All Forum Posts by: Alex M.

Welcome to BP. Have you thrown a deal analysis of your two rental purchases onto BP yet?

I was asked to do this with the first property I had under contract (which did not work out) and it was truly eye opening. 

In looking up some of the forms and other necessities for renting a property in Philly, I came across this fantastic list provided on a local Philly REI blog:

http://brownstonere.com/blog/landlord_guide

Hope this is useful to some of the other Philly landlords on BP. I will be using this as a quick checklist to ensure I am taking care of things, like PGW's Landlord Cooperation Agreement, providing tenants with details on their Trash day, and other helpful and necessary hints.

Welcome to BP @Luke Badalaty.

Glad to see such a good response from other Philly investors here already. Similar to @Troy SheetsI started by trying to find a small MF (1-4 units) using FHA financing, but it just never quite worked out that way for me... could not find a MF property that had good numbers in a neighborhood I wanted. I got close a couple of times, but no dice.

That said, I am now investing, currently in Fishtown/Port Richmond/Kensington areas. I'd recommend keeping an open mind to SFRs that can work for you, as the MFs are hard here in Philly.

There's a good community of Philly investors here on BP - and Troy runs a great networking meeting monthly in Brewerytown that I would recommend (I've only been once so far, but immediately met some fantastic other investors).

Hope to see you around on here and in Philly.

@David Robertson - just got your file. Thanks. This is a very helpful document.

@Jay Hinrichs - not sure I agree with that. $20k is quite a lot of money, and more than enough to get started with. It may not work if you want to purchase a property using cash, rehab it, refinance and repeat to get yourself to $100k, but you could certainly land yourself a property in a rapidly transitioning neighborhood. Buying in the path of development is a good strategy to multiply your initial equity.

My fiance and I bought our own home for $67k in Philly last year using FHA financing a $4k seller assist to get in for next to nothing. We put around $15k out of our own pockets into it, and used an energy efficiency loan ($15k) to insulate, install new windows, and add an ASHP with ductwork. Adding a little sweat equity, and some plain dumb luck, we have a property that is now worth around $180-$220 1 year later. In part because it is now a gorgeous home, and in part because the neighborhood is changing that much with new $400-500k homes going in all around us and similar row homes being flipped and sold for $200-$300k.

So... using less than $20k out of our own pockets, we did theoretically already make over $100k in around 6 months time. We are now just sitting on that - with a plan to refinance and access an equity LOC after a few more of the properties around the corner are finished and sold.

I'm looking into umbrella insurance policies, as I have a recently created LLC and one property to cover, with another on the way, and a pipeline of anticipated consistent growth over the next 12 months. I initially tried calling Allstate, as I have my personal property and another rental (not under the LLC) insured through them. However, I'm not yet satisfied with what they have offered. In doing a little more research online, I came across a great list of things to consider when shopping for umbrella policies - most of which, I was not thinking about. The list seems really helpful, so I'm sharing here:

1. 1. Make sure the policy has an All Risks provision.
2. 2. Make sure that you understand what the "vacant property coverage" is - i.e. read the fine print.
3. 3. Be sure to have a Loss of Rents provision.
4. 4. Don't take the basic liability coverage - pay the extra to go to $500k or $1M
5. 5. If you have a property manager (or even if you don't yet - you may get one later), make sure they are covered, or there is the option to add them as an "additional insured".
6. 6. Companies change their policies a lot, so don't just take someone's recommendation. Shop around.
7. 7. Get a Commercial Umbrella Policy - Personal Umbrellas can just deny coverage without warning if you have more than their "limit" of properties (usually 3 or 4).

The full list with more explanations is here.

So this is where I am starting in regards to searching for a good scalable policy for my LLC-owned rentals. Would you add or remove anything from this list?

Great post. Thanks for starting it. Having a highly demanding job that keeps me going evenings and weekends, and being in a key position in my company, I am really struggling with this one. One the one hand, I work so much into my "own time" for my day job, that I personally feel it is acceptable for me to take calls and deal with some of my side jobs responsibilities when it is necessary. On the flip of that, I know that if folks thought my focus was not on the job at hand, they would worry as I am the primary sales/business development person for the company I work for - hence, if I am not working, the company is not growing.

That said - while I make "okay" money at my day job, it is not going to be sufficient in the long run and I know I owe it to myself to do what I am starting to do in REI. I also like to believe I do work above and beyond on a consistent basis, and keep a personal self-check by asking myself: am I providing value to the company? I cannot recall which podcast it was, but I believe one of the guests said they self-evaluated themselves with an integrity check to ensure they kept doing what was necessary for their day job. I believe if you are doing that, then it should be acceptable to do REI on the side, and at times cutting into work hours (so long as it is balanced).

Talking about it at work is another thing, though - what's your role in the company? what example is this going to set? what message is this going to send to fellow workers or employees? I think a lot depends on your jobs "culture", and your responsibilities... if you are a boss and your conversations are always focused on REI, then you are probably not helping folks get fired up about the job at hand. However, if you are chatting with colleagues at lunch, then this is simply you sharing outside interests, and no different than discussing sports or stock investing, or your family.

Personally, I talk about REI - because I am excited. I also often regret it and think it is probably best not to at work because I want folks to think that my job is my top priority, as I want theirs to be.

Look forward to seeing more opinions here...

Just  read the section 8 bible this past weekend and it is FANTASTIC! It was a really easy read. Quick. Straight to the point. Funny at times. Full of great suggestions and useful ideas. Extremely inspirational. And it does not beat around the bush. It is 100% geared to investors who want to make money scaling up a "business" with section 8 housing.

Some of the reviews I read on here call out the poor grammar or spelling errors, etc. (e.g. the author likes to use John Dough as a reference...). Whatever. If your focus is on grammar and spelling go be an English teacher. If your focus is on learning the pitfalls and how to avoid them - or at least how to get fired up about the possibility - then I would recommend ignoring those issues and reading this book.

I don't necessarily want to practice everything he preaches - boarding up windows and using 2x4's for legs on a kitchen island... but overall, this is a very practical set of recommendations to providing solid affordable housing to a demographic that can be difficult - recognizing those difficulties this author has come up with a number of strategies to reduce problems and focus on profit, while meeting all section 8 program requirements. 

I'm in the process of looking at section 8 for my 3rd rental and this book has helped me to understand some of the challenges and strategies to navigate this system.

@Jonathan Andersen Thanks! I certainly hope so.

@Darrell Lee - I'm glad to hear that my story helps. Sounds like you are in a similar situation with available resources and time. Good luck. I'm sure you can do it! Hope to cross paths at some point as you get going.

@Michele Fischer

These two require moderate rehabs. Some electrical. Kitchen/bathroom cleanup. Floor sanding/refinishing, painting, one or two windows and some wall/ceiling patches. Nothing major. Roofs are good. Mechanicals are new. 

Both my fiancé and I do work full time. I have a demanding job that keeps me working evenings and weekends and traveling around the country frequently. I also have two kids with my ex, so every other weekend is tied up. This makes it challenging. But also motivates me. 

My fiancé and business partner has a little more flexibility. She's a realtor. Her day today is mostly property management with some sales. But still not a lot of extra time. 

In regards to the goal - that's all it is. I'm pushing myself with a target. If it looks like that will slip, I'm okay with it if it means I do a quality job of the ones I have. I know I'll get there eventually, but I like to stretch myself with achievable but challenging goals.