All Forum Posts by: Steven Goldman

Each State has their own laws regarding the escrowing of security deposits. @JackWiley is correct that best practice is to escrow your security deposits in a interest bearing account. While it is customary for security deposits to transfer  when you are buying an occupied residential property, your contract should state that the seller will transfer all security deposits at time of settlement. Good luck!

You replace your half. The roofer knows the drill. If you can work with the other owner to do both, it will result in a discount on the job and make for better curb appeal. Good luck,

@Andrew C. No they are not. Many realtors I know have 20 or more doors in that configuration as they are cash cows.

Short not all inclusive summary of regulations:

You need a Zoning Permit for limited lodging to rent your home for up to 30 consecutive days to any one person or group.(This is about taxes)

You need a Zoning Permit for Visitor Accommodation:

• To rent your home for stays of 30 days or fewer.
• If the property is not your primary residence.

Housing requirements

• Smoke alarms must be installed:
  • In each bedroom.
  • In the hallway in the immediate vicinity of the bedrooms.
  • On each floor of the home, including basements.
• Carbon monoxide alarms must be installed:
  • Within 15 ft. of the entrance to every bedroom or within 15 ft. of a bed in sleeping areas if there isn’t an enclosed bedroom.
  • Centrally on a wall or the ceiling, but not directly in front of a door to a bathroom or within 5 ft. of a cooking appliance.
  • Under the installation requirements for smoke alarms if they are combination smoke and carbon monoxide alarms.
• You can’t post signs for lodging on your home.
• The home can’t be occupied by more than three people (including the owner and renters) who aren’t related by blood, marriage, life partnership, adoption, or foster-child status.
• You cannot change your house so that it no longer resembles a private residence.

Information you must provide your renters

• Renters are only allowed to have guests between the hours of 8 a.m. and midnight.
• You must tell renters the trash and recycling collection days and any trash disposal rules and regulations. You must provide proper trash containers for renters.
• Excessive noise is prohibited and violators are subject to fines and penalties.
• The owner or their designee must provide contact information to the renters. The contact person must handle any complaints from the renters.

It is not that onerous and the licensing procedures are available on line.

I always recommend that you speak with a accomplished realtor in the area who deals in short term rental properties. DM me if you want a recommendation.

Financing is always challenging are you looking for a JV partner or a funding company. Funding companies can give you deal specific bridge financing including 100 percent of the construction costs and 85 percent of the purchase price. You still need sufficient capital to cover the down payment, closing and loan costs.

@Naftali Green   dm me and I can make a suggestion. 

I highly recommend that you reach out to both a fix and flip lender and a debt service coverage lender prior to signing an agreement of sale. The project only works if your financing works. In our experience we would rather know about the deal prior to it being submitted to us to  insure that the deal makes sense from a financing standpoint. Often sellers want a pre-qual or pre-approval prior to showing the property. So if you are house hacking you will have a pre-approval from a GSE lender. If you are investing, Fix and flip or funding companies analyze each deal based on its metrics. So you are far better off with having that information in your pocket before you make an offer on a specific property. Your lender should be able to evaluate your deal within a few hours and let you know if it works. I hope that helps. 

The short term rental market in Philadelphia is on fire. 

Many D.S.C. lenders do not work in greater than 1-4 units. Some lenders will lend on multi families. They will restrict the LTV to below 80 percent. I do not know if that helps you.

Its hard to say where to start. First, treat the sale like the seller is a stranger and do complete due diligence! Is the purchase price reasonable?  How is it being calculated? What interest rate is being added to the value of the properties to reach the sale price?  You must first determine the value of the properties and than the cost of the money to see if it is a good deal. I would also check the condition of the properties Friend or not, desire to sell is often driven by bad news about maintenance or other expensive repair factors. If you stick to sound real estate principles you should be able to make the deal with confidence that it makes sound economic sense for you. 

@kennethmendonca was spot on. So much multi family inventory exists in Chicago because national lenders are reluctant to lend money in that market due to existing significant challenges. I always recommend that you talk to a mortgage professional as part of your due diligence  to identify the challenges to entry in the market. A good mortgage consultant will be a wealth of information. Good luck!