All Forum Posts by: Ethan Giller

Daniel, congrats on your first purchase!

Generally in our market, there aren't many "project managers" who will monitor a renovation for you. I'm sure there are some out there but it's not a very common setup, because you are then hiring someone to manage construction for you and that's what a general contractor does anyway, so you are basically putting two levels of management in place. Your best bet if you're looking for that kind of thing is to find a property manager who offers renovation services and then they can also manage the rental for you, but they will likely charge a 10-20% premium for the renovation compared to just hiring a general contractor yourself.

In terms of lawyers to bring to closing, in PA we use title companies not attorneys for closing. Although the customer service of title companies varies significantly, the actual title premium is set by the state and is the same regardless of which title company you use (although some title companies do tack on 'junk fees' such as settlement fee, doc prep fee, etc.)

If you have specific questions I'm happy to help out where I can if you message me privately.

RSA-5 doesn't allow for multi-family zoning without a variance. So even for triplex use, it either needs a variance or needs to be grandfathered in (with a rental license showing 3 units). To convert to 4 units, you'll definitely need to go through the zoning and variance process, which involves meeting with the community RCO then going in front of the zoning board (ZBA). Additionally, even if you do get the variance successfully, you will likely need to conform to current construction codes for 4 units which includes sprinkler system, fire panel, and other fire code items.

You aren't liable for old wiring so long as it's clearly shown on the seller's disclosure.

Older wiring will almost certainly affect the resale value, possibly so much so that a buyer would back out of the purchase after the inspection or request a substantial discount, so it really depends on what your plan is with the property. If you're doing a full gut or semi-gut renovation anyway, and trying to sell near the top of the price point for the area, then yes it's definitely a good idea to spend the extra money to redo the wiring now. If you're only putting in some basic cosmetic upgrades, and leaving older plumbing and mechanicals otherwise, and asking a low price for the location hoping for a quick sale, then you can likely get away with leaving it.

I believe that most buyers in the Girard Estates area of Philly (higher priced homes) are going to be looking for a final product that has updated wiring. Especially because older wiring can affect the buyer's ability to get insurance coverage.

They are not the same thing, but if the building was constructed prior to 1969 without undergoing a change in occupancy type and no major renovation permits pulled, it will likely not have or require a CO. See: https://www.phila.gov/li/pdf/Code%20Bulletins/Cert...

In most cases, if the U&O is clear, you have a rental license in hand for the correct number of units as you expect to rent (if applicable), and there are no open permits on the property (check: www.phila.gov/li) then that's all you need.

Hey Eric, welcome to BP! 

The main issue that you'll run into with what you've proposed is that you cannot legally rent out 4 rooms separately in Philadelphia. The most number of unrelated tenants you can legally have in a single property in Philly is 3. Even then, they would all need to be on one lease not separate leases, which is somewhat difficult to set up. While people certainly do get away with renting out each room separately, on individual leases and with more than 3 unrelated tenants per house, it is not technically legal and is a much harder rental strategy than just renting out the house to an existing family. It can also make it more difficult to finance the property and to resell the property unless you are reselling it vacant.

If you run the numbers on this one, your rent as a single family house is probably going to be more in the $1.5K-$2K/month range, so the numbers don't work that well.

Plus, this is probably your best comp, so you aren't really buying it at a discount if you are all-in for around $275K.

https://www.redfin.com/PA/Philadelphia/3811-Sharp-...

Nicholas, what kind of stories are you looking for?  Philadelphia has a lot of great investment opportunities since the city has a ton of blighted inventory, often with title issues or zoning issues to resolve, and also a ton of vacant land.  Real estate pricing has of course gone up everywhere in the last few years of course as interest rates stay low, the economy is strong, and investors join the game.  But in my opinion, there is still plenty of opportunity in Philly.  It's important to figure out what your business strategy is, and what your value-add proposition is.

