All Forum Posts by: Ryan Fagan

It's not unreasonable for the seller to ask for a higher deposit.

The perceived risk to earn 8% in a real estate deal makes the 8% unattractive.  There is also an opportunity cost, 8% may be good in your local market but there are markets that you can earn well over 8% with a similar risk profile.

Just my one or two cents.

I like Microsoft Project but it does have a steep learning curve.

I am dealing with this very issue at the moment. My Dad owns a house that squatters broke in and started using it for a drug house.  My dad called the police and was working to evict them, but before he got them out the police raided the house and the city seized the property.  Now I am working with my Dad to get the property back and it is very difficult.  We were able to convince he DA that my Dad was not renting to them and he tried to remove them, so now we are just waiting for the next court day to hopefully get the property "released" from the city so we can offload the house.  This has been a year long process and the worst part is we had the house under contract and on the closing day the DA contacted the title company and stopped he sale.

If you haven't seen the John Oliver show you should check out he one about civil asset forfeiture, it's amazing what the city can do.

@Jordyn MatusevichWelcome to BP!

When you are "house hacking" aka buying a multi-family and renting the other units the way you look at an investment is different. You obviously like the property and the location so there is value there. If you can buy a property in a good location for less than what you currently rent, that is great because you are building equity rather than just paying rent. Your numbers look good, if you qualify for FHA you would only have to put 3.5% down plus closing costs.

When I analysis your deal and include vacancy insurance and repairs I have this house costing you about $981/month, still less than what you pay.  If you like the property and the location, and it is in a "hot" part of the city then this is a decent deal.  You reduce your housing expense and you start building equity in a good asset that may appreciate over time.

My analysis as an investment (both sides rented):
Gross Rent 1300x2 = $31,200

Less Vacancy (10%) = $3,120

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Gross Operating Income = $28,080

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Less Property Tax = $4,500

Less Insurance = $2,500??

Less Repairs (15% of rent) = $4,680

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Net Operating Income = $16,400

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Less Annual Debt Service @ 3.5% down, 30 years @ 4% interest = $17,691

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Cash Flow Before Taxes = -$1,291

Return on Investment -11.5%

Overall, owner-occupied investments are difficult to give advise because it really depends on what your preferences are about the property since you will be living there.  From the pure investment side, you would have negative cash-flow which I personally like to stay away from but there are areas of the city that it would be worth it to take the negative cash flow to get appreciation long term.

@Christopher Noto  Welcome to BP!

Why would you wait to start investing so you can avoid PMI? Wouldn't it make more sense to concern yourself with ROI?

@Mehdi El H  Welcome to BP!

Bigger Pockets is the go to source for learning about real estate investing.  

19135 (Tacony) has higher cap rates than Mayfair.  If I am looking for cashflow Tacony is much better IMO.

Hey Mike.  The Philadelphia market is broken up into different neighborhoods, and the market can vary wildly from section to section.  I am an expert in Northeast Philadelphia where you can find cash flow properties with a cap rate between 1% to 1.5% on average.  There is potential for appreciation plays by Temple University, Fishtown, or Northern Liberties.  

You can find total rehab properties under 50k across North and Northeast Philadelphia.