All Forum Posts by: Igor Messano

@Joseph Scorese, I am not familiar with all of the rules on FNMA 10 but for those lenders that might not use it as a guide, have you seen anyone be able to cash out refinance before 6 months? Using hard money would expedite how often I can fix and hold properties but 6+ month of holding costs can really eat at potential equity.

Any thoughts?

Hi everyone,

Question to hopefully a simple problem. My wife's father owns 2 commercial properties that he has sold the "business" (Tire shop) to someone else but continues to receive the rent for the 2 adjacent properties. He does not live in the US and the properties are currently under his sisters name but she needs them off her name and he has asked us to step in.

Aside from basic family issues that can arise, what are some of the liabilities that we should worry about and how can we structure this to limit them? Would putting the properties in an LLC cover us? We are also afraid of getting hit with taxes related to the rental income since we aren't receiving the proceeds for ourselves.

He lives out of the country for reference.

Hi everyone, Does anyone have any quick ballpark figures on full rehabs in Philadelphia for rental properties? I want to start doing full rehabs BRRR strategy in Kensington area. I have prior experience but not with full gut rehabs. Properties I am looking to purchase are between 800-1000 sqft, two story flat roof, unfinished basement, 2-3 bedrooms 1 bath. Not counting any structural issues, what range would you say a full rehabs like this would cost?

There are lenders who will lend to undocumented people using your ITIN number and history of income and paying taxes. They are hard to find but look around. I know 2 people that purchased their homes through NACA. They have some kind of program you follow that you record all your income and expenses for a period of time and they evaluate your financial conditions extensively. At the end they get approved though and the rates iirc are lower than market rates. I believe they have close to 2% on a 30 year.

@Kevin Branin You would be looking at a list of free and clear for a certain section of the city, such as a zipcode and you can manipulate the listing to view the MF only. What areas are you guys looking into. Wanting to get started is a great start but if you don't have an area of focus, price point, or strategy narrowed down, you are going to spin a lot of wheels.

Originally posted by @William S.:

Thanks everyone for responding. To those who are getting +$200/m in cash flow on SFH. I sure would like to see the analysis you did. I have heard from several people that they are getting high amounts of cash flow yet no one has shared the numbers. After being at this for a year and seeing $150/m at the very best, I'm not sure if the $200/m is realistic on SFH...

The question of monthly cash flow does not have a standard answer. If you buy a more expensive property, let's say 180k, you should naturally have a greater monthly cash flow. However, that doesn't tell you anything about how good or bad of a deal it is. You can have positive cash flow but have a terrible CAP rate or CoC Return. Deals can be had on SFH that cash flow very well depending on your market but buying turn key properties will lower most of your metrics significantly. When you buy a turn-key, you are buying a property that was a great deal at some point but the turn-key provider has kept the majority of that value. If you want a great deal, go find them yourself because no one is going to hand you a perfect property, with a tenant, and leave that much meat on the bone.

Example:
I have a SFH in a C+ class neighborhood (In transition to B to B+) that I purchased last year. See below for the numbers.

Purchase: $52,000
Down payment: 0
Closing Costs: Just shy of $4,000
Monthly Rent: $950
Vacancy: 95
Maintenance/CAPEX: $76 (8%)
PITI: 348
Cash Flow: $430
Cash on cash return: 130%
Cap Rate: 15%

Now while this property is a home run in terms of the return, it is not impossible to get deals slightly more conservative but great. Now if I was to buy this same property from a turn-key provider, what would you think would be different? They would jack up the price to close to market price where there was just enough meat on the bone to cash flow. Money is made when you find a deal, not when someone else does. If your market doesn't have these opportunities, find one that does.

How is the listed price on their website? Is the starting point for bidding or could you get the property, depending on other bids, for less than the listed price?

Hi everyone,

Does anyone have any experience buying properties from the city? Seems like this new "land bank" is the main place controlling the vacant properties. I have an empty lot I am want to purchase but the listed price is not even close to market price. I suspect it is because it is 2 blocks away from Fishtown (Lot is in Kensington) and the comps are probably jacking up the price.

It's currently listed for over 30k but I could easily buy a semi-distressed property in the same street for that price. Empty lots within a 4-5 block radius but inside Kensington are more around the 5-10k range listed. Before going to the land bank this property was listed for 3k by the city.

Any ideas how to get this lot for cheap?

Agree with Brandon. Tough to pull someone in at an internet forum without a plan, proven track record, or a deal in hand. If you do have more specifics it would help you.

If I had no or very little experience in real estate at the start of investing 1M I would start with SFHs and leverage buy and hold properties as much as I could. Value add properties in my area would be the way to go as I could refinance my cash out after 6 months and keep building. Could even throw in 4Plex or smaller. The final goal would be to have some SFH depending on the area but ideally move into large multi family. By starting with SFH first you can build on top of the 1M and when it was time to switch strategies to MF it would be much easier to sell the SFH portfolio.

This is all for my specific geography as rehabbing SFH in my area gives you great margins to grow and cash out refinance. MF gives you a more stable platform for long term holding.