All Forum Posts by: Maurice Etienne

Hello all, my business partner has a personal residence that I would like to purchase. He is a few months behind on the mortgage and I plan on renovating and using as my primary residence. are there any regulations or restrictions I should be aware of in terms of this potentially not being considered an arm's length transaction? If we agree on a price that is below market? what are the tax implications? any price we agree on would be enough to make his mortgage company whole and to give him some cashback as well.

Hello All,

I'm hoping someone can recommend a Philadelphia area banks/credit unions that provides lines of credit and what their criteria may be. This is to fund a small renovation, about 15-20k. Thanks for any recommendations or suggestions on other ways you think I should fund it. 

Thanks for the tip @Ley Nezifort . The job isnt too big. It's about 900 sf rowhome. Wanted to get it to rental quality for down the line. I wanted to get an idea of what would need to be done now, in the medium term, and in the long term. Not expecting to do a full gut rehab.

Hi All. I am putting an offer on a property in West Philly, right near the Philadelphia Zoo. The house is dated but not in need of a complete tear down. Does anyone have any contractor recommendations to do a walk through and bid on a medium sized renovation. Would probably want several numbers priced out, cost to finish the basement and all of that. Really looking for someone to do a consult on the house really. Thanks for any recommendations you may have.

Good Afternoon Everyone, I am working towards a deal and will be looking for financing to purchase and a cash out refi after about three months of some capital improvements. I can probably push the refi out to 6-12 months if the lender has seasoning requirements. The deal is in the Philadelphia suburbs (Montgomery County). Does anyone have a good lender, portfolio or otherwise that they can connect me with. The property is a duplex and doesn't need much work except the septic/holding tank might have to be replaced. My goal is to finance the purchase with a short term loan and then refinance once the capital improvements/small rehab has been completed. Thanks for any recommendations you have.

Hi,

I am currently an investor in the Philadelphia suburbs and I am trying to hone in on my next property. The problem is that in this area, real estate taxes vary widely and so does transfer tax. As I am close to and willing to invest in Delaware, PA, and NJ, this calculation becomes even more of a headache. Transfer taxes range from 0% (in NJ) to 2.139% (in Philadelphia). These numbers are what's required of the buyer. There are places in the region that have high transfer tax but low real estate taxes and vice versa. I wanted to see what the BP community's thoughts were on which I should aim for. Since this is an investment, I am always factoring RE taxes into my hold calculation but the risk of being in a high tax area is a bit worrisome as taxes have the propensity to raise faster than rents could keep up. But if I am being honest I kind of prefer higher taxes to higher transfer taxes because I can do my best to past this recurring cost on in my rental calculation. Where as a higher transfer tax is harder to recoup. Also with low transfer taxes, I am able to obtain a higher cash on cash return.

With all that being said though, it seems hard to justify a yearly 5k difference in property taxes (Philly vs NJ) to save 4k (based on a 200k property) in upfront costs. I would love to hear what you guys think about this.

@Joseph Scorese I was under the impression that the Philadelphia area didn't have income restrictions... is this not the case?

@Eric Veronica Thanks for the post link, it was extremely helpful in wrapping my mind around the benefits.

Hello All,

I am currently looking for the best possible mortgage option to finance a 3-4 unit property and have overwhelmingly been geared towards an FHA loan. After talking to a colleague, he pointed me towards looking at Home Ready or Home Possible loans. After doing some research I am still a bit confused. From what I understand HomeReady requires 25% down for 3-4 unit properties but Home Possible only requires 5%... does anyone know if that is correct?

Also is anyone able to recommend a Home Possible or Home Ready lender in the Philadelphia or South Jersey area. I have only really been able to identify Quicken Loans as a Home Possible lender... I am sure there are more. Thanks for the help and recommendations all!

@Chris Miller Hi Chris, did this end up working out for you? I am considering a similar situation. Who did you use as your mortgage broker. Did you end up finding a decent contractor? And with the third floor needing so much work, was it able to fit into a streamlined product or did you have to go full? Sorry I don't have anyone I can recommend to you myself.

@David Morad Great thinking, starting to plan early. I have lived in Philly for most of my life and pride myself in knowing the city extremely well. I think Philly is an absolutely amazing place to live. Proximity to NY and DC is great. I get to travel to our nation's biggest and best cities. I go to Boston quite often because of how quick it is to drive (6.5 hours).

As far as where to look, that is a loaded question. Philly is a city of neighborhoods and it all varies. If you are trying to live cheap and want to live in the actual city where you can walk to downtown and experience the city then I suggest places that are just outside Center City but still manageable either walking, biking, or a quick subway ride. 

Francisville, North Broad, and Brewerytown are north of the city and are on the cheaper end, they are close to the nicer Fairmount and Art Museum Neighborhoods. I lived in Brewerytown for a while and loved it. It's literally right up against Fairmount Park and walking distance to the Art Museum, and the riverfront. These neighborhoods are in transition though and you may find some sketchy areas. 

South Philly is also a great bet too. It is extremely popular, and you will be in Center City in no time. Neighborhoods like Point Breeze/Newbold are being developed like crazy but rent is still very much manageable and there are still deals to be had. Grey's Ferry is also becoming popular but its a bit more out there and transportation is harder. 

Buying something in the city is getting harder and harder because of the crazy amount of development going on in Philadelphia and its rapid growth. A lot of New York money is coming into the city, which is making things a bit harder for investing but it is still possible. Also there are a lot of speculators and flippers in the city, so competition is real, but don't let that deter you from investing in or near the city.

There are lots of things I can say about Philadelphia, and I can probably continue writing for while but here is a starting point. Philadelphia is most definitely a block by block city. So any renting or buying you do, you should always go walk the neighborhood and make sure that it is what you expected. You can be walking in one of the hottest neighborhoods in town (Northern Liberties/Fishtown) and end up in one of the most dangerous neighborhoods in a matter of 3 blocks (Kensingtown). Although Kensington is on a fast upswing. So pay very close attention where you are looking.

If you have any other questions, feel free to reach out. Good luck!