Commercial RE 101: Any suggestions

[sdrealtor]

Listen to UCGal its obvious to me she knows what she is talking about. I too love Philly but I understand it in ways you never will. Its my home town and I have tons of childhood friends I stay in touch with.

The immigrants live of the periphery and alot of what they make is through cash businesses. Tax fraud and getting cash discounts in neighborhood stores is well accepted there. It is a world you know nothing about and could take a beating in.

Chinatown has been there for probably close to 100 years. They live their own sheltered existence in their own world. Many illegal businesses are carried out in the backs of the restaurants and stores you see.

Its not like SD where races and cultures mix more freely. The fact that we dont have a Chinatown in SD is a good thing in my mind, its speaks to an inclusionary society unlike the exclusionary society in Philly where each ethniciaty stays far more segregated.

There is far more opportunity in CA for young entrepreneurial immigrants than in closed societies like you find back east.

Proceed at your own risk.

[UCGal]

One last point about Philly and potentially buying/improving property in Philly.

As you guys know – my husband is an architect. So he obviously had to deal with various governing authorities to get permits/inspections – etc. One of the reasons he doesn’t do residential is because of the graft involved. (It’s a bit more on the up and up for commercial jobs.)

Bribery is COMMON.

It’s not always cash – it could be in political access… Philly is made up of wards rather than precincts – and ward bosses control what happens in their community… you get on the wrong side of a ward boss and you face challenges you never thought of. You want a permit for something – you better be on the very best friend basis with the clerk at L&I, the ward leader, etc.

My husband had a heck of a time getting an illegally placed power box on his neighbors house moved. It was put up without a permit and encroached on hubby’s lot – the neighbors building was at the property line – so this big electrical box and power lines were 100% on hubby’s lot. The way the box was placed it made it difficult to get in/out of the garage. It was clearly in violation – but getting it resolved was challenging. He tried to get the inspectors involved to make the neighbor move it… Wasn’t happening till he figured out the system. The law on his side wasn’t enough… flattery, donuts, sweet talk (everything short of money changing hands) was absolutely required. And he had to do this for his ward boss, as well as the L&I clerk, as well as the inspector from L&I.

Don’t expect rational behavior and compliance with the law as the default when dealing with the city of Philadelphia.

Also – if you’re planning on owning rental property or running a business – talk to an accountant about the nightmare that filing Phila city taxes. They make the IRS tax forms look simple.

It’s a different system there.

[UCGal]

One last point about Philly and potentially buying/improving property in Philly.

As you guys know – my husband is an architect. So he obviously had to deal with various governing authorities to get permits/inspections – etc. One of the reasons he doesn’t do residential is because of the graft involved. (It’s a bit more on the up and up for commercial jobs.)

Bribery is COMMON.

It’s not always cash – it could be in political access… Philly is made up of wards rather than precincts – and ward bosses control what happens in their community… you get on the wrong side of a ward boss and you face challenges you never thought of. You want a permit for something – you better be on the very best friend basis with the clerk at L&I, the ward leader, etc.

My husband had a heck of a time getting an illegally placed power box on his neighbors house moved. It was put up without a permit and encroached on hubby’s lot – the neighbors building was at the property line – so this big electrical box and power lines were 100% on hubby’s lot. The way the box was placed it made it difficult to get in/out of the garage. It was clearly in violation – but getting it resolved was challenging. He tried to get the inspectors involved to make the neighbor move it… Wasn’t happening till he figured out the system. The law on his side wasn’t enough… flattery, donuts, sweet talk (everything short of money changing hands) was absolutely required. And he had to do this for his ward boss, as well as the L&I clerk, as well as the inspector from L&I.

Don’t expect rational behavior and compliance with the law as the default when dealing with the city of Philadelphia.

Also – if you’re planning on owning rental property or running a business – talk to an accountant about the nightmare that filing Phila city taxes. They make the IRS tax forms look simple.

It’s a different system there.

[UCGal]

One last point about Philly and potentially buying/improving property in Philly.

As you guys know – my husband is an architect. So he obviously had to deal with various governing authorities to get permits/inspections – etc. One of the reasons he doesn’t do residential is because of the graft involved. (It’s a bit more on the up and up for commercial jobs.)

Bribery is COMMON.

It’s not always cash – it could be in political access… Philly is made up of wards rather than precincts – and ward bosses control what happens in their community… you get on the wrong side of a ward boss and you face challenges you never thought of. You want a permit for something – you better be on the very best friend basis with the clerk at L&I, the ward leader, etc.

My husband had a heck of a time getting an illegally placed power box on his neighbors house moved. It was put up without a permit and encroached on hubby’s lot – the neighbors building was at the property line – so this big electrical box and power lines were 100% on hubby’s lot. The way the box was placed it made it difficult to get in/out of the garage. It was clearly in violation – but getting it resolved was challenging. He tried to get the inspectors involved to make the neighbor move it… Wasn’t happening till he figured out the system. The law on his side wasn’t enough… flattery, donuts, sweet talk (everything short of money changing hands) was absolutely required. And he had to do this for his ward boss, as well as the L&I clerk, as well as the inspector from L&I.

Don’t expect rational behavior and compliance with the law as the default when dealing with the city of Philadelphia.

Also – if you’re planning on owning rental property or running a business – talk to an accountant about the nightmare that filing Phila city taxes. They make the IRS tax forms look simple.

