All Forum Posts by: JJ Chojnowski

@Yacine Rimmo

Talked to my PM about this, and it seems they've begun to enforce the oil tank removal just this year. I suppose I'm lucky my last few didn't have it or that it was already removed.

Best of luck!

@Yacine Rimmo

First I've heard of that, though the last couple I bought didn't have a tank.

I would try to push on the seller, especially if the agreement came with a requirement for a clear CO. Either hey thank to do the work or put some amount I escrow at the closing table.

Did the city give a rationale?

@Alex Obleschuk

I worked with Gross-McGinley in Allentown for LLC formation. They were professional and easy to work with.

Worked with Rob Jacobs in Easton for my 1031 last year, and I think he would be able to help you here as well.

Feel free to message me with any specific questions about either

@Account Closed

For what it's worth, I have buildings in the same part of Allentown as John and the tenant base can be high maintenance to deal with. I self-managed for about 2.5 years before other parts of my life made it impractical to do it myself, but even while I was self-managing I could easily have spent every weekend fixing things myself or coordinating contractors while also chasing rent. This is far from the passive income one seeks when doing real estate investing!

I do think I learned valuable lessons from self-managing, but they were expensive with respect to my time. I did find a great PM, who seems tough but fair with the tenants and honest with and available to me all at a reasonable price. There are lots of reasons to go with a professional PM, many already stated in posts above. I think the most important, which is why I ultimately opted for it, is the value of your time and what you can be doing otherwise. 

@AnneMarie Iorio

I used Rob Jacobs in Easton last year as the QI for my 1031.

John, 

As others have said, Allentown is filled with older homes that have had deferred maintenance. I've dealt with a version of most of your problems both first-hand and with/through a property manager. 

I think you've got to follow the numbers on this to see if it's worth it. As I see it...

1. Your rent is low. Not sure what your exact area/street/finishes are, but I've seen as good or better performance, both in terms of monthly rent and the amount of time it takes to fill the property with a tenant. 

2. You've hit a lot of bad luck early, and it looks like you're in a tight spot between what you've already put into it, the vacancy you've incurred which hindered cash flow/accumulation, and reserves going into it. The advice of cutting losses and not throwing good money after bad are both sound if you believe the bleeding will never stop. 

3. If you stick it out, there's money to be made. But without knowing exact details, I can't say whether or not it's worth it for your situation or how long it would take to have you see a good year. 

4. I would read your property management contract. I'm not going to say whether or not 10%/month in interest is usurious, but it can certainly add up quickly. Also, the way it's framed in your post makes it feel like it's very unexpected. 

Best of luck. Let us know what you ultimately decide

~JJ

Hi there @Raymond Reyes! Send me a message any time, I'd love to help if I can

Hi @Jr Trotta. I'm an agent in the Lehigh Valley and an Allentown Landlord. If you'd like some help, message me and I'd be happy to share what I know. 

@Joe Tomko I'm not sure I'd call it a bubble, but I do know of sellers doing exactly as you describe. I think your advice of "doing one's homework" applies to every deal you do. 

@Christopher Bruno I a certain area's investment desirability has to align with one's particular goals... Is your idea to buy-and-hold to generate cash flow for a specified term? Are you looking turnkey, a place you can add some value, or the shell of a building that needs to be redone and populated with tenants? Residential, strictly commercial, or mixed? Are you aiming at appreciation due to the "path of progress" (which some may label as speculation)? Just some questions that may help you refine what your investment interests might be.

Hi @Christopher Bruno. I'm a Realtor in the Lehigh Valley and the landlord of a multi-family property in Allentown. In my general opinion, since each deal is different, Allentown and Bethlehem both have strong cap rates at more affordable prices than NJ (I grew up in north NJ and have lots of family still there). If you're looking to flip in those areas, investors will statistically be your likely buyer depending on neighborhood (e.g., Allentown is ~33% owner occupied overall). Demographic trends are favorable for long-term buy-and-hold, considering the Lehigh Valley is the fastest growing region of Pennsylvania and Allentown specifically is the fastest growing city in PA. 

Let me know if you'd like to hear more.