All Forum Posts by: Neel Patel

Hi team!

I recently purchased a shell in Brewerytown and we went to pull the builder permit but L&I is saying that we need blueprints since it's in a shell condition. Neither me nor my GC was aware of needing blueprints because it's a shell. Do I need blueprints? How much should I estimate for blueprints? Any recommendations?

Thanks in advance!

 Sent you message. 

We have decided to flip the property once the rehab is complete.

 I've adjusted my closing costs to 4% and 6% for agent fees. The property is in Brewerytown on the 1500 block on N. Newkirk.

 Thanks John! Complete agree with you on the quality of tenants. I've gone ahead an adjusted my numbers. I rather be conservative upfront.

@Christopher Phillips and @John Leavelle: what should I be accounting for in repairs and capex? 10%? I did 5% capex since everything will be new in the property.

My original thought was to refinance out the bulk of the cash put in, $175k to $200k with roughly a 5% interest rate (or more by the time I can refinance). I'm moving away from rental towards flipping because I would not cash flow. The highest I could possibly push the rent would be maybe to $1600ish but that would be the absolute high-end. 

I have accounted for about $1500-$2000 in holding costs. I forget to put that in my original post.

I already have the property so a lower purchase price is out of the question, unfortunately. 

Hi everyone! I just picked up a shell property in a booming area in Philadelphia. Original plan was to flip it, then started considering renting because of the area but now, I think the original plan of flipping might be the best route. I want to get feedback on my analysis and thought process on the two options. 

• Purchase Price with closing: $130,000
• Rehab: ~$80,000
• Total all in cash: $210,000
• ARV: $270,000 on average (low-end would be 250k and high-end would be $300k but a house just a block away appraised for $325k recently with lower finishing than what I am planning)

If we flipped the property:

• Closing costs: $21,600
• Net: $36,900

If we refinance and then rent:

• Rent: $1400 (but could be $1600 based on other comps)
• Tax: $100
• Insurance: $200
• All utilities: tenant responsibility
• Property Management (10%): $140 (we would self-manage but I like to build this number in my calculations)
• Vacancy (5%): $70
• Repairs (5%): $70
• CapEx (5%): $70
• Net: $750

With only a net of $750, pulling out our cash via refinance the property would put us in a negative cashflow. Our loan payments would be roughly $1100+  a 30-year mortgage with a 5.5% rate. 

Are there any flaws in my numbers? Anything I should be considering? Anything I am missing? I feel like we'd walk away with more money by flipping. Open to all feedback. 

Hi Joe! Thanks for responding! I haven't heard of the term sliding. Could you explain? Would I close the house under my name and then transfer to the LLC? What kind of fees would be involved with that? I wouldn't mind having a conversation with your lender.

Hello,

I am looking for recommendations for a lender that will loan to a 2-3 person LCC. Looking for a 30-year or 20-year fixed rate mortgage. I had found a lender that would do a 30-year fixed rate but the LLC could only have two people in it. Another lender I have only does 5 year fixed for a 20 year loan.

Any recommendations would help!

Thanks!

I have an electrician coming by today to look at everything.  Thanks all!

 Thank you!