All Forum Posts by: Jon Sanborn

@Jimmy O'Connor this was awesome. Well written, and entertaining! I can picture the Miller Highlife and Marlboro scene so clearly. 

@Mauricio Botero Make to reference Philadelphia's zoning code because overall lot size (not just width) will matter for how many units you can put in the property 

https://www.phila.gov/media/20200213115058/NEW-ZONING-GUIDE_2020.pdf

@Dan L. I do an initial phone screen, where I can find out pretty quick if someone is qualified. I had someone tell me recently 'I'm thinking about opening up a salon.' I immediately was like..'You're thinking about it?' Yeah no, sorry. So basically on the phone I ask "Tell me about yourself, your past business experience, how long, etc" Ideally, we will (and finally have) find people who currently run/own a salon and are looking to move locations and expand their business. I also tell them we will be checking credit, background, and income. 

Once phone screened, I show them the place, and if they like it, have them apply. We ideally want to see at least a 600 credit score (our salon isn't in center city philly...so we have to be realistic with this, typically we want to see 650+), a clean background, and income/savings that is substantial. Usually with our residential rentals, we look for 2-3x the rent depending on the area, but with the salon we look for 3-4x the rent, plus savings. We ask for tax returns and bank statements to check this info. 

A huge factor is experience, though. If the tax returns are from a different job, they don't hold nearly as much weight as they do from someone who has ran a business and their tax returns show exactly how well the BUSINESS has, can and should do. 

Our space is about 1,200 sq ft 

@Mayer M. @Kyle Altenau totally agreed about the landbank. I used to go to the sheriff sale and they would scoop up so many valuable lots and wouldn't allow bidding to the public. Then stuff like Kenyata Johnson and Ori Fiebush happens. So corrupt on so many levels.

@Troy Sheets Interesting about the water pressure. I never knew that. As far as sprinklers in rehabs, is there a hard and fast rule used? I've heard everything from 'depends on the level of rehab' and 'depends on how many units' and 'depends on how far the exit is from the farthest away point of the building'. I know 3 units and up require the hardwired smoke/fire alarm with horns and pull stations, but not sure about the sprinkler. 

@Alex Capozzolo are pursuing a 4 unit building, but the lot size only allows for 3 units. The building was previously approved for 3 units and an educational learning center in 1978, (so 4 total units but with one of them being used for commercial use), so we are curious if the city will make us go through zoning, and with that, add a sprinkler system to the building. 

You can only apply and receive the tax abatement with permitted work. 

@Alex Capozzolo @Deniz Eker Norris Square is solid. The more south you are the higher the price point but you’ll be able to attract a higher class tenant than if you were closer to Lehigh, but the price point is lower there. And like so much of Philly some blocks will be better than others. All depends on your goals. 

@John Mano Yep, you're in the same situation. Definitely prepare for when you do replace the meter for there to be a back bill. 

@Steve Babiak There is a meter installed currently, but its not accurately reading usage, so yes, he has been paying on an estimated bill since he bought it in 2016. Like you said, its a mess. The seller refuses to escrow anything over $5k (which isn't enough for the potential risk for us or the title company to feel covered) So we are going to end up extending 3-4 months and just get a new meter installed  

@John Mano That is a million dollar question. Ask anyone who works at the PWD and you won't hear the same answer twice. That's why there's a high risk involved. The water department is one of the most difficult/corrupt department to work with in the city. I'd love to know the answer to your question. 

Thanks for your responses guys, I'm Alex's partner on this deal.

@Yuriy Skripnichenko I've had to do the same thing you mentioned for different properties I purchased at sheriff sale in the past. Take the paperwork to the sheriff's office, to then get more paperwork, to then go to PWD, L&I, etc to get the file totally clean. As @Steve Babiak mentioned, why the seller hasn't done this in the last 4 years in concerning. Does he know something we don't? Maybe. What makes it tough is I can't go to the sheriff's office or the PWD right now to try to get more info with the shut down. If we could guarantee that when a new meter is installed that the back billing will only occur from 2016-present, we would be more comfortable closing the deal since we can get the seller to escrow $5k. (he has been paying on the estimated bill, and its a 3 bedroom with no laundry) BUT, the big unknown is if the PWD will try to back bill from the last ACTUAL meter reading, which was 12 years ago, since the foreclosure file is lost with the city. That is what gives so much unknown and uncertainty.