All Forum Posts by: Account Closed

Thanks @Ryan Cameron, @Ali Boone, @Mike B. - I think this house is too overwhelming for my first deal and you're right, the house needs a ton of work which I'm not in a position to finance even though the rents might be steady. And yes, $500 a month tenants would not be high quality, so there's that.

I appreciate your help everyone! I think it was a good exercise for me to walk through the house and consider all the variables you mentioned to make the decision not to pursue this one. I feel like I learned a lot from you all, very practical advice.

Cheers,

Jake

Thank you @Account Closed The block is not bad, as in my wife and I would not mind living there, it has plenty of parking, it's tree-lined, clean, and close to a middle school. I confirmed it's zoned RSA5 and found the zoning documents online. I see it has an application for a 4 family property so I assume it is zoned correctly for that. The application dates back to 1983.

It is being sold by Premiere Asset Services, a dba of Wells Fargo - do I have other options of going straight to the bank to buying the mortgage?

My biggest concern is the construction cost as my wife doesn't want to take out any more loans. It took a while for me to convince her that a HELOC was a good way to get started with our own financing, but we only got approved for $45K. I'm going to put in an offer and see what happens, can't hurt right?

Thanks everyone! For context my wife and I livr about 6 blocks away so it's in walking distance. The neighborhood is pretty good for North Philadelphia. 

It sounds like buying through an LLC could hurt funding. Can I buy through the LLC if I put more money down and get someone else to fund the rehab costs?

I think I found a good deal, a 4 unit building, sold as-is, in North Philadelphia and it's listed for $55,000. It has a 3, one bedroom apts and 1, two bedroom apt in it. It doesn't look bad on Google street view.

Rents in the area range from $500-$700 for 1 bedroom and more for a 2 bedroom. I am going to see it today at noon and ask if I can get an inspection to see what the cost of repairs would be. I have a realtor and my wife and I are going to take note of potential repairs that need to be made and try to estimate the costs - I think there's a tool on BP for that from what I've heard. I have a mentor/partner who has a GC to do the work if I need to and I know another GC I trust also so I can get multiple quotes.

I would be ok renting out the 1 bedr. units for $500 and the 2 bedr. one for $700 since the rent alone would more than pay the loan on the home in about two years. I am planning on putting 20% down and financing the rest with my HELOC, which I am transferring those funds to my LLC. I am closing on the HELOC on Tuesday and it is $45,000. That gives me a lot of cushion for potential repairs if needed. I would also be creating an LLC to buy the property.

As a first-time buyer of a rental property, what advice do you have? This is my first real deal (my wife and I each have a home in our own names and rent one on AirBnB and it's paying for the mortgage,  utilities, and a little more. Would love to hear back from you all! I appreciate your feedback as a newbie to the game.

Best regards,

Jake