All Forum Posts by: Alex M.

Permit granted

Hi Amanda - I recently completed the zoning approval for use as a duplex of an RSA-5 building here in Philly. It's a long process. It is also very political. Luckily for me, the local RCAs and neighbors were all in support of my use. The building I had was used for a very long time as a duplex (sounds like similar to yours). It had separate meters and everything else was also fully separated. I also committed to fixing the sidewalk and external repairs to make the street look just that little bit better, as well as not requiring any major modifications to the building - paint, flooring, tile, etc. I have to say the process leaves you with little certainty until the end. It is clear that it could ultimately go either way - largely depends on the location, specifically what you are asking for, what the neighbors think, etc. Also in my favor was that I plan to market one unit as a 1-bedroom instead of what was previously marketed as a 2-bedroom with an awkward layout. This - in theory - will lead to lower number of occupants and therefore reduced density in the neighborhood. Density does appear to be an issue for many - with parking spots being a big driver. Also items such as number of occupants and therefore load on the sewer, etc., go into consideration. If you do decide to do it, find a good zoning lawyer, document everything, meet with the relevant councilperson, get to know your RCAs and the neighbors and be as good of a neighbor as you can possibly be.

Good luck!

@Katrina Chaves I did both. With one partnership (my first), I established the partnership first and my partner provided the funding with the understanding that I would locate properties and start a BRRRR process to grow our portfolio over time.

With a more recent partnership, I found a property I wanted to buy and I created a new LLC with a partner who funded the deal (99%) - with the expectation that we will eventually BRRRR this into a few more properties also.

While I don't have a definitive answer here for you, I do have two data points from Philly:

1. I have a tenant who had a baby this past year. We were sent a letter requiring us to get a lead safe certificate for the property, even though they had been living in the property for about three years at this point.
2. I recently purchased a property from a troubled landlord with a non-paying tenant. This landlord had taken the tenant to court for non-payment in the past and had won a judgement with contingencies in it that stated they needed to do repairs, as well as obtain a NEW lead safe certificate. They already had one, but since it was before the tenant had her most recent child, the judge was requiring a new one.

Neither of these indicate what the law exactly is, but both show that regardless, you can be asked/required to obtain a new lead  certificate in Philly if a judge, or a nurse/health professional request it.

Has anyone here dealt with an L&I violation on a rental property. I recently applied for a business license on a new rental and found that there were a few violations posted for work completed without permits: construction/demo, electric and plumbing.

I am working with a permit expeditor to get this cleared up. It should be simple (or so it seems). However, the contractor that did the work is not being very responsive. If they do not respond, it appears I may need another licensed contractor to sign off on all the work done. 

Have any of you ever had to do this? What was the process? How much did it cost? How long did it take?

As an aside - the place already has a lease to some fantastic tenants who are willing to extend the move in date a couple of weeks. I am hoping to avoid causing any headache for them so that they can move in on time.

Thanks in advance.

@Rafael Brown Yes. We split 50% of the expenses... it comes out of either cash flow, reserves, or my partner would put it in if needed beyond what we have. We do not draw any income from the partnership outside of property management - 8% monthly per unit and one month rent for tenant placement. My wife is a property manager, so she is the one that gets those fees as a separate entity. It is a standard expense to the partnership, similar to insurance, taxes, etc.

@Rafael Brown I did. I don't know if my approach is the best for everyone, but it is working for me to build a part of my portfolio. I ended up structuring a 50/50 deal with a cash partner. In this partnership, my partner put in 90% of the cash as well as a bit of time and expertise in around items like taxes, bank finance, etc. We've done a few deals together in this way and currently hold 10 properties together - with an additional 3-unit closing next week.

The basic structure made sense for me to get started - my partner provided the cash injection and I provided the time and effort to find the properties, fix the first couple and/or manage the contractors. Initially it seemed like the relationship was skewed in my favor - why would my partner want to put money in to only get 50% of a deal when he could just buy the property himself and rent it keeping 100% of cash flow and equity. However, now that we have refinanced a number of units and are beginning to use bank money for purchases as well as BRRRR methodology, it has flipped to be more in my partners benefit - I do 90% of the work and only get 50% of the deal... but I am fine with that. This partner has helped me to get started and I am happy for him to make great returns within this partnership moving forward. I also do buy and hold some on my own and in a second partnership, structured similarly.

One thing that helped also is that as we started to scale up a little through the first round of refinancing, we shifted to 100% of cash input from my partner and 0% from me to adjust the balance a little. I also take an 8% management fee on the properties now - I did not for the first year. The rest is split 50/50 (equity, cash flow and expenses). 

So far this has been a very good partnership for me. Good luck with yours. I hope you can figure something out that will make sense for you and your partner(s).

I was a wannabe REI a few years ago and started googling. When I found a post by BP I was really impressed with the amount and type of information provided, so I poked around...

Since then, and 99% thanks to BiggerPockets for the amazing info and resources, I have become an "actual" REI - I close on my 23rd unit in a few weeks.

I still consider myself quite a newbie in most regards, but hope to build on this foundation and start to scale over this year and next.

@Raman Bindlish - thanks. It still blows my mind that someone went to this length: rip off posting, breaking and entering, and attempting to rent to multiple families... but I guess it seems like easy enough money for them. Someone else recently told us that they thought our posting was a scam because they saw it listed cheaper elsewhere and spoke via email with that poster. Apparently, they are telling them a big elaborate story about a dead wife from cancer, painful memories in the house and the need to rent ASAP. If the interested party wants to move in quickly, they need to pay $1600. If they are able to wait until May 1st, they can pay $800.

Now I am just waiting to have a mob of angry people trying to move in on May 1st... ugh!

@Wesley W. - I will definitely look into that and appreciate the heads up. If that's the case, that would help with a lot of issues! 

@Wesley W. I believe there is an option with CL to not have an address - my wife @Vera Rosen is a property manager and real estate agent, so she handles the postings. My understanding is that she uses CL occasionally, but only posts general location on CL. 

The issue is that Zillow and Trulia and Hotpads and others that her office posting system pushes to all require an address. 

If anyone had a brilliant idea on how to escape that, it would be really appreciated... but currently, I see no way to post widely and not provide an address.