All Forum Posts by: Account Closed

I am about to buy my second property (a commercial mixed use space) in the neighborhood I invest in.  It's mostly a blue-collar area, but in the beginning stages of being touched by gentrification.  As a female investor who has worked in nonprofits and community organizing for most of my adult life-- and hopes to start a brick & mortar business in this next project, I am doing my best to make sure that the moves that I make are working to revitalize the area in a way that is equitably beneficial for me and for all of the longer-term residents and business owners in this pocket.

Other than volunteering and partnering up with local organizations, I wonder if anybody has any creative and viable solutions to effectively engage with and become a part of the community.  I'm also interested in hearing/ reading any stories (successes and failures) about investor interactions with preexisting communities.  What not to do is just as important as what to do!

Thanks @Andrew Postell.  I think I was maybe too vague in my post.  I am in no way suggesting that I am or would ever skimp on the rudimentary bones and systems for my rehab.  I was thinking more along the lines of design and finishes that look fancier than they cost.  I guess you're right that I should post in a more PA specific forum but I am new to this (2nd post) and haven't yet learned all of the intricacies of the BP world.

I'm in the process of acquiring my 3rd property which is going to need quite a bit of work.  Aside from sprucing the mechanicals and a few cosmetic items inside, I think I'm going to have to replace the storefront facade (rotting wood around crappy windows & some water damage).  I think I've secured adequate financing to cover the items I plan on fixing, but I am also interested to hear if anybody has any good books, resources or advice on ways to cut corners on expenses without loosing too much in quality.

Not to troll the beer-soaked troll, but to respond to your mic-drop @Paul Schemm, most of us haven't been investing and flipping for a long-time. I think BP is good for newbs to network, build energy, and yeah--to an extent, to rip off and duplicate the "magic formulas" stumbled upon by others.

1. RE: seller financing - It's is a lot easier said than done.  I'm based more in blue-collar areas where the folks that sell their homes need the lump sum from settlement in order to move on & survive.

2.  RE: distressed landlords - good luck getting close enough to a house with an eviction situation going on to even make an educated guess at the situation you are inheriting by "taking the problem" off of the current owner's hands.  The evictions I have dealt with often require full-gut rehabs in addition to either forcefully bouncing squatters from the property or waiting out the 9-12 months it takes our city to follow through with these court cases.

3. RE: selling your services- this requires proper licensing & a whole shitload of energy and resources to do properly.. and doesn't really fit into what our the conversation was about in the first place.

4. RE: commercial real estate- the pandemic devastated the brick & mortar economy.  Commercial real estate is "taking a poop" because in order to finance a commercial property, you need to have either a fully leased building that you're buying (99% of owners with a fully leased cash-flowing commercial property aren't going to sell), or have your own personal business that has been successfully up and running, cash flowing and making money for at least 2-3 years which you can claim will fill the commercial space.  Again, for newcomers to real estate with smaller portfolios, less liquid cash & experience, this angle of the market is next to impossible right now (believe me-- I've tried it from multiple angles over the past year and a half.)

Thanks for sharing your pointers on how we can all hustle a little more in the creativity department.  Definitely food for thought, but I just had to counter with some reality from my experiences so far.

It's definitely a sellers market right now.  A lot of my friends are liquidating their assets and waiting for things to turn around.  Plus, yeah the costs of materials alone are up over 300% from what they were a year or so ago. I still think it's possible to find some good deals in the rougher spots. 

Some of the neighborhoods in Philly are so inexpensive to buy and cover (taxes & insurance-wise), I've also thought to buy these types of houses just to board up & wait for things to change.  For example, in the area in Kensington a lot of homes I've looked at are bought for $15-20K in 2015 & were resold in the last year for $70-100k-- as they were purchased / with no work put into them so sort of like long-term wholesaling...  It's not the greatest strategy, but it's a decent turnaround for minimal effort.  Or you can always put your money in bitcoin because, yeah, @John ODonovan, crypto is pretty lit right now too!

@John Baker yeah I am very familiar with Kensington & I have a lot of faith in its eventual turn for the better. This wasn't actually a flip. It was a BRRR. I feel confident that within 3-5 years it will definitely appreciate the way my house in South Kensington did between 2015-2018. Do you invest mainly in the 19134/ 19125/19122 areas as well?

Investment Info:

Single-family residence buy & hold investment in Philadelphia.

Purchase price: $55,000
Cash invested: $37,000

full gut rehab needed new plumbing, electric, HVAC, patched floors, redid drywall & trim (& paint), exposed some brick, all new appliances, ripped back end off of he house and rebuilt it, re-poured patio, replaced bathroom and added two half baths

What made you interested in investing in this type of deal?

This deal interested me because was tiny & cheap enough-- with good bones-- to seem like the perfect opportunity to learn how to do a little bit of everything.

How did you find this deal and how did you negotiate it?

Found on the MLS. It was listed in March of 2020 at $69,000 and I held out and offered a low offer in June ($50k). After some negotiations, we settled at $55k close as quickly as the title could be cleared, waived all inspections.

How did you finance this deal?

I used cash from savings and a little extra $ from a home equity line of credit on my primary residence. The rehab was financed through a mixture of the HELOC $ and some house hacking on the primary.

How did you add value to the deal?

I cleaned up the floors and walls since I thought the original wood and brick were pretty & saved some money there. I did most of the labor myself with some help from family & friends. The biggest ticket items were the demo/ rebuild of the back end of the house & re-pouring the patio ($6k), the HVAC system (ductless mini-splits $8k), drywall & paint ($4k with materials included), and the spray foam insulation which I did on the roof and exterior walls of the building ($2,900).

What was the outcome?

The house is a tight little place! It looks good and it feels very comfortable. There is a lot of natural light inside and the back yard which was a total nightmare is now the nicest feature of the place. The patio downstairs is clean and comfortable with a hanging swing and we built a wrap around deck off the back so that upstairs has just as much outdoor space.

Lessons learned? Challenges?

SO many lessons were learned. Mainly, the absolute dire need to hash out every single detail of materials & ordering, timelines and payment schedules with my subcontractors. There was a lot of money lost on shipping & handling costs which I would & could have avoided if I had looked more closely at certain items. I also learned that it's actually in some ways much more difficult to work in/on a smaller house than a bigger one-- design-wise and also finding space to keep materials & to work!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

My father, Richard Stoler (a realtor with Key Realtors) was really great and has 30-40 years of detailed hands on knowledge of historic reconstruction. He was great to run things by, and also wound up being the main contractor working with me on this project. I don't know that he would do the building part again, but he is an incredible reference if you're interested in working on / restoring older properties.