All Forum Posts by: Kerry B.

@Elise Bickel Tauber

Thanks!

I was wondering how one would turn a 2 room studio into a legal one bedroom in Philadelphia? Just moving the bedroom to a different location with windows, a door and a fourth wall? Would this require a permit? If I move the kitchen to where the bedroom is, is it mandatory for the kitchen to have a window?

You can, if your contractor is available and can look at properties at short notice. It also depends on the condition of the property you're looking into. We've had our contractor look at, and give us a quote for properties we were interested in, but he is very busy, so we've tried to limit the number of places to ask him to look at.

You could also have a "contingent upon inspection" clause, and have an inspector come out and assess the property once your bid has been accepted and use the report to gauge your next step. I would say though, in competitive markets, many people skip the inspection. Lots of variables with that. 

We're going to close on a property where we've skipped the inspection this time around. This is because the photos and properties look sound, neighborhood is legit, we've worked with this realtor before, and furthermore we're anticipating spending $20K-$30K on the rehab. The market is also very cheap to rebuild from scratch if need be, so we use that as the absolute worst case scenario to gauge costs.

Yup. Just did it. You could always have a realtor do video walk-throughs. Our strategy is to intentionally buy beat-up properties that need a good amount of work done to force appreciation, so not a huge deal. We also know ball-park costs for a worst case scenario. 

If you're looking for a ready to go property aside from the standard cosmetic work you'd generally do any time a tenant moves out, I'd advise a video walk-through.

Anyone know of any PA/Philadelphia lending institutions that will offer 90%-100% cash out refinancing?

I am trying to decide between keeping wood panel walls or drywall. Drywall seems very expensive and we want to get a decent ARV. I am just unsure how much wood panel walls vs. drywall impacts ARV.

Contractor is suggesting we turn a 3 bdrm property into 2 bdrms with a larger bathroom and more closet space in the master bedroom. Our goal is to BRRRR and get the maximum ARV to move to the next thing. How will this impact the financials?

Our property manager (who also recommended this contractor) says it will rent for the same money and your property will be better taken care of b/c most likely the tenants you'll attract won't have kids and that the ARV will be the same, or marginally lower.

What's been your experience? Property is around 950 square feet and when our agent sent over comps, another 3 bedroom property 1/4 mile away that was 900 sq ft. had a great ARV and we are essentially going to replicate what they did there...with the exception of finishing the basement b/c that adds marginal value. Would love to hear your thoughts?

I'm looking into a 3 bd house that is under 1,000 SQF and the bathroom is rather small and can only fit a standing shower. Contractor is suggesting we convert it to a 2 bd to make the rooms larger, and more importantly, the bathroom nicer and able to fit a full sized tub. Will this lower the ARV b/c there are less bedrooms?

We're rookies so I'm trying to understand how this will impact ARV. We looked at comps and one house about 1/4 mile away was a little smaller than ours, with 3 bd and it had a really good ARV. We'd be looking to mimic the design/fixtures, etc. Only difference is they finished the basement and we won't, but from what I've read, a finished basement will only impact the ARV by 10% max on average.

We also don't want to go too crazy with the changes b/c we don't want an astronomical renovation bill. I told my husband that the bottom line is that the #s need to make sense.

 

I'd advise you to not tell a lot of people right now. Learn the ropes, do your due diligence, and let the results speak for themselves. We haven't told most people yet b/c they don't understand enough about it and we know they'll have lots of opinions. We've only really told other fellow investors/people who understand the ropes. We'll stay mum until we've had a handful of successful deals and then eventually mention it. Sometimes it's better to build in silence than to go yapping.