All Forum Posts by: Nicholas Kurowski

@Joseph Scorese Thank you. I sent you a PM

Good Evening BP,

I have a potential deal in the works for a duplex in Northeast Philadelphia. The property being sold shares a step with my current rental property that I bought last August.  It is an estate sale that I have been able to agree to prior to it ever being listed. The house has been fully redone: kitchens, bathrooms, roof, Windows, HVAC, etc.

Sale price: $195,000 ($175,000 cash, $20,000 paid interest free over 5 years to the estate)

Expected to appraise at between $205,000 and $210,000

Taxes: $2,500    Insurance: $1,300

Total rental income: $1,750

My father will be financing the $175,000 cash for a fee of $5,000 

Closing costs: $3,000   Transfer tax: $3,750   Property tax reimbursement to seller: $1250

The max financing I can find is 80% LTV. Does anyone have any creative ways they believe they could make this deal work. I would to have 4 units sharing the same step but I also realize this is tight. I only have roughly $9,000 to apply to the deal but would prefer to keep my out of pocket expenses as low as possible.

Any advice would be wonderful. Thank you.

@Roy N.   I will have to look into joint tenants and tenants-in-common a little more thoroughly to find out which  is best for us. 

 I was reading up on the transfer tax in Philadelphia and it states in an area of the law that a transfer from a parent to a child is tax-exempt. So I was looking for a little more information to verify that. 

As for the cash out refinance, the bank that is willing to finance this new mortgage is a local bank that allows up to 89% LTV on the appraised value of the home on a freeing clear property That is owner occupied. Depending on the purchase price of the property I would be able to take the new mortgage and pay off the initial investment plus the $5000

Good Afternoon BP,

I have a potential deal coming up to purchase a buy and hold duplex directly next door to my current rental property. I will live in one unit and rent the other. I don't have the down payment money to be able to get a mortgage on the property myself. However, my father has offered to finance a cash offer on the duplex. He will receive $5,000 as his fee for the financing. We would both be on the deed for the property and I would then do a cash-out refinance on the property to pay him back his initial investment plus his $5,000. (This deal is all dependent on purchase price). I will be able to do 89% LTV on the cash-out refi.

My question is regarding removing my father from the deed after I purchase the home. He does not want to remain on the deed. I have no experience with this and was looking for some insight. The property is located in Philadelphia.

Any advice would be greatly appreciated.  Thanks everyone.

@Percy N.  If I have the tenant signs a rental agreement then that entitles the tenant to live in the property during that time.  The tenant is still paying on their current apartment and did not want to pay for two while only living in one.  In addition, an agreement document is easier to compile and sign then editing down my entire lease to meet the terms of the holding agreement and fee.

Good Afternoon BP,

I am looking to find a Holding Fee Agreement Form.  I have an apartment I will be holding for an approved tenant for the next three weeks. The tenant has agreed to a holding fee of $1,000 to cover that time. As with most holding fee agreements, if they move in within that time frame I will apply that fee to their security deposit. If they do not move in, I will keep the fee.

Does anyone have an agreement form created already. I searched the FilePlace but did not find anything.

Thanks for your assistance.

@Max T.  This property is in the Far Northeast. the cash flow is roughly what I pay in rent now however I plan on using the cash flow to fund additional down payments for more properties. 

I will be managing the property myself. My career is in civil service and it allows me to have 4 days off every week. So I will be able to keep a stable career while investing and managing at the same time. Once I have a large enough portfolio I will hire a property manager to over see it. 

I appreciate you taking the time to comment. 

@Elizabeth Tobias-Hanadel  I am doing this part-time as an additional retirement plan. Hopefully I can continue to find these properties and develop my portfolio. Thanks for your post!

Good Evening BP,

I have recently completed the purchase of my first Buy and Hold Property in Philadelphia.

The property is a 2 bed/1 bath (ea. unit) duplex. The property was an estate sale and the listing agent happened to work with my agent so I was able to get in for the first showing and therefore make the first offer. 

The property was listed for $199,500 and cosmetically has been updated inside and out. I won't have to put more than $300 into the property to start. All CapEx, except the roof, is at least 10 yrs out should nothing break prior to its useful life (however I will account for this). The roof has 6 to 7 more yrs left before it needs to be replaced. Taxes are $2490/yr. Insurance is $1179/yr. Current tenant has been renting the upstairs unit for the past 15 years and pays $950 plus all utilities. Downstairs property is vacant but the listing agent had already received 5 calls prior to closing with interest in renting (they will all be screened thoroughly). Downstairs unit will rent for $950 as well.

I offered $182,500 on the property. After several other offers, the sellers came back and offered me the property, take it or leave it, at $189,000 due to my being the first offer they received.  I agreed to purchase for that amount.

Home inspection was perfect. Only minor items (ie. GFCI installation, leaking faucet in kitchen, etc..).

The home appraised for $200,000. 

I was able to secure a 5% down first time home buyer mortgage at 3.865% interest/360 months.  A stipulation is that I live in the property for at least 60 days.  I will move in for 60 days then move back into my old apartment which I will sublet for those 60 days. I have cleared this with the bank and there won't be an issue no longer occupying the property after that time.

I should cashflow, before vacancy rate and CapEx are taken into account, above $600 per month.

Let me know what you think. I am very excited to get started in Real Estate and look to continue to expand.

Thanks for reading. 

Tony - The roof is only 15x45 and the contractor is a personal relationship (licensed and insured however)

I'm waiting on those deals to pop up. I wanted to use this property as a benchmark to better understand what I should be looking both financially as well as property-wise. 

I'm still trying to find a realtor that works with investors. It's a task to continuously look at properties with a client when most won't pan out. Getting licensed myself is also an option so as to cut out the middle man and also benefit from the education. 

Thanks everyone. 

The monthly expense includes insurance, PMI, and taxes as well as the principle and interest. Management will be handle by me (I work a four day on four day off schedule).

As for the money down, I've been approved at only 5% down for my first property as I only rent at this point. 

I'll keep looking. I appreciate your input as I was on the fence. I am still new to this and am continuously educating myself. The input you all provide is priceless to a newbie and I'll will benefit because of it.