All Forum Posts by: Reed Vennel

Lots of reasons someone could want that.  Temporary work placement like a traveling nurse or exec setting up a new branch, family coming to help with a newborn grandchild etc etc.  Ask for why, and if it checks out possibly check with your attorney on any risks from longer term stays if you haven't already.

Sounds like you're not willing to be the bad guy in this situation, which given your relationship is understandable.  Someone is going to have to be the bad guy.  If you can't do it I see two options to make someone else the bad guy, and both are going to cost you money:

1. Interview PMs until you are confident you've found one who will fix the situation for you. or

2. Sell the property with the tenant in place and make it the next landlord's problem.  Over 3 years, you've probably had decent appreciation even if the place isn't fully fixed up yet.


Either way, you've learned why to not mix business and personal relationships, and you'll likely never make that mistake again.

Is there a typo in your post?  It appraised for what you offered, so you're clear to close.  

If you're having buyer's remorse, that's nothing to do with the appraisal, and unless you have some other contingency you'd likely have to walk from your earnest money.  

If your plan was to offer over asking to have it intentionally not appraise just to beat out other buyers with a misleading offer... Well then you've learned why sellers want an earnest deposit to help limit their risk with this type of shady behavior.

My thoughts

1. It's only been three days

2. Pictures aren't very attractive

3. Your description is in all caps.  If you're "yelling" at people who aren't even tenants yet, I would be wondering how you'd be as a landlord.  With contractors etc. who do this, I frequently will not pursue it any further.  I want to deal with professionals, and this is a very unprofessional look. Convey excitement with exclamation points and evocative word choice.  That being said, this looks to be a barebones type of apartment, so the only things they could be excited about are that it's cheap, clean and well run.  

4. I only see one bedroom in the pics, and you're listing it as two.

Are you familiar with Philly?  It's a very block by block city, and that area is definitely a crossroads.  I graduated from Drexel in 2017 and had friends who'd refuse to walk in that area.  Might have changed in the 5 years since, but I'm not sure I'd bet on that if I didn't live in the area myself.  Being close to the shuttle and Vidas might get you some college students if you're trying to rent, particularly if they're in soccer, field hockey or some other sport where the location would work in their favor.

For an ARV my biggest weight would go to 316 N 41st St. Similar square footage, on the same block and looks to have been a fresh flip even if it is a year and a half old. I'd add a bit to the value mentally given that it's a bit older of a comp. 380k, but it's a floor comp not an equal comp.

Second would be 15 N Preston St for me.  Little far (towards a better area), little smaller, so I'd probably balance those two out and say it's probably pretty close.  400k

Third would be 318 N Preston St #1.  It's a condo, and a bit smaller, but still has a private yard, and it's brand new construction which will carry a premium over a rehab.  405k, again pretty close.


Rent comps are 332 N 41st St #1 at $2200 and 29 N Wiota St at $2400.  

If I were looking to purchase, I'd be betting on an ARV of 380k and rent of $2200.  

Like Eric said, without interior pics, I would assume the rehab is gonna cost a minimum 100k.  150k if you're jobbing it out, so I probably wouldn't even bother going to see it in person.

All told, I've called the township 11 times, 2 voicemails, 10 emails, and tried showing up in person once without any luck.  The township manager's assistant just tells me to call him.

I'm having a heck of a time just getting the code department to do their job on a flip, and it's burning some major pocket holes.  Anyone have any ideas on how can we get this moving forward?

It's been two and a half months on a simple closet to bathroom conversion, and we've only managed to get the rough inspection done.  All told it's been maybe 4 days worth of actual labor so far, the rest has just been waiting.  The inspector finally came out last monday and called our plumbing "creative" and just said he'd need to review the regs (no list to fix or anything).  It's a flip of an 1-story older home on slab that was built from 2x3s, so we had to be creative as there's barely anywhere to run our PEX.  We responded within 2 hours citing relevant code and saying we'd box out the sections that he didn't like for final, but that this was just a rough inspection so we left it exposed.

No response for going on 10 days now.  

This is a relatively high end flip, so we were expecting to sell for 450k.  This is hurting BIG time.  Please help!

I'd be hesitant to deny based on any pending criminal charges, but can definitely see your concern.  I think I'd approach this as normal income verification, although I might want to get his written permission to mention the pending charge to ask the employer about the pending DUI in case they don't know and you accidentally get him fired.  I usually contact employers and ask a few questions to verify their income is reasonably expected to be stable.  Here's my questions I did from an income verification last week for a therapist joining an established practice.  The last question could easily be adapted to address your specific concerns.

Different markets are for good different things.  Some work for rental cash flow, some work for appreciation, and some only work if you live there.  NYC is almost certainly going to be impossible to to cash flow in my opinion, but I would not be surprised to hear that appreciation more than picks up the slack.  If you're hurting from the lack of cash flow, you're probably going to have to find somewhere else to invest.

 Joe, I'm interested to hear your math on this.

First: Say you buy a rental at 100k with 20k down.  Are you saying to sell when your loan balance is 60k (INITIAL value is 40k higher than current loan), when your PV is 120k (INITIAL loan balance is 40k less than PV), or when equity is 40k (say the home is worth 110k, and you've paid the mortgage balance down to 70k, 110-70=40)?



I'm guessing you're talking about the 70k loan balance on a 110k home here.  Now for the actual refi vs sell

If you do a cash-out refi and use the proceeds to buy a second property also worth 110k, you pay mortgage origination fees and closing costs on two $88k loans and one $110k home
If you sell and buy two properties worth $110k each, you pay mortgage origination fees and closing costs on two $88k loans and three $110k homes (one sale and two purchases).  I'm guessing you're doing a 1031 to save the tax bill and depreciation recapture, so I'm not including those here.

I see an extra $7,700 in transaction costs by selling and buying two vs refinancing and adding a second.  Are you assuming appreciation outpaced rent growth, or something else?
$110,000 x 2 transfers x 1% transfer tax (at least in PA) = $2,200 transfer tax and $110,000 x 5% commission (sale only) = $5,500 commissions.