All Forum Posts by: Keith W.

The justification for appreciation you mention are not new to the area.  Historically (except very recent national market dynamics) appreciation in 19401 has been cyclical at best.  I am not seeing market changing news that will drive appreciation in Norristown specifically. The very tight supply now has had a dramatic impact on pricing.  When supply and demand rebalance what will make Norristown stand out vs other nearby markets?   I think Norristown is a better buy and hold market. That is the way we underwrite deals in Norristown.  And to be honest, we have sold most of our Notristown portfolio and are sitting on the sidelines for now (WRT single family).  

Anthony,

I have rental properties in Norristown and have dealt with the transfer and rental inspection many times.  You actually don't need the U&O at the time of sale but instead can file a form with the Borough committing to having the inspection and making the necessary repairs.  I have done this even when the house is currently rented.  I would suggest in your case you explain your situation to the Building Code manager (contact info available at https://www.norristown.org/180/Building-Code-Enforcement

Offer a plan that may include:  1. Submitting the form that says you will have the inspection and make necessary repairs.  2. Start the listing process.  3.  Bring the house up to the rental license standards if not already.  4.  Get the chimney and heating certificates (probably can be done with the current restrictions).  5.  Apply for the rental license which is another form.  6.  Get upfront agreement with the code office that you will put tenants in now and schedule the required inspection as soon as possible when the code officers are working again.   Happy to give you some pointers off-line on the inspection process.

Jeff- First let me congratulate you on getting this close on your first property. You are asking some great questions and getting some good feedback here. I'll add my two sense as an investor in Norristown (not sure if you are investing in Norristown or Pottstown). It looks like your financials are based on the current rent of $850/unit. You mention that with minor improvements (within your $5500 rehab costs??) the rent could be $1000. Do a proforma operating statement based on the improved rent. Use a CAP rate appropriate for the area and re-value your property based on the improved NOI. That will give you and idea of the value creation opportunity. As a new investor I would caution you to be conservative with your occupancy rate or maybe more accurately- your rent collection rate. For a new investor, these can be challenging markets. Sometimes when a tenant does not pay you can get mad, take them to court, win, file judgements, etc, etc. But if they own nothing and have no money and transient work you will not collect. Tenant selection is important. But this can be managed. Also don't underestimate the cost of doing business in Norristown. (not experienced in Pottstown). Licence fees just went up (you will need 3 rental licences) and they have increased inspection on rental properties to 2-3 per year. These take time and money to deal with.  For our business, I look for what may be more value add opportunities.  Buy a little lower, rehab a little more and refinance to reduce the equity trapped in the property.  Also seems like your financing terms are quite liberal....  Good luck!!

Hi Cassandra,

We own properties in several different historic areas and you need to be aware that they do vary.  Even within a specific historic district there can be different zones which have different requirements.  There is probably a local Historical Area Review Board (HARB) or similar body that governs the requirements and reviews permits that may potentially impact elements that have historical value.  I would start with contacting the local building code office and ask about their process for issuing permits in designated historic districts.  Ask for specific contacts on the HARB and see if they have a website.  Depending on the scope of the exterior work, it may be beneficial to hire a local architect that is familiar with the specifics of the local requirements.... and they may have contacts to help ensure the review and close-out process goes smoothly.  Good luck!

Hi Michael.  I use local contractors to do everything.   But I have found it difficult to find good, reliable contractors.  They are out there.  It is important to be clear about your expectations with them.  Some investors push them to do the cheapest work possible (bandaids) and others overinvest.  The level of craftsmanship and materials can vary quite a bit.  I have found that it takes a few jobs to get in sync with a contactor for these types of repair work.

Thanks Andy.  I will look into them.  

HI all.  I am looking for recommendations for a GC to do interior and exterior renovations on 8-10 unit multi-family property.  Property is in the Salt Lake City area (Avenues) Work will begin by end of year.   Would love to follow up with you about how you used the GC and talk about your experience as well.  Thanks!

Thanks all for your help. I am doing due diligence on a multi-family property. Owner has provided copies of all the leases which shows the security deposits paid.  I feel like I should have something from the tenants acknowledging their agreement that the security deposit is correct or maybe that the lease provided is accurate.  Is there a specific process for doing this.  Is this typically part of due diligence or just in the Purchase and Sale agreement and to be provided ahead of closing. It is a property with <15 units.

Thanks

I have been holding some land parcels in Cape Coral since 2006 or so.  I am ready to sell them for multiple reasons.  I am interested in your thoughts on how to sell them within a few months without just giving them away to a wholesale broker.  I get letters in the mail every week with offers to buy them at no cost to me..... and no proceeds to me.  Thanks for  your thoughts on how to get them sold.  Thanks

We have two section 8 tenants in Norristown.  I find the inspections to be reasonable but trying to deal with them with tenants there is a challenge.  Each year I  have holes in walls that need repair, screen doors broken, missing screens, dirty walls and heavily soiled carpet as examples.  I have found the initial inspection, prior to move in, to be fair.  I was very frustrated getting my last tenant approved and able to move in.  The Montco Housing Authority took 3-4 weeks to review the application and authorize the inspection to be scheduled.  Overall, I lost more than 1 month rent given the extended move in process.  Good luck.