All Forum Posts by: Maneesh Joshi

Hi @Joe P.

I appreciate you taking the time to look this over.  I can totally get where you are coming from.  So I think to be better to  give you the actual numbers I had:

purchase price is 220,000. The mortgage I got was 4.49% at 20%, I would of had to have paid 1% point at closing to get that rate. 

My cash in was 53,750 (20% down and including closing costs, transfer tax, point, etc)

My mortgage (176,000) monthly payment is $890

taxes, at this point were 1k but I was going to assume 2k to be conservative/proactive.  So with tax, insurance I was at 1130

I took the conservative approach for monthly rent(1500) as it is the end of the year so its a bit harder to find quality tenants. I think I could of gotten 1600 during peak season. 

So my thinking was that 1500-1130-100(management fee)= 270 would be enough to cover any Capex, Maintenence and vacancy and keep me at break even for the first few years and then bank on long term appreciation in the area and also the increase in rental income.

My inital goal was to keep it for 5-10 years and at that point see if it makes sense to sell.  Now that I have dropped out of the deal I think I could have gotten a better price for sure.
 

@Jimmy O'Connor  Thanks so much for you insight.  What you indicated is what I was thinking as well.  Yea I am betting on appreciation in this area vs. making a huge cash flow at this point. 

@Joe P.  Also thank you for your insight.  Just to give you background on what I am looking at...I was close to buying a place a few weeks ago but fell through due to a major issue in the final walk through. The place would of been bought at 220k and was about 4 years into a renovations so the place was good but not amazing.  With all mortgage, taxes, insurance would be about 1050 a month and in my research I was seeing about 1500 in rent that I could get.  For me if I can get about 300 in cash flow to save for expenses and maintenance that would be fine and hopefully see the property appreciate.  I also anticipated that taxed will be going up considerably once purchased as well.

I think 250-270k is definitely the price point right now for a newly rehabbed property that has been properly permitted as well.

Hello,

So I am planning on buying a rental property in the point breeze area. I plan on buying a property that has been recently renovated so is pretty much ready to rent right out of the gate.

I wanted to see if people who currently have rental properties in the area are fairing? Is there anything that you did not expect? Was there any areas of the neighborhood that you would avoid or inversely focus on? Most of my search has been on the border of PB and Grays Ferry.

Also, I was curious as to what type of renters you are seeing in point breeze. Are they mostly couple or families, or roommates? Are most of your renters older or younger that work in center city? Are there aminities in the rental that are must have to maximize rental income(ie central AC, finished basement, outdoor space...etc)?

Appreciate any insight.

Hello,

So I am planning on buying a rental property in the point breeze area. I plan on buying a property that has been recently renovated so is pretty much ready to rent right out of the gate.

I wanted to see if people who currently have rental properties in the area are fairing?  Is there anything that you did not expect?  Was there any areas of the neighborhood that you would avoid or inversely focus on?  Most of my search has been on the border of PB and Grays Ferry.  

Also, I was curious as to what type of renters you are seeing in point breeze.  Are they mostly couple or families, or roommates? Are most of your renters older or younger that work in center city?  Are there aminities in the rental that are must have to maximize rental income(ie central AC, finished basement, outdoor space...etc)?

Appreciate any insight.
 

Hi John,

I appreciate your insight.  The real issue is not the physical fixes but the water that leaked for potentially 2 weeks.  The dining room floors were completely destroyed and could have leaked down to the basement.  As I indicated in my post above I am going to ask for specific stipulations be met if I am going to move forward.  If they are not met then I will not move forward.  Based on your experiences would you ask for anything else?

Thanks John for your insight.  The property was rehabbed about 5 years ago so was in good shape and turnkey ready.   I spoke to my agent and we are going to back to them asking for a contractor that we can communicate with directly and also will provide a itemized invoice of what was done.  Also, we will want a warranty on the work done including a new floor.  I also am asking for the house to be tested for mold and certified that it is mold free.  We also will have the right to back out once we go in to inspect it.   Only if all of these stipulations are met will I think about moving forward.

Hello All,

I am in the process of buying a rental property in Philly and I live out of state. We were to close today so I had my agent do a final walk through yesterday. When he got there he found that the bathroom on the second floor had been leaking and water accumulated in the first floor ceiling and finally broke through the dry wall spilling water onto the wood floors below. From what we can see it is possible that its been leaking for weeks.

Has anyone come across this before? What did you do? Did you back out or renegotiate? The seller is going to make the repairs now but not sure what I want to do.

My gut is telling me I should back out. Water damage is pretty serious and who knows how the work will be done.

If I do go ahead and have them fix the issue should I ask that I be given the invoices of the work that was done? Should I have them do a mold analysis? I would want them to replace the wood floors and also check to make sure that the recessed lighting wasn't compromised.

Is there anything I am missing?

Appreciate any insight.

Thanks!

Hello All, 

I am in the process of buying a rental property in Philly and I live out of state. We were to close today so I had my agent do a final walk through yesterday.  When he got there he found that the bathroom on the second floor had been leaking and water accumulated in the first floor ceiling and finally broke through the dry wall spilling water onto the wood floors below.  From what we can see it is possible that its been leaking for weeks.  

Has anyone come across this before?  What did you do?  Did you back out or renegotiate?  The seller is going to make the repairs now but not sure what I want to do.

My gut is telling me I should back out.  Water damage is pretty serious and who knows how the work will be done.

If I do go ahead and have them fix the issue should I ask that I be given the invoices of the work that was done?  Should I have them do a mold analysis?   I would want them to replace the wood floors and also check to make sure that the recessed lighting wasn't compromised.  

Is there anything I am missing?

Appreciate any insight.

Thanks!

Hi @Basit Siddiqi-  I appreciate the reply back.  From everything I am reading it looks like I would need to apply for the BIRT as well since I will be applying for a commercial activity license.  I think what is more confusing is the stipulations in the exemption section that indicates... 

"Beginning in tax year 2016, there is an exemption of the first $100,000 in gross receipts and a proportionate share of net income from the Business Income and Receipts Tax".  I will not be making any where near that amount in rental income.

Also, What do you mean when you say "file within the city for the BIRT?

Thanks!!

 

Hi All,

Just looking for some general guidance. I am in the process of applying for the Philly Tax account number online (to get a rental license) and one of the screens ask which business taxes apply to you. I know that the "Net Profits" applies for sure but I was wondering if I needed to click the Business Income(BIRT) one as well. It seems like I would need to add this one as well but in the description it says the first 100k is exempt and since my SFH will not be even close to earning that much rental income do I need to apply for it? Just wanted to see if others have come across this issues and how they handeled it. I am just have one property as a indivdual that I will be renting out.

I totally understand that this is not tax/legal advice but thought it might be nice to get some experiences of others.

https://www.phila.gov/services/payments-assistance-taxes/business-taxes/business-income-receipts-tax-birt/

Thanks,

Maneesh