All Forum Posts by: Lloyd Preece

Going to reopen this one just to provide some information after going through some of this. The rules are pretty complicated and the only people who really know all the terms and rules thoroughly are the Rent Levelling Board.

Caveating that I’m not an attorney so go seek your own advice but I clarified a few things at a recent rent levelling hearing (which are open to the public and you can find the schedules with a simple Google).

Once you take over a property as an owner occupant, if it is a single family or condo you can live in it for 1 year and that automatically exempts your unit from rent control. You can then rent at market rate but have to register it with the town annually and abide by their annual inflation rules. That then registers the property at a new “base rate” and your future rent increases all be “base rate” + Inflation as guided by the town.

If it’s a multi, you have to live in it 5 years to fully exempt the units. After 2 years you can apply for a “Rent consideration” (I think that’s what they called it) as long as you still live there and that may allow you to increase rents by more than the annual allowance (probably designed for unit that are very low rents). Until then you are supposed to stay at the base rent levels that the units are registered at the time you purchase, and only increase by their guided annual inflation numbers.

Regardless you are supposed to always register your rental unit with the town annually, and be subject to their rent control inflation numbers. STRs are not allowed. Not sure about MTRs.

My general conclusion was that it is tough to do business in the town if your goal is to buy property as pure rentals out the gates and no intention to occupy. If you have offers out on properties, make sure you understand the rent control levels they are under before you buy. The town is encouraging home ownership, so buying a condo/single, living in it for a year plus and then renting out works fine here (what I did), whilst house hacking a multi is more complex.

This is a great post. Curious though @Jonathan Greene , at what point in your property ownership cycle should one of your assets qualify to be evaluated/ranked like this? Point being that property you acquire 1-2 years ago is likely to be subject to deferred maintenance and capex, so their "long term" performance in rankings 1), 3) might skew poorly in year 1-2 but may pickup  after you've found and fixed all the hidden issues.
I know if i did this exercise across my portfolio, the recently acquired ones wouldn't be fairly "stacked" because of all the year 1-2 cost build up from what the seller deferred, but have good chances at being future performers in years 3-5.

Maybe that's why you have 2) and 5) but curious your general thoughts here are for evaluating this. 

Thanks Kate, lets catch up next month. I may have a JV opp that requires mgmt

Hi all, I was looking to speak to a few property managers in the Scranton area. Does anyone have experience in this market and can recommend good local managers?

Would second the sec 8 piece. Guarenteed payments on the 1st, keeping up with market rates and mutual interest between the tenant and landlord to keep the property in good condition and to keep the tenant living there. 

Lehigh Valley is a great market, plenty of Multifam options in Allentown, Bethlehem and Easton. North/West Bethlehem and the historic areas of Easton are going to be the nicest (but also most expensive with least cashflow). Southside Bethlehem has a lot of redevelopment happening and Allentown is mixed, with west of 13th st as quite a nice area, a lot of redevelopment around the PPL centre but a lot of run down areas too. LV is huge and has a ton of jobs across manufacturing, education, health care with a few colleges, hospitals and warehouses driving employment, not to mention the proximity to NYC and Philly and potential Amtrak links in the future. Whilst theres a lot of options the problem at the moment is low inventory and prices that have remained high despite the huge increase in the cost of money. A couple of years ago you could easily pick up cashflowing properties out the gates, its still possible now, but is much rarer and typically involves value add to get you there. However @Shawn Mcenteer is right about not needing to cashflow out the gates, you should be thinking about your investments as a long term game. This blogpost on Mortgage rates and if they really matter to long term investors, might help giving you some context https://www.biggerpockets.com/member-blogs/15238/101444-do-m...

Seller typically pays all agents commission both buy and sell side.

If you are a new investor i would highly recommend using a buyer agent who is investor friendly and knows the market, a good agent pays for themselves many times in ROI and is especially helpful for newbies. The only time i would consider using the seller agent for a transaction is if you are experienced in deals within that market, you know the market very well and have no need for someone to look out for your interests. Also, if you are sure that by using the seller agent to buy, that it shaves of part of the price or it assists you in getting a competitive deal.

That being said, the agent fees cost you nothing as the buyer, and even if the seller agent represents you in the deal, they still have a licensed duty to get their seller the best offer possible, so if you think it'll help you get a deal because youre persuading the agent, it's worth rethinking!

Also interested in this if there are any wholesalers in the area

@Bob Stevens there’s a happy medium between undertaking education and moving forward with an investment. Yes you need to avoid analysis paralisis and be strict about having a time period set whereafter you begin making offers. But books and podcasts go a long way to gathering base knowledge, personally I found 6 months was right for me, but that will differ person to person

Only seen HELOCs on primarys, however i do remember David Green saying his team had HELOCs on rental properties a few weeks ago so maybe look at his lending business