All Forum Posts by: Patrick OToole

Hi BP Community! I am about 3/4 through my first rehab for a buy and hold property. Everything was permitted of course right off the bat.  All drawings and plans were submitted to the city.  The plans have not changed...no additions, no increase in sq/ft.  Electrical, plumbing, and insulation inspections have all already happened.  My GC recently told me that the city did an audit on the property and is requesting an additional fee for some of the permits because more money was spent on them then the permit estimates.  We did pay some of the trades a little more than the estimated costs on the permits, but overall I am skeptical of this new fee on a permit that has been in place for 6 months.  This is my first rehab so this could be normal?  I am just not sure and can't find much information of permit fee changes after they are already in place.  Does anyone have any experience with this or knowledgeable about that process?

Hey @Evan Polaski thanks for your post!  This property has good bones and was recently lived in (80s decor and no major updates since the late 90s) so it certainly needs some pretty extensive renovations to fully update.  Luckily, my partner is experienced in this respect as she is an interior architect, who does renovations with investors as her career.  We are planning on a slower renovation for year one.  Adapting to the new knowledge and will do some house hacking with friends until its up to par for a cash flowing rental property when its legal and legit :) 

Thanks @Jack Luzecky I'm fortunate to have a reliable job right now, so I'm grateful for that and I dont foresee any changes on the horizon.  I appreciate you replying.  Always wanted to do it legit, it was just news to me once I got closer to putting offers in, but that's why the education is key!   

@Peter Baudendistel Congrats on the lake front farm house!!  I agree with you that it is a great opportunity to get a feel for things.  I'm excited to house hack now, not the initial plan but it'll be the right/better plan getting things going.  Thanks for writing. 

@Elise Marquette and @Aaron K. I definitely do not want to commit fraud and dont agree with that type of practice!  Looks like the options are house hacking or investment property with bigger down payment.  Thanks!

Thanks Filipe, that info is helpful! The property would be a SFR. I think ultimately I did not realize I would have to live there for a year. I love the property, but I wasnt planning on house hacking, which Im realizing I might have to do now in order to get in with the lower interest rate.

Question for the community!  I am a first time home buyer and have been saving/studying/networking this past year to do so.  I am running into an unexpected dilemma as I have began to put offers in the past two weeks.  

As a newbie 'investor' and lifetime renter, I wanted to purchase my first property as my primary residence and put 5% down and use the remaining money for the rehab, a couple months reserves, and then get renters in there ASAP.  That has been my plan this whole year of saving!  In my research, I must have overlooked the difference or the seriousness between the different types of investments (Primary home, 2nd Home, and Investment property).  I had read about house hacking but was really trying to get someone on a lease for the entire property and I did not realize that there were loan rules regarding 'moving in within 60 days of closing and actually living there for at least a year before legally being able to rent it out fully. Rookie mistake, I'm realizing.  I am in the dilemma now about how to truly address the loan and property as an investment property vs my primary residence, which would ultimately come with the higher interest rate and much larger down payment of 20 to 25%.  I'd love to conveniently ignore the red tape and get renters in to cash flow but I am pretty concerned about the "F" word regarding the loan.

What is the community consensus on this?  Is this dilemma routinely ignored if you don't have the money for the 20% down payment?  In my research it seems like a mixed signal of you can "get away with it" to this would be legit loan fraud with potential foreclosures if the loan is pulled and jail time.  Not trying to do that, but just trying to get in the game!!! 

@Cameron Lam thanks for posting, I enjoyed reading about your journey. I am just starting mine, so it’s inspiring to hear in detail!

@Andres Perez couldn’t agree with you more about being in the right place. Such a good resource with all the analyzing calculators and good people to connect with.

I’m mostly looking in North Philly neighborhoods like Brewerytown and Strawberry Mansion, but I am pretty open to the right deal/deals in South philly, North Philly, and Kensington. My partner is an interior architect/designer in Los Angeles so she has some amazing visions/plans for shells and spots that need rehabbing.

West Philly is the one place I don’t know that well. The market looks awesome though! Great architecture and opportunities. Good luck in your search, I’m sure you’ll do great things.

@Sheryl Sitman. Thanks so much! This is some really good advice. That’s a great way to look at it “tuition”. I’m doing my best not to get stuck in analysis paralysis. Really focused on acquiring a rental property in the next three months! Thanks for reaching out. Hopefully I will have exciting updates soon.