All Forum Posts by: Jon Graboyes

Currently working on a West Philly duplex BRRRR.

The Buy and Rehab went well - rehab was mostly cosmetic. However, when we went to the city to get 2 rental licenses we were told the city had no historical property records for the property, and thus no evidence of it being multi family. 

The property is properly zoned RM1, and there are probably 40 other duplexes on the block. The process with L+I has been challenging, and we're walking a fine line not trigger the need for a new CO. 

Agree with the points in this thread, @Adam Guiffrida, be careful with zoning, permits, and licensing. And @Irfan Raza, the rents for the area are quite strong, but I have concerns about ARV when we try to Refi.

@Account Closed Taxes in Norristown are high compared to the City of Phila; a $100,000 property in Norristown may be ~$3,000 p/yr in taxes compared to ~$1,000 p/yr for a $100,000 property in Phila. I suppose Norristown taxes are only slightly higher or comparable to nearby communities, but the Norristown school system is below average. You would pay less taxes to live in KofP and be in the better Upper Merion school district. 

Investors have been asking this question about Norristown for decades. The highway/train infrastructure is there. Challenges are with local government, extremely high taxes, and a difficult L+I Dept. Much of the housing stock is historic and the cost to renovate just doesn't make sense for many projects, which I feel hurts the community's revitalization prospects. That said, development plans for King of Prussia look tremendous, and there could be some spillover into Norristown, and the potential extension of K of P rail. If the local government could lower the cost for investors and attract new business to downtown, there certainly could be a demand for an urban community like Norristown in an otherwise suburban area. If you find a property that doesn't need much repair work, and you're interested in doing Sec 8, you could do very well from a cashflow perspective in Norristown, and hope the appreciation comes one day. If that happens, you'll look brilliant or investors may be asking the same question about Norristown 20 years from now. Proceed with caution.    

Norristown is a great cash flow opportunity. However, I would not project any property appreciation during ownership. Many tenants in Norristown are Section 8, and the Montgomery County Housing Authority, which administers the Section 8 program is located on Main St. in Norristown. You can certainly get much higher rents renting to Section 8 tenants (subsidy + tenant portion), but you'll also have to pass a Sec 8 home inspection and deal with other program compliance. The local building department has a reputation for being challenging to work with, and many homes/parts of Norristown have historical designations. I would avoid any historic property, as your renovation costs will be several times more expensive. Also, be mindful that Montco has extremely high property taxes.  

I've been looking at Multi Family in West Oak Lane. Put in an offer last month on a 2 unit 1br/2br, which was not accepted. The 2br had a long term tenant paying $850 and the 1br needed some work (vacant) i was assuming $700 in rent after reno. There are not a lot of rentals in this market, which I interpret as a positive, compared to a glut of cheap rentals in an area like Germantown where I've also been looking.  My feeling is this area is more stable than other's at similar price point - less crime, more homeowners. 

What are your plans for property management? 

I've been look a lot in the Germantown area as well. Price points are reasonable, and lots of multi family listings. Locations closer to Chestnut Hill/Wissahickon Valley Park are really quite nice. Commercial areas (Germantown Ave/Greene St.) seem depressed at the moment, but it's easy to imagine more bustling streets with nicer retail, restaurants and bars. Rents are pretty low, but I'm optimistic they will increase with time as the area improves. Germantown also has an intriguing history, and many historical landmarks. Curious if others see similar upside in Germantown?