All Forum Posts by: Michael Enriquez

@Sung Park  That would be the case if the other units are not being rented out. Even if the multi-unit is owner occupied, if you are producing income, they want their slice of the cake. Lol. 

Hey @Jonathan Feliciano! This property you mentioned, what block of 33rd is it on? I'm assuming you want to purchase within University City? 

As far as expenses go:

With 2-6 units the city will provide trash pick up for a flat rate of $300 per year. Single family homes are not required to pay for trash.  

With multifamily homes, the landlord typically pays water. With single families it's very common to have the tenants responsible for all utilities. 

Philadelphia imposes a rental license fee of $50 per unit, per year. In order to obtain a rental license, you will need to apply for a commercial activity license, which is now free. 

BP family! I'm very excited! I just closed my first deal as an investor a week ago. After scouting the MLS for months I finally pulled the trigger on a duplex (1 bedroom over 1 bedroom) in West Philadelphia. It's not the deal of the century, but here are the numbers:

List Price: $69,900

Purchase Price: $60,000 + $500 seller concession (net purchase price: $59,500)

Appraised Value: $67,000

Downpayment: $15,000

Projected Gross Rent: $1,250/mo

As mentioned before I didn't hit a homerun but the numbers work. I managed to have the seller make a good number of repairs and turn over the units (since both were vacant). The property already had a new roof, updated electric and plumbing installed throughout so all that's really needed now are cosmetic updates. Here are some pictures:

I'm in the process of getting the floors in the second unit refinished and heeded the advice extended in many of the posts that predate this one "get multiple contractor bids!" I was surprised at how wide the spread in the bids would be.

What Will I Do Different Next Time:

My goal is to acquire 100 units over the next 10 years. I've come to the conclusion that in order to do so I can't go about purchasing property as a retail buyer, tying up all of this cash. With this property I was just so eager to actually do something, rather than sit on the sidelines and analyzie deals for God knows how long. I've told myself that my next purchase will be a value add project where I can get my capital back after a cash-out refinance and use the money towards the next acquisition (good 'ol BRRR strategy).

@Joel Cedano the 5 year requirement is for multi-unit homes that are not in SONYMA's target area, it's a property eligibility requirement. As the purchaser, if you utilize the down payment assistance you would be required to occupy the home for at least 10 years. If you sell the home or elect another home as your primary residence before 10 years you will have to pay back a prorated amount of the down payment assistance loan. However, it should be noted that if you do accept the downpayment assistance loan and for whatever reason sell the property for less than what you paid before the 10 year mark, the DPAL may be forgiven if there isn't a sufficient amount of proceeds left from the sale after satisfying the mortgage. 

In regards to keepin your name on a lease, the lender may very well consider that rent payment when calculating your DTI, this may or may not adversely affect you depending on your situation.

Sadly, no. SONYMA is an initiative for first time homebuyers and there are very strict underwriting requirements tied to it. According to the seller's guide, some of the requirements include: 3 years of tax returns (opposed to the norm of 2), if it's a multi-unit home that is not located in one of their target areas; at least one unit must have been occupied for 5 years preceding the application (and if it wasn't occupied it could not have been for commercial use. 

Although SONYMA offers the DPAL, the rates are a bit higher than your run of the mill conventional loan. When ever "free" money is involved, let's just say it's not really "free". Lol. 

Look into a holding and operating company relationship. From my understanding as long as the holding company owns at least 90% of the operating company you can pass income and losses right through to the holding company. If any experts can add to or even correct anything that is incorrect please chime in. 

It's a great rental market that boasts decent mass transit options. However, it's not as cheap as the Northeast Bronx, so if you're going to finance the property the debt service will certainly eat into your profits. Additionally, the age of the housing stock is quite up there in years so that's one thing to keep in mind. 

The PMI in your scenario will be determined by your creditworthiness. Google "MGIC rate card" this will outline what your PMI should be provided you know the coverage requirements and your FICO score.

 I'd just like to disclose that I am a licensed agent. The rental market in Mount Vernon is good. Single families won't make sense as rentals here. Now if you flip north of the metro north train tracks you'd be in the money (more of a high end flip). 

With that being said Multi-Family homes can make sense; I'd advise a 3-4 family home. Units command just as much in rent as the Bronx (slightly less), however, taxes are more than likely to be double or three times higher than in NYC. 

when analyzing deals in NYC you can't approach it with the cash on cash ROI as your driving metric. Yes, you don't want to end up buying a dud that never cash flows but this is more of an appreciating market than a cash flow market so using Internal Rate of Return would be more suitable.

It should be noted that prices MAY hit a plateau for a bit here as the Fed is anticipating 3 interest rate hikes for 2017. Good news, however, is that if you're considering using an FHA loan to house hack the federal housing administration just lowered the annual PMI premiums on FHA insured loans that close on or after 1/27/17 from 85 basis points down to 60 basis points if you put less than 5% down.