All Forum Posts by: Ethan Giller

Nothing ventured, nothing gained!  Do it and report back every couple months with an update on how it's going.  But listen to some of the podcasts & read some of the blog posts on direct mail first in order to get the most return on your marketing dollars.

And if you find any deals through this process that you are looking to wholesale, send them my way!

-Ethan

Will be interesting to see what this ends up selling for...

http://philly.curbed.com/archives/2015/03/02/first-look-twobedroom-in-brewerytown-asks-260k.php

@Antonio Cerqueira 

Thanks for the information but that code does seem to indicate that it is required still for two-family townhouses?  Regardless, I was mostly asking about your actual experience with L&I pulling permits.  Although I did have to put a sprinkler in my new construction duplex, it could be for duplexes this only applies if it is three stories?

Most of my experience with pulling permits and having to install sprinklers is for 3-4 units.  So you guys actually end up pulling permits for full gut rehabs and then installing sprinklers in all of your properties that are 3+ units?

@Antonio Cerqueira 

Thanks for replying, but you didn't actually answer any of my questions.  I'm wondering *why* you aren't required to install sprinklers?  Are you not getting major alteration permits for your total rehabs?  I know a lot of investors in Philly get around the requirement by doing the work under the radar and not pulling the required permits, but I figured at 20 properties/month that's not an option for you guys.  Or are you advertising 'total renovations' meaning less than a full gut rehab?

This is an investor community so any information you have that would help others navigate this issue, I'm sure would be greatly appreciated.

@Roy N. 

 Yes, this is a local code requirement, specific to Philadelphia when you change zoning to multi-family or do a full gut renovation.

@Roy N.  - I am by no means an expert on the Philadelphia permitting process, but it's my understanding (and has been my experience) that for a total gut renovation such as this to be done legally, one needs to pull a major alteration permit.  Pulling this permit results in the requirement that everything is up to new construction standards (i.e. no grandfathering), which includes sprinklers, even in duplexes (just did a new construction build of a duplex so I'm pretty sure about that one).

I believe that multi-family in Philadelphia is anything more than a single unit per tax parcel.  I think you are referring to residential lending (1-4 units) vs. commercial lending (5+ units)?

@Antonio Cerqueira  - What kind of permits do you pull for these renovations to get around the sprinkler requirement?  Are you getting inspectors who are letting you get away with EZ Plumbing & EZ Electrical for this amount of work?

Did you install a sprinkler system?  If not, how did you pull permits for a total renovation of a multi-family dwelling in Philadelphia without being required to install a sprinkler system to comply with the current code?  This is a problem that I've run into with my own renovations in Philly so I'm curious how you handle it.

Obviously there is a lot of variability in costs depending on exactly what is needed an finishes you need.  But my instinct is that you could get that done with the right GC for ~$75K, but if the guy is professional and does good work then he is going to be hard to find and in high demand.  What I mean is, my go-to contractor could probably do it but only because I give him steady work and basically full-time employment... he would charge more for a one-time client.

So most of the bids you get around the $75K price will be from guys who won't perform the job successfully for some reason (slow, poor work, hard to deal with, requires lots of oversight, no permits, bid didn't include everything, won't finish the job, etc.).  I would add $10K-$20K to your budget in order to find a trustworthy GC, especially if you are going to be mostly hands off.

If you are considering doing all of that work, especially if you are going to make it 'above average', you should strongly consider flipping it.  If you are in a good part of Francisville and the rehab will be done in Spring/Summer, you should be able to maximize your profit by selling and then using that money to buy rentals in areas of Philly that have higher cap rates.  Just a thought.

If you are inexperienced and you don't have substantial capital reserves, in my opinion you should not start out by going to auctions.  That's a fast way to turn your hard-earned savings into a hard-to-get-rid-of mess!  If you have two other partners and you are all new to real estate, make sure your expectations and responsibilities are VERY clearly defined (and documented).

You should start out by going to real estate meetups and network with other investors.  Find some to partner with, or just tag along on their projects.  Listen to all of the BP podcasts.  Get prequalified for mortgages.  Talk with contractors.  Get to know your target market.

There is something to be said for jumping right in and getting started... but it will be a very expensive education.

You will have to pay NPT & BIRT in Philly though: http://www.phila.gov/Revenue/businesses/taxes/Page...

School income tax is paid by the residents: http://www.phila.gov/Revenue/individuals/taxes/Pag...

But generally you are correct, you will likely pay less property tax in Philly than in the suburbs.  And yet no one can figure out why the school are in trouble.

$62,000!!!

HUGE PRICE DROP, looking for a quick sale.  That's only $15/sq foot for a beautiful triplex.

Cheaper than a lot of the single family houses in Norristown! Anything less than this and I'll close on it myself and put in basic kitchens, bathrooms, paint and carpet, and re-list it on the MLS.

http://philadelphia.craigslist.org/reo/4847869835.html