All Forum Posts by: Troy Sheets

 That's what I thought you were saying, but I'm confused as I have friends that have done full gut rehabs with budgets for construction well over $100k (total loan amount was over $200k, construction portion only was well over $100k) using a 203k loan, so not sure where you're seeing a max of $30k for rehab allowed? 

I'm aware it's a rehab. Not sure what FHA and $30k have to do with each other, can you clarify that for my knowledge?

My statement was explaining to Eric Greenberg, who I tagged in that comment, that the rehab tax abatement which Kahleah will be applying for, remains fully intact. Only the new construction tax abatement is being effectively halved starting 1/2021. 

They're effectively halving the new construction abatement starting 1/2021, no changes to the rehab abatement. 

This is a 10-year abatement for improvements to existing residential properties containing one or more units. It is not available for hotels.

The abatement starts on January 1st after the owner certifies that the improvements are complete.

You must file the certificate of completion and an affidavit stating the completion date with the OPA before the abatement value can be assessed and started.

Link here...sounds like for rehabs you file once you get your C.O. I know new construction is no more than 60 days after you get your building permit and people do miss that window. 

 Hey Matt, great question! I build most of my projects myself but since I generally work with out of area investor partners on my projects, these costs are generally what any GC in this area would charge. I know there are probably some cheaper and I know there are more expensive GC's out there, but these should be good ballpark costs, although there are a ton of variables of course. 

Thanks for the mention Mayer! 

@Alex Capozzolo I've done quite a few new construction projects in Philadelphia, mostly in the 2-4 unit range, but some larger as well. The costs ROUGHLY range from $105-$120/ft for new construction single family on the low end (if you're careful on costs/finishes, otherwise you can easily run way over that with more expensive flooring, appliances, etc.) and multis can run $120/ft and go way, way up from there. 

Some factors affecting costs are: 

- how small the units are - a 1500 sq ft house will be much more per sq ft vs. a 2500 sq ft house, similar to (10) 1 bed units will be much more per sq ft than (10) 3 bed units because the more you stuff into a smaller box, the cost per foot goes up, and you still have the same costs of a kitchen, hvac, foundation, etc. but you're spreading those same costs across much less square footage. I learned this lesson the hard way when I was building a few ~2400 sq ft single families coming in at around $105-$110/ft and then picked up a lot that only allowed a 1700 sq ft single family. I budgeted the same $/sq ft number and got crushed on that one. I don't know what the final per ft number on that house was but it was easily $25k-$30k over budget. 

Some other factors:

- do you need structural steel which you can run into with odd shaped or wide buildings, especially if you're trying to get large clear spans or if you're going up to 5 stories. With 5 stories it's usually most economical to build the first floor out of steel and then stick frame the upper 4. You also run into a whole other level of fire ratings when you go to 5 stories. 

- if the city water pressure is low in your area you might need a fire pump which could double the cost of your sprinkler system. It hasn't happened to me but I know someone that it did happen to. 

- if you need two stairwells and an elevator, that will of course drive costs way up and it also eats into your floor plate area and can crush layouts on a smaller building, possibly turning your small CMX2.5 lot you'd planned to build 5 stories on into what may as well be a CMX2 lot and allow only 3 stories, since you can't actually fit 2 stairwells, an elevator, a hallway all the way through from front to rear, a small lobby, a mail room, etc. Learned that one the hard way...

It's really tough to nail down accurate build costs unless you have plans to get quotes but if you want to reach out, feel free and I'll give you my best guesstimate and can potentially save you from some of the mistakes I've made. 

Welcome Daniel! I work with out of state investors often here in Philadelphia for the reasons you mention, and most are either from NYC or California. Great salaries but they just can't find anything that cash flows in their market. Are you considering single family or multifamily? 

SHOULD be no side setbacks for RSA5 and on a corner you can build up to 80% of the lot depth. There's also a minimum yard depth of 9' unless you have a lot less than 45' deep then it goes to 5' min yard depth for the first floor and any upper stories revert to the 9' rear setback. 

All of that said, you won't be able to build a separate unit by right on RSA5. Maybe you can get around it with some sort of trickery but ADU's or a full on second unit won't be allowed. Not quite sure about inlaw suites as I've never done one but it sounds like another unit to me and likely will to L&I. Let us know what you find out, I'd love to know if there's a workaround or these are allowed by right.

If you want to send me the address I can take a look and let you know what you can do by right. It's based on zoning classification and lot size. You may be able to expand without a variance if the lot is large enough but if you need a variance, you're in for a bumpy ride. Best case, pre-virus, it's at least a 4 month process on top of building permits but can take much, much longer to get a variance and there are no guarantees, it depends on if the neighborhood approves it or fights it and it is neighborhood by neighborhood. A few are ok with development, some are hit and miss, and some will fight you tooth and nail to prevent it, and they often can prevent it. Additionally, right now no neighborhood groups are having meetings so all variances are on hold from what I'm seeing and there's no resolution on the horizon I'm aware of. If you're serious about pursuing this you'll need a zoning attorney, happy to refer you to a good one if you like. 

 Everyone waited for the showing restrictions to lift before listing so they didn't have a stale listing since they couldn't actually show the house. Also, people were afraid to have others coming through even once restrictions eased. I think life with the virus is normalizing a bit and people are open to having buyers coming through their occupied house now, so for those two reasons we're seeing a jump in listings. I'd guess the interest rates and time of year also have something to do with people putting their houses on the market, it's a good time to move up. My wife and I are talking about putting our place on the market to move up just because prices are up and interest rates are down, but we'd still stay in the city. I don't think the virus or the protests will scare away too many people from city living. I don't know anyone leaving Philadelphia because of either, although I'm sure there is some small percentage that will.