All Forum Posts by: Robert Palladino

Hey Adam,

I know this post is on the old side, but I wanted to reach out, and offer my offices services. We are an architecture firm here in South Philadelphia, that specializes in this type of work, specifically for investors. With regards to obtaining a permit, we handle everything from start to finish. Shoot me a message if your interested for this or another project, and I'd be happy to jump on a call with you.

Regards,

Rob

Hello All,

I recently lost a good deal to someone who moved faster than me. Without getting too far into the weeds, this particular deal involved turning a single family home into a duplex. The property was set up in a way that this would have been a relatively easy transition, and it was on a multi-family lot. It was in decent shape, but did need some work. All-in-all, it was a great value add opportunity. Before I finished the construction take-offs, someone else went under contract. The lesson that I learned from this is that I need to develop a system to analyze construction costs on the fly. 

My thought is that I would need a checklist of sorts. It would list all of the major components of a home, along with their estimated associated costs per unit. I would add a contingency multiplier to the total for added cushion. The idea would be to take this checklist on all of my property walk-throughs, and check items off as I see them. If I make this in Excel, I could have it on a tablet, and generate my construction estimate in real time. Obviously it would only provide a rough estimate, but I think it could be a really useful tool for making quick decisions. 

So, I am asking a couple of things here:

1) has anyone made something like this that you would be willing to share?

2) Do you have any suggestions for making it more efficient or accurate?

3) Is this a terrible idea for reasons that I'm not seeing? 

4) Any advice at all would be appreciated.

Thanks,

Rob

@Charlie Anne,

Sorry, my previous reply was meant to be @ you. Please see my previous post for a response to your question.

@Sam B.,

Because of COVID, I was unable to peruse Section 8. I attended the first information session, but the following week, the city shut down. For me, surprisingly, that ended up being for the best because I ended up getting a lot of interest in the property, and was able to get good tenants in there for $1,195/month even though the neighborhood is less than desirable. I think that they appreciated that the house was clean and well put together. Being pet friendly also helped. I think a lot of people who are being priced out of East Kensington are starting to move North of Lehigh, in my opinion. 

@Sarah Gabriel, @Tim Orenbuch, @Slawek Jakubowski, @Kevin Paulk, @Francis Nguyen, & @Jeremy Fisher,

Thank you all again for the wise advise and words of encouragement on my first rental property. I wanted to give an update on how I made out with this deal. To start, I did end up going through with the purchase. I spent about a month rehabbing the property (see comment above), and spent just over $6k. My total cost for the project was $86k, all-in. As mentioned in my initial post, the purchased & rehab were financed using the HELOC on my primary residence. I then was still able to refinance my primary residence as planned, which combined the two houses (the rental & my primary) into one loan. I also pulled additional cash out on that same loan to finance a 1-bedroom apartment addition on my current primary residence (which I obtained a zoning variance for earlier this year). I am working on the construction documents for that addition now, but that's another post....

So at this point in my journey, my fears are gone because I now know that I can afford the monthly payments even if it sits vacant. It obviously wouldn't be ideal, but knowing I probably won't lose my hat takes a huge weight off of my shoulders. 

I was planning to rent it for around $950/month, but listening to the advice of one of my clients who invests in that neighborhood, I decided to list it for $1,195. Because, why not? If I don't get a bite in a week, I'll lower it. Surprisingly the listing did really well. It actually hovered in the top 10 viewed listings for almost a month. I took photos with a wide angle lens that I borrowed from work. I also paid an online company $32 to virtually stage the living room, and I really think that tiny investment brought a lot of people to my listing. It's something that I always see on higher end listings, but never in C-class. I think it gave me an edge over some of the other listings.  

Anyway, after being listed for about a month, I am happy to report that I signed a lease with a nice couple yesterday. It rented for the $1,195 (+ $55 pet fee). 

After stashing maintenance, Cap-Ex & vacancy reserves, It will cash-flow $313/month. ($0 out of pocket).

So, I just want to thank you guys for being the positive voices that I needed when I suffering from fear.....

Warmest Regards,

Rob

Thank you. This is very helpfully. 
My advertisement allows for wiggle room with credit score. I list my criteria, and say this about credi score:

“Min Credit Score: 600 (this is flexible depending on parameters of derogatory marks)“

Hello All, I am currently looking for a tenant to fill my first rental property. A little background; The property is located in a less-than desirable part of town, but the house is nice & clean.

I have one guy who is very interested in moving in. He hits all of my requirements except credit score. His credit score is terrible, but he doesn't have any debt. there was a past non-payment issue on an auto loan that he claims was his daughter. He has agreed to pay an additional 1 month security (PA allows this, but must be returned after the first year) His previous landlord of the past 3 years is his brother.

On paper, he technically makes enough money (3.5x rent). His income comes 1/3 from retirement and 2/3 from a job that he has been at for 6 years. He is supporting a wife & 3 kids. What would your opinion be on accepting this tenant?

Thanks a lot,

Rob

Thank you everyone. Zillow was able to fix the problem. 

@Adeeb K.You may still have time. As mentioned, there is a grace period. I would ask the current owner to pull a new rental licence now. At least then you'll know where you stand 

@Bjorn Ahlblad, I did send a request through their website, but I can't seem to find a customer service number...