All Forum Posts by: James Mc Ree

I agree with @Markus Shobe. You should have a conversation with your HR Block person as a resource to learn what you should be thinking about. Owning a rental home with or without house hacking is a pretty basic thing that almost any certified tax professional or accountant should be able to handle.

Think a little in a bigger picture about what type of advice you will want: tax, accounting, financial planning? The general accountant can help you with more than just tax reporting. The tax person is taxes only. You might get more value from a financial planner or accountant if you want a little more help, such as retirement planning. Just a thought...

@Isadore Nelson

@Nicholas L. makes good points. In addition, Port Richmond currently has 87 3br units available for rent. Your prospects have many choices before you add yours. You may have longer vacancy times. Your price point of $1,100 puts you below nearly all of the competition mitigating that.

The Philly L&I department has a terrible reputation. Plan for licensing and inspection hassles and delays.

Be careful how much weight you put into a prop mgt company's casual answers about the market. Have you ever gone into a restaurant, asked "What's good?" and they say, "Nothing." If you ask a prop mgt company if they can find you a tenant, of course they can! It's strange that there are 87 similar properties currently vacant, but they can for sure find you a tenant.

Based on your price point, my guess is you are looking at northern Port Richmond. Those properties tend to be older, as in 100 years old or so. They likely have plaster walls, nothing conforming to current code of course, but not illegal either, and rough basements. Bars will be on the windows (crime reference above).

Don't be surprised if your cheap purchase costs that much or more to repair as your repair costs will be much higher than a home built with more modern materials, such as in the 1940s-1950s. Be sure to look the house over well yourself so you know what you are getting yourself into before you are in it. It might be a good idea to bring your contractor with you to look at the property and get a quote to fix it to your standards so you know what you are dealing with before you buy it. That could be a very well invested $100 or so.

Additional expenses I add are municipal inspection fees, inflate the cost of all repairs if your prop mgt company is handling them for their load onto the repair cost and utilities while you hold the property initially and with turnovers.

Overall, I wouldn't say this is a bad idea if you know what you are getting into and are comfortable with it. That's a huge leap though for a first time investor who can't possibly really know what they are getting into. (I'd like to learn how to swim. OK, how about in the shark tank? Sounds good. What stroke should I use?) Finding a local mentor who isn't selling you something would be a very good idea. Consider making a local real estate group your next stop. Don't be in a hurry to buy. You make your money when you buy, unless you buy poorly.

This is a relative value question. Is your $60k purchase + $x in repairs for a total of ??? better than an $80k property in a better area or better condition, for example? You might get $1,400 - $1,500/month rent for a nice $80k property and a higher class of tenant.

Get to know Section 8. Your tenant will very likely be part of the program.

You will probably want to hire a local engineer to help develop the site plan. In addition to grading, you need to consider soil types, impermeable conditions you are creating and the resulting stormwater runoff mitigation. An engineer can help you with all of this.

If you don't know of any good engineers in the area, try calling the local township office to see who is the township's engineer. That doesn't make them the best, but they will very likely know the local ordinances the best which may save you some rework time and cost.

@Justin W.

I see at least 4 options for you:

1. Hire a lawyer to at least get your questions answered. It could just be a simple consultation that doesn't cost much.

2. File your own lawsuit and guess at what should be done. This is not at all recommended.

3. Inform the buyer, seller, agents, title company, etc of the restrictions and back away. If nothing else, the title company will likely include a note in the title insurance excluding anything related to the restrictions. You don't need a lawyer to do this since you are just sharing publicly available information.

4. Do nothing and let it go.

#1 And #2 will require someone with standing to file a lawsuit. The way you are writing, I am getting the impression that one or more close relatives could have standing, but might not want to get involved that way and you do not have standing, but are far more passionate. You need to recruit someone with standing. The lawyer could clarify that for you.

I don't know of a legal prohibition on it, but you would need to find a settlement company willing to accept it. It might help if both parties were willing to use the same medium.

You will run into issues with all of the fees. For example, there is a 2% or so transfer tax to be paid to the municipal and state governments. They won't take crypto. What is the 2% based on? I can only imagine it has to be a dollar representation of the crypto, but that value is continually changing. I can't imagine any settlement company wanting to get tangled up with that as it is just 1 example (commissions, other taxes, deed/mortgage recording, etc).

@Justin W.

It is correct that the town will not enforce the deed restriction. It is a civil matter, not zoning or criminal.

You are building multiple inherent conflicts with yourself in these posts. You are looking at a legal matter and need a lawyer to address it, but you don't want to get a lawyer. It would be foolish to take internet legal advice and just blindly act. For example, you need standing to sue. Do you have standing? You won't say beyond you are as close to owning the property without owning it. To me, that means you don't it and have as much claim to it as I do to my neighbor's property.

I lived in a community in PA that had a deed restriction blocking construction of sheds and other things on all of the nearly 400 properties in the community. It was enforceable by any property owner in the community since it was a restriction on the parent property. Any property owner could sue to make someone remove the shed, but they had to sue to do it. I don't know of anyone actually suing for it, but there were no violations of the deed restriction anywhere in the community.

That example is from PA and might not apply to your situation. If it is relevant, you probably need one of the existing property owners to sue to block the mobile home. Good luck.

Fees/fines vary by municipality. You would be exposed to doing work without a permit, the cost of the actual permit and, worst case, having to rip it all out and have a licensed plumber/electrician do it again.

I've heard most municipalities around my area no longer charge the work without a permit fine. They just make the homeowner buy the permit. I wouldn't think they would require a redo for work that is readily visible, but it seems like your inspector is on the extreme end.

Try asking for forgiveness first since it is a trivial amount of work with low complexity/skill required. Fallback to appealing to the municipality's manager for forgiveness. Last, offer to buy the permit only if they are charging a fee for work without a permit, but that will require a licensed plumber and electrician to inspect which will be another fee on top of the permit. Plead, "I didn't know I couldn't do simple work like this in my own home. It's done all the time!" It might work.

Next time, don't be so chatty showing off to the inspector everything you did. Remember, "You have the right to remain silent and anything you say can AND WILL be used against you." when talking with a government inspector.

@Ethan Bruland I have an initial negative reaction to this idea, but there is a lot more information needed to reach any kind of useful feedback.

Zoning - You can't spot zone. Make sure the zoning change proposal makes sense beyond your personal interest. Your local zoning officer and Planning Commission can help with this on the municipal side. A real estate attorney is also a good partner for this. To be successful, your property very likely will need to abut to your proposed zone.

You should research if the town has a mixed use zoning which may fit your need the best. A mixed use zone can be a good transition between residential and commercial.

Impact - My wife used to live in a dorm with a high speed train going by every couple hours. Her whole room shook and they couldn't have anything on the walls because it always fell off. Is that the experience your residential folks and restaurant guests will have? Get to know the train impact. Slow might be OK. Fast will definitely be a negative.

The only impact I can anticipate with the railroad's presence on the zoning decision is if the railroad divides you from something you want to be part of. For example, you want residential, but residential is only on the other side of the tracks. That would be a negative for you.

Have you discussed this with your eviction attorney? That would be step 1 for me.

Definition of abandonment in PA:

https://casetext.com/statute/pennsylvania-statutes/statutes-...