All Forum Posts by: Steve Babiak

This is in the suburbs, but Prosource Wholesale might have something. And nobody has yet mentioned Lumber Liquidators, General Flooring, or Floor and Decor.

That notary fee is ridiculous unless the notary is traveling to your house for settlement. Sounds like they are expecting to charge a fee per page rather than a fee per document.

And as others have already stated, the transfer taxes are too low. The real number might shock you. Hopefully you aren't buying a HUD foreclosure where you would have to pay 100% of the transfer tax.

 If you are located outside the City of Philadelphia, the number to dial in order to connect with 311 is 

(215) 686-8686

NOTE to moderators: that is a phone number that should not be deleted.

 Philadelphia rowhomes rarely will have an attic or crawl space to worry about; I have seen partial crawl spaces that were beneath an addition to the house, and those are for the most part the only crawl spaces in a Philadelphia row home.

The remaining concerns are valid, and quite frankly only scratch the surface of issues that occur.

But now we begin to digress from the original question of whether there are checklists. They certainly exist; whether everyone is capable of their proper use is a different matter, as you have noted.

There’s an app for that: 

Home Inspection Ready

Version 1.6 for iOS 9 and higher

500 votes on the original post on this topic … hopefully all who voted this up have benefited.

In addition to DIG that has members of varying levels of experience, you can check into 

@Dave Van Horn who has a mastermind group in the Philadelphia area.

Depending on how you look at things, the principal paid on a loan is not an expense - you certainly can’t deduct that principal paid from your tax returns for example. Principal paid on loans does reduce your net cash flow. But it also increases your net equity in the property.

Another factor to consider is appreciation. Some rentals go up in value, others don’t (or go up only minimally). This might affect whether you continue to hold a property that has little net cash flow - if such a low cash flow property goes up a good amount in value every year, at some future point you can sell to realize the gains.

Good answers so far. You put a draw schedule together, that establishes two things: what tasks must be completed to make a payment due, and the amount of that payment. Of course, you will have contractors who want to be paid prior to those tasks being fully completed - you then have to review with them what they omitted. No payment without being fully complete, or, you make a written change order that reduces the payment amount significantly for that draw while leaving out that which was not completed. And add the omitted work into a future payment draw.

This discussion then leads to a question of how to set up draws in the first place. Maybe the contractor wants a payment every week, so you look at the itemized estimate you have and together you figure out what tasks will be done in each week. But it’s easier to break things up into four or five draws, and together you identify what tasks are to be completed to comprise that draw. The value of the draw then becomes the total value for the tasks that were included. If tasks within a draw require a municipal inspection, then passing of the inspection should be required for that draw to be paid.

Retainage / holdbacks are another consideration. This is an amount that is typically say 10%, to cover situations where completed work has issues, and it is intended to motivate the contractor to correct those issues.

Then there is the matter of subcontractors. If payment for subcontractors was included in a draw given to the contractor, how do you know the subcontractors were paid so that they do not file for a mechanics lien? So you will have to require lien releases and lien waivers. Or better to insist on paying subs yourself directly, so you can get those lien waivers in person. This implies that you know which tasks will be subcontracted and who the subs will be. And maybe you disallow subs in the first place and hire those yourself.

A lot goes into this to make sure you are covering yourself. 

My friend @Dave Van Horn hosts a Philadelphia area mastermind.

There are also groups such as DIG and HAPCO, both of which I recommend, that have memberships composed of investors from the Philadelphia area.