I know that folks have been successful in each one of these niches in Philly real estate, just depends on what you are looking to do (in no particular order and just off the top of my head, I'm sure that I'm leaving a bunch out): low-income rentals, luxury rentals, flips, vacant land speculation, new construction, section 8/PHA rentals, wholesaling, wholetailing, bird dogging, turn key sales, property management, construction management, financing expert, zoning expert, title expert, business procedure consulting, hard money lending, seller financing, buying subject-to, syndicating deals, 1031 exchange scout, retail sales, etc.

Personally, I've set up a pretty decent rental portfolio over the last few years, that's what made sense for my investing goals and setup.  But there's more than one right way to do it depending on what your "unfair advantage" is (per @Brandon Turner) and your investing time horizon and your ideal day-to-day setup.

@Dan Red in addition to the point made by @Jeremy Chaudet, consider that if you already have 10 rentals in one county, and therefore presumably know at least decently well how things work in terms of licenses, permits, taxes, utilities, public records, landlord-tenant laws... and have at least some network of contractors, lawyers, property managers, lenders... is it really worth while to try to learn all of that and create a new network in a different county and state, with its own way of doing things?  

Unless you are testing out the waters because you think you will buy another 10 in Camden, my personal preference is to stick with what you know and not be distracted by the 'shiny objects' across the river. Think about your economies of scale by sticking with one location, it just so happens that you started with Philly, if you had started in Camden then I would say the same thing. I believe that money can be made in any market with the right investment strategy, but there is so much power to having local knowledge that I think that far outweighs any potential increase in the ROI.

@Shawn C. welcome to BP!  Some advice:

1) Start by finding one or more real estate agents in the area who can help you locate properties.  BP is a great source of knowledge but nothing beats having someone you are working directly with who is experienced with investors.  A good agent can help you locate properties that make sense for your criteria, and a great agent will have a source for off-market investment deals too.

2) Stay away from sheriff sales until you are more experienced.  In Philly at the moment, it is hard to find a good deal there, at best you won't be able to sell (with clear title) or refinance for over a year from the date of the sale, and most times you don't get to know much about the interior of the property prior to purchase.  Keep it in mind as something to explore in the future once you have a few deals under your belt but don't worry you're not missing out in the meantime.

3) Consider signing up for HAPCO and DIG, two groups local to the Philadelphia area with a lot of great advice and members.

4) Go to local networking events (check out meetup.com, among others) to meet other people in the area who can help you achieve your goals.

Best of luck and have a great 2018!

@Christopher Oliver & @Michael Singh, not to shut down your real estate goals, but I think you will find it extremely difficult to find a reliable contractor to give you quotes for deals you are "looking at", especially if you are out of state.  The affordable and reliable contractors here have steady work currently, so don't have the need or time to be bidding jobs for properties not already purchased or where they get the sense they will just be one of many competing bids.  Philadelphia is getting to be a hotter market, so I think your best bet is to look for a local partner who can be your boots on the ground, and is experienced enough to ballpark rehab costs already.  If you have the funds available and you find someone with local real estate knowledge and construction knowledge, I think that would be a much more beneficial ask on here then looking directly for a contractor, which is what everyone is looking for so there is a lot of competition.  Any competent contractor is going to prefer to work with the investors who are local and who already own the property, so the only contractors left the bid your jobs are those who are desperate for work for some reason (not who you want to work with).

Just one man's opinion, based on my experience.

Good luck though, Philly does have some great deals!

@Gerald O'Brien a quiet title action means that there is uncertainty regarding who has legal claim to the property, and someone (likely an investor since 1528 N Leithgow St is a 500 sq ft vacant lot, not a house) is trying to buy it or establish their claim to it.  My advice is that your best course of action is to contact the investor who is trying to purchase it and offer for you and your siblings to sign a quit claim deed.  This relinquishes any claim that you have on the property, while not actively claiming you had any claim in the first place.  Depending on exactly the situation, the investor may be willing to pay you some money for your efforts as they may then be able to get title to the property more quickly and avoid court costs.  At any rate, you have nothing to lose by establishing a direct line of communication with whoever has filed the claim, and seeing what you can negotiate.  Best of luck!