All Forum Posts by: Kyle Altenau

I have a multifamily property in Asbury Park, NJ. I have one vacancy that I luckily got an application on last week before things started getting really crazy. Unfortunately the tenant didn't actually sign the lease until Monday, so we couldn't call for the CO inspection until then. By this time, all inspections were halted. So I figured they'd offer a temporary CO in the meantime. Basically they said, no move ins without CO's and no CO's are happening. 

My business partner also owns a construction company. He has several projects that are halted because he can't get inspections done. 

I assume other people are facing similar problems.

Has anyone experienced their local governments coming up with creative solutions to these issues? I'd like to go back to the city with some ideas on how to solve this while still respecting public health. The only thing I could think of was making Skype appointments or something similar to walk inspectors through the property, but I think that'd be incredibly difficult for the inspector to fully do their job. But maybe they could do it just as a temporary CO until things get better. 

@Jordan Boley from what I'm seeing a lot of banks are being inundated with loan requests too so they see no reason to go along with the treasury anymore. They have plenty of potential business so they aren't getting aggressive on rate. If you look at when I made my initial post it was at the lowest though. 

Hi Sanise,

I've been investing in Real Estate for a few years now and am actually doing this for the first time right now. I know it's kind of backwards to invest in properties than further down the line "house hack" but that's just how circumstances played out for me with my current home. 

As far as I am aware (and I'm not a lawyer) you'd be in default on most mortgages if you went in as a primary residence, then converted to investment property. If you continue to pay your mortgage on time and there's no issues, it most likely wouldn't be an issue, but it is a risk factor to keep in mind. I guess that would be the main con, that and the lack of liability protection you get from owning it in an LLC.

The pros are that it would no longer show up on your personal credit and debt to income calculations for other credit purposes. Lending parameters aren't as good, but in this environment there are still attractive options available. Banks are a little overloaded with refinance requests from my experience (mostly working in NY, NJ, PA) so without previous relationships it may take a little while. Just try and be patient. 

As a general rule of thumb, any asset you buy that is stabilized will have less return than a distressed property. There's two main reasons. The first being the most obvious, that it's just easier owning a stabilized property. The other being that, there are plenty of attractive financing options for stabilized properties vs distressed properties. 

If you're going to look only at stabilized properties, just adjust your return expectations appropriately. If it's your first park, it might be safer to invest in a small stabilized one first, then look for something on riskier (distressed) side next.

Hi Cole,

I've used hard money to do multiple deals in Philadelphia. The majority of which were flips, but I did refinance some as well. I think Brewerytown is a good place to start looking. The areas that @John L Desimone mentions are good, but the thing to keep in mind is lender's appetite as well. A lot of lender's in those areas aren't getting very aggressive, so you might get better cash flow, but you also will get less leverage. 

These days I'm also lending in the area, so if you had any questions on how I or another lender would underwrite some of these deals, I'd be happy to work through some scenarios with you.

It depends on a lot of variables. Including but not limited to, leverage, your skin in the game, how they're secured, length of the loan, what type of asset and what type of condition it is in. It actually varies by region as well. I'm in the north east where rates are typically lower than the rest of the country. 

The big thing to first figure out is how they're being secured. If they're providing debt, the return would be much different than if they're providing mezz or pref/equity. Next. How much leverage are they going to provide? The higher their investment to the current value and end value would theoretically increase their return. The amount of their investment vs yours should also affect their return as well. 

Hard money or commercial bridge is probably the avenue you'd want to go for a temporary fix with as much leverage as possible. 

It's difficult from afar and not having lived there. Make sure you are using a knowledgeable Realtor that you trust. I'd just make sure to really vet the comps that you are using. If the lowest comp is the one on your block that could be a flag that the other comps are in a better area. Look for neighborhood boundaries as well. Those can be major streets or railways and things like that. When I was investing in Fishtown/Kensington, north of E Lehigh Ave was a major price drop off. I believe there's been a lot of investment there recently, but not while I was working there. Or N Front street. A few years ago if you went 2 blocks to the east you'd be almost 25% or more price difference than 2 blocks to the west. If you ever have a specific question I'd be happy to share any insight I may be able to. 

1 and 2. - Both are going to be commercial. You are in a commercial asset class. 

3 - It may be hard to convert depending on what district you are in. You'd need to demonstrate that there's no demand for commercial uses there, which would be difficult to do with a paying tenant in. There are other ways to argue for the variance as well. You'd definitely need to discuss with a zoning attorney

I used to invest in Philadelphia. The one thing that I'd warn against about my experience with Philly is that the market can be extremely block to block. People would send me comps that would be only 1/4 mile away, but without understanding of the neighborhood didn't realize that they'd never get that price for the home. Aside from that I still feel that it's a great city to invest in, but deals are certainly harder to come by these days. My last deal there was in 2016.