the rental license does say it's 3 units so I think I'm set, but how do you personally confirm sqft? I know on property.phila.gov you can see any property's sqft but how trusting is that? For this one it says:

Lot Size: 1,088 sqft

Improvement Area: 3,015 sq ft

Frontage: 16 ft

Which do you use to confirm in your deal analysis?

Thanks,