All Forum Posts by: Mike B.

Dave Alexander there's also aucton.com and Xome.com. I think if I hired a GC to do everything would have ran closer to $50K

Hi all,

Sorry if this is a bit off topic, but moving out of my duplex to a larger home in a few months.  I have a ton of stuff to be packed up, my time is in very short supply so I'm considering using a service to pack and move me.  They'll also likely pack my fragile stuff better then me. 

Does anyone have any recommendations for companies servicing Philadelphia and surrounding neighborhoods (in PA) that pack and move you??  Has anyone done this before and have any pros/cons to add to this?

I will check Angies List, etc but I've had great recs from local REI/Folks on the BP forum, thus my question.

Thanks in advance!

@Account Closed - I advise you confirm with the city (obtain a C&O) that it is legally zoned as a 4-plex.  Just because it's zoned RSA-5 does NOT mean it's legally a 4-plex.  Yes, you can check the zoning archive online and if there's an APPROVED application for a 4-plex, likely you're fine. However would confirm that directly with the city (I think they charge $100 or something) before you buy.  

And Jake, I want to make sure you understand this place needs A LOT of work.  Yes, it has good bones, yes it could be great, but from what I've run into before, from the pictures, looks like it's going to need a decent amount of work (at least $50K.. I think more towards $100K for the whole building).  You can see knob & tube wiring in 6th to last picture (it's in the ceiling).  so likely you need to rewire the whole building (which may include a required alarm system +/- sprinkler system.. check code rules).  In addition, lots of drywall, flooring, kitchens & baths to do, likely new roof, repair wood rott, brick pointing, windows/doors.  After pulling permits, etc.. I think you may be lucky only putting $75K into it (that assumes you're hiring out for everything). 

Bottom line:  Make sure you're ok of spending upwards of $100K in renovations (assume the worse.. like water damage) and it's worth it (check the comps) to be sure when all is said and done, you can cash out refi and not be under water.  I'm unfamiliar with the area, so just putting all of this on your radar.. not to discourage you at all, but to paint a realistic view. 

Jake Washburn my advice would be to hold off on doing LLC for now until you have a few properties and will roll all of those plus additional ones into the LLC. As noted above then can do commercial lending. Do it under your name and get better financing for now. Get good insurance for each property plus a great umbrella policy. More then enough to cover you for now with only having a few properties. I have discussed this with a real estate attorney before and that was his advice, which has worked well for me thus far.

Richard Jahnle thanks. I'll refinance after the six-month seasoning. With a local mortgage company or smaller bank. My plan is to establish early relationships now so that way, when I have multiple properties, it's easier to refi or get a loan as I transition to using a business account.

Thanks everyone for the words of encouragement!

@Julia Choseed just wanted to say thank you!  I used Kally Cleaners and they did a great job! 

Thanks @Natalie Schanne for your response and questions. Great points! 

2400 Chestnut St is obviously very different then 21/Snyder area.  Avg rent in my area currently varies from $800-1400/month depending on size and finishes.  The properties available at $1400/month tend to stay on the market longer.  For me, I wanted it rented ASAP (was advertising during construction in December), thus I chose the $1200 mark and was able to be very selective in choosing my tenants from multiple applicants.  If I was advertising more in the spring/summer and not in a rush, I would have asked $1400/month though. 

The time factor is a very interesting question and I do think about it a lot. I work FT in the medical field while doing the REI on the side currently (I hope to transition to more FT REI in the future). Anyway, I do think of the real (and non real.. aka toll on my family) costs of working a FT job + rehabbing a place PT as well (basically I'm working 60-70hrs/week while actively flipping something).

What I've learned from this recent project was that in the end, likely would have been more cost effective (if not personally/socially better for my family and personal life) to just hire out everything to get it done quicker. That is, If I had a team of people, they could have gotten everything done in 1-2 months vs. the 3 solid months it took me (and my amazing father in law who's a contractor and assisting me with the REI endeavor). Moving FWD I will hire more things out because I agree, it's not worth my time (although I do enjoy the physical labor/design/etc of the project).

With a projected appreciation profit of $30K (to use round numbers), I made roughly $10K/month doing the work (since it took me 3 months).  And although that is a figure I'm happy with and I live modestly so that would be fine for my family, I also think about if I paid more (say 40-50K in rehab) and had it done and rented out in 30 days.  Perhaps I could be collecting $1350/month since November?  And yes, maybe at that point I only make $10K in appreciation, but if the project is done in 30 days, it works out the same.  Six in one hand, half dozen in the other..  

Thank you again for your points; very good thoughts/comments!

Hi @Paul Wakim not a problem.  I hear your points as well.  I guess you need to decide do you want the cash now (with high cash flow and low appreciation) or do you want ok/decent cash flow and appreciation quicker?  

Again, it comes down to your goals. If you want real estate to be your full time job and you need the cash quickly, then of course the higher cash flow option is the best. If you don't have access to a lot of funds (as I did initially starting out) then doing the BRRR method is a great way to build equity, get that appreciation, and then avoid paying capital gains tax when you sell in 2 years and move into another property.

Since you stated you have a few places available that need minimum work, then I agree that may be the road to go down.  Again, multiple ways to build wealth in real estate; you need to pick the best route for your goals though.

@Whitney Hutten.. unsure if I'm looking at the correct picture.. but looks like your bay window looking at the wooden fence is picture #2?  If so, I would discuss with neighbor about letting you (read: sweat equity) power wash it and stain/seal it.  Agree grass patch would be good.. or spread seed everywhere (hopefully will grow.. unfamiliar with your area though).  As long as you have a decent patch available for dogs/people to use, should be fine.  Rest of landscape could be rock/mulch (something cheap, but looks good). Or could build out a deck more (pressure treated wood) to use up some of the space