All Forum Posts by: James Brand

Hey BP, looking for input (and recommendations for those local) on cost for architectural and MEP plans. My architect has been cheap (<$2,500) but I get plans kicked back and my MEP plans run me about $5,000, less issues there. Wondering how that measures up, and if anyone has a local recommendation especially an architect in Philly would be happy for the connection.

J

Hey BP,

Looking to make this a sounding board for inspiration for how others have partnership arrangements. Starting to scale with my partner and we are looking to settle into very detailed terms of who does what, and what the money breakout is when starting a project and upon completion.

VERY INTERESTED to hear how all of you guys divvy it up with your partners.

Background on me and my partner:

I am an agent, and my responsibility is finding the property (so far just MLS but now bidding on sheriff sale), I determine if a property is a viable rental and at what price point we would need to acquire, also if converting a property into a MFH is doable based on zoning, and determine rent and overall profitability of a project. I also oversee the bookkeeping. My partner is a GC and he looks at the properties before we buy to determine budget to rehab into a duplex/triplex, basically once we settle I just keep tabs on costs, plans and permits and he gets the property turned around into the rental we need which is where I step back in to get the units listed for rent and vet tenants etc (my partner GCs at cost).

One project I secured financing from a private lender that we will payoff upon Refi when fully rented and another we split the cost personally 50/50. I like the 50/50 arrangement but I do not think it is scalable so trying to see how others have set up partnerships. Ours is very well catered to each others strengths but it definitely requires him to do much more running around and stopping in the property during reno.

Let me know how you guys set up you capital contributions for your partnerships, any tips and tricks are greatly appreciated!

J

@Miguel Bautista

Just over the Delaware there is a lovely place called Pennsylvania :)

Check it out

I was born and raised in NJ but have lived in PA the last 15 yrs, I’m about as Far East as you can be so super easy access to NJ. My investments are all I. Philly

Food for thought!

Maurice, could you send me the contact info for the lender you used on the non-owner occupied 4plex?

Hey BP,

Hoping to hear from anyone who has ever converted a RM1 zoned property into a triplex, specifically utilizing the basement level as a unit. My concern is that I have heard that L&I can be tough on allowing basement bedrooms with variances these days but as for something that is allowed by right I am not sure. Wondering if anyone has had any experience with this as of late.

Thanks!

J

You may even have a problem evicting once you receive your license as it was not obtained prior to placing the tenant. For this reason, among others, I would opt for the attorney. Just my $.02

I agree completely with @Ethan Giller. It sounds like you intend to keep some of the original pieces of the home, perhaps you are just going over the older walls with new drywall? Either way definitely disclose the wiring clearly and perhaps get something from your electrician stating that he inspected the old wiring's condition to put buyers at ease. I have seen old wiring kill deals though, so if possible have it replaced.

J

I am a believer in being close to transit when it comes to rentals, and that location is solid. All comes down to the numbers though. I do not love 7% for an interest rate.

Very important question: Is your agent an investor?

Also, how close to Broad street are you?

Point Breeze home values have been going up at an incredible rate over the past several years, I bought a triplex a few blocks from Ellsworth-Federal station back in 2015 and am very happy with how it has progressed. That being said, I do not think this trajectory is a lock to continue. There is considerable risk in factoring in this appreciation to your overall strategy.

J

Good Afternoon BP,

I know this is a discussion repeated quite often, however I wanted to address a specific item, and with so many financing professionals on here I am excited for the responses.

Situation:

I am buying a triplex in cash, renovating it, renting it, then refinancing shout out to @Brandon Turner's BRRR. I intend on purchasing through an LLC, however when I refi I will need to get a commercial loan whose rate adjusts every 5 years (per my understanding of the structure of such loans). If i were to purchase as an individual and the refinance I believe I would be able to lock in a long-term low rate.

So is the LLC's protection worth the likely higher rater which will adjust in 5 years? Am I wrong in my analysis? Please weight in!

-James