Historic House 2nd Floor Update

So we are moving along in this process.  It took awhile getting our permitting straight, but we are now ready to close this place up.  Check out the second floor layout!

Philadelphia House Flip #9 - Beatty Road

Work is underway at the Springfield house!  The original plan was to knock down the existing structure and start from scratch; however, banks refused to fund new construction.  Plan B is a complete gut/rehab.

The property sits on an acre of land, which is substantial for this area.  The finished product will be a 4 bedroom/2 bath, with a full, finished, basement.  Purchase price was 155k and we have budgeted 90k for construction costs.  The property will be listed for sale at 325k.

Beatty Front and Back Yard

BEATTY ROAD - First Floor

BEATTY ROAD - Second Floor

Historic House 1st floor Update

We are closing up the walls on Tuesday.  Here is some video I shot in the house last Friday.  We are planning on being completed the first week in April.  I now have a minor in historical renovations.  

Stick & Move

In this business, there are a ton of things moving all at once.  For example, I currently have homes waiting to be fixed, other homes under construction and still others waiting to be sold.  It is constant balancing act, requiring lots of attention to detail.  At any given time, I need to be looking at houses, meeting new contacts, whatever it takes to get the deep deals.  I now have a home now that is 110 days on market but if I were to stop and worry about it, I would never get anything accomplished.  Instead, I adjust to the changing market forge ahead - always looking for the next deal.  Sitting idle in this business is not an option.  I'm always bobbing and weaving my way to my goals!!

PEOPLE HATE F@#% CHANGE!

So on Nov. 12th we went in front of the historical commission in Society Hill.  We were looking to put a 10 foot addition on the historical property we bought.  We needed the blessing from the committee, so we could go in front of zoning and get approval.  In Philadelphia code book states you need 30% of your lot as outdoor space.  We were asking for a variance that allowed us 24% lot coverage.  Not really a big deal, because we can build "By Rite" 6 feet out and no one can stop us.  I was always told, if you do not ask, the answer is always no!  So why not try to get 4 feet out of the deal!

 So we are first up to present in this meeting and I start telling them why I want to build out to 10 feet.  First reason is that both of my neighbors have additions that are 12 feet long.  Second reason is that I want a big kitchen cause I like to cook!  I think I said "look at me I'm Italian over here!"  Well that did not go over so well.  The committee asked if any neighbors had concerns and this is when the comedy unfolded.  I had 3 people show up to oppose our addition. The first guy said he was "less than thrilled" that I'm working on the property and disturbing him.  He also stated that my addition is "effecting his quality of life".  THERE HE IS!  Sorry pal for taking a 206 year old property that has been abandoned for the last 4 years and try to raise the value of the street.

 So this went on and on.  All three neighbors said that they were concerned about the shadow my addition will cast on their homes and so on and so on!  I had one of the committee members ask me if I did a shade study on the property.  I looked right at him and laughed.  I have heard of this being done with large skyscrapers, but never on a three story single family home. Needless to say we did not get the support from the neighbors and now are building, by rite, 6 feet out.  

A couple of days later I got a phone call from the head of the committee.  She said she was sad to inform me that we were turned down due to the issues that my neighbors brought up and there was no true hardship for the extra 4 feet.  So before I got off the phone, I asked her if I could become a committee member and sit on the panel now that I'm a resident of Society Hill??  She was shocked that I would want to do this.  I figured that this would help me understand whats going on in the area and what the mindset of the people are in the neighborhood.  I also think that it will look good on my resume when I run for mayor of Philadelphia.  HA!

Last night was my first meeting and I tell you what...........holy shit!  I just sat back and listened.  Listened to people rip this builder for a new house he wants to build.  The site was a empty lot for 40 years and people were furious that he wanted to put up a house.   I started to realize that people do not do well with change and get highly emotional about it.  I started to think back on my meeting and understand that these people do not have a issue with us, they have a issue with change.  So next time I see them on the street I will go out of my way to be nice and friendly to them.  

Deal of the week - Society Hill

We are close to getting a property in Society Hill under purchase agreement.  This deal will be amazing if I get it under contract. The purchase price will be in the 180-200k range and the construction required is 160-180k.  We are confident that the value will be 550k once completed.  The key for this project will be controlling the construction budget.

Our focus is now on buying deals in areas that are going to be desirable, regardless of what is going on in the market.  I see the housing market making moves daily.  A house we had appraised at 490k 9 months ago is now being appraised at 450k.  It is something that you can only control when you buy at a deep discount.  This is how we mitigate the risk.  Buy as deep as you can today, to avoid being upside down tomorrow!

DIY: Part 3 Galardi Bathroom renovations

So last Friday I go see my boy Mark Galardi.  Most of you have seen the renovation of his bathroom and we finally have a new video and update.  About 5 years ago Mark started the demolition of this bathroom and now he is almost complete!  I have been breaking his balls to just hand me over the cash to do this for him, but he refuses!  Not for nothing but I do know how to make a bathroom knocked out on a budget!  Check it out!

"It's as easy as 1,2,3,"

"can't rush art"

Buy & Hold - Rental Property Update

I sit here today going through all of our rental property mortgage statements and start to see things that really get me excited.  I am finally seeing the principal balances starting to drop considerably.  We have a portfolio of properties that other people (tenants) are paying off for us.  As I see the principle balances decreasing, it translates to some light at the end of the tunnel.  From our perspective, these properties are on a 20-25 year plan.  This plan began in 2003.

In my opinion, the next 3 years will be an unbelievable time to start scooping up buy and hold properties. With the trouble going on in the world and the fact the Federal Reserve is going to keep interest rates low for the next couple of years, this means opportunity for people wanting to get into the market.  Here, in Philadelphia, we have seen rents jump in price about 8-10% in the last year!  Love it!

Just remember the 3 most important parts of real estate investing...........LOCATION, LOCATION, LOCATION!  Mitigate risk, by securing the right location.