It’s a different system there.

[UCGal]

One last point about Philly and potentially buying/improving property in Philly.

As you guys know – my husband is an architect. So he obviously had to deal with various governing authorities to get permits/inspections – etc. One of the reasons he doesn’t do residential is because of the graft involved. (It’s a bit more on the up and up for commercial jobs.)

Bribery is COMMON.

It’s not always cash – it could be in political access… Philly is made up of wards rather than precincts – and ward bosses control what happens in their community… you get on the wrong side of a ward boss and you face challenges you never thought of. You want a permit for something – you better be on the very best friend basis with the clerk at L&I, the ward leader, etc.

My husband had a heck of a time getting an illegally placed power box on his neighbors house moved. It was put up without a permit and encroached on hubby’s lot – the neighbors building was at the property line – so this big electrical box and power lines were 100% on hubby’s lot. The way the box was placed it made it difficult to get in/out of the garage. It was clearly in violation – but getting it resolved was challenging. He tried to get the inspectors involved to make the neighbor move it… Wasn’t happening till he figured out the system. The law on his side wasn’t enough… flattery, donuts, sweet talk (everything short of money changing hands) was absolutely required. And he had to do this for his ward boss, as well as the L&I clerk, as well as the inspector from L&I.

Don’t expect rational behavior and compliance with the law as the default when dealing with the city of Philadelphia.

Also – if you’re planning on owning rental property or running a business – talk to an accountant about the nightmare that filing Phila city taxes. They make the IRS tax forms look simple.

It’s a different system there.

[UCGal]

One last point about Philly and potentially buying/improving property in Philly.

As you guys know – my husband is an architect. So he obviously had to deal with various governing authorities to get permits/inspections – etc. One of the reasons he doesn’t do residential is because of the graft involved. (It’s a bit more on the up and up for commercial jobs.)

Bribery is COMMON.

It’s not always cash – it could be in political access… Philly is made up of wards rather than precincts – and ward bosses control what happens in their community… you get on the wrong side of a ward boss and you face challenges you never thought of. You want a permit for something – you better be on the very best friend basis with the clerk at L&I, the ward leader, etc.

My husband had a heck of a time getting an illegally placed power box on his neighbors house moved. It was put up without a permit and encroached on hubby’s lot – the neighbors building was at the property line – so this big electrical box and power lines were 100% on hubby’s lot. The way the box was placed it made it difficult to get in/out of the garage. It was clearly in violation – but getting it resolved was challenging. He tried to get the inspectors involved to make the neighbor move it… Wasn’t happening till he figured out the system. The law on his side wasn’t enough… flattery, donuts, sweet talk (everything short of money changing hands) was absolutely required. And he had to do this for his ward boss, as well as the L&I clerk, as well as the inspector from L&I.

Don’t expect rational behavior and compliance with the law as the default when dealing with the city of Philadelphia.

Also – if you’re planning on owning rental property or running a business – talk to an accountant about the nightmare that filing Phila city taxes. They make the IRS tax forms look simple.

It’s a different system there.

[briansd1]

UCGal, thanks for the input. It’ll keep it in mind.

[quote=UCGal] My husband bought a home in Frankfurt in the early 80’s (north east) -saw the white flight first hand when the first black family moved in. He sold it after 20 years, after doing significant improvements (like buying the neighboring lot and putting an attached garage on.) It only appreciated 30k in 20 years. (Bought for 10k as a shell – HUD repo, 5k in plumbing and electrical in order to get occupancy, 6k for the neighboring lot, 3k to build the garage.) Put in normal maintenance through the years (new roof, new siding, new windows.) Sold for $54k. That’s not a lot of profit for 20 years of ownership and maintenance.
[/quote]

That’s a 125% gain over 20 years.

How can you not make a $54k house cash flow? You can’t even buy a studio in San Diego. That’s practically living for free. You can save good money if your house it just the price of a luxury car.

I guess I’m accustomed to prices in Downtown San Diego.

[briansd1]

UCGal, thanks for the input. It’ll keep it in mind.

[quote=UCGal] My husband bought a home in Frankfurt in the early 80’s (north east) -saw the white flight first hand when the first black family moved in. He sold it after 20 years, after doing significant improvements (like buying the neighboring lot and putting an attached garage on.) It only appreciated 30k in 20 years. (Bought for 10k as a shell – HUD repo, 5k in plumbing and electrical in order to get occupancy, 6k for the neighboring lot, 3k to build the garage.) Put in normal maintenance through the years (new roof, new siding, new windows.) Sold for $54k. That’s not a lot of profit for 20 years of ownership and maintenance.
[/quote]

That’s a 125% gain over 20 years.

How can you not make a $54k house cash flow? You can’t even buy a studio in San Diego. That’s practically living for free. You can save good money if your house it just the price of a luxury car.

I guess I’m accustomed to prices in Downtown San Diego.

[briansd1]

UCGal, thanks for the input. It’ll keep it in mind.

[quote=UCGal] My husband bought a home in Frankfurt in the early 80’s (north east) -saw the white flight first hand when the first black family moved in. He sold it after 20 years, after doing significant improvements (like buying the neighboring lot and putting an attached garage on.) It only appreciated 30k in 20 years. (Bought for 10k as a shell – HUD repo, 5k in plumbing and electrical in order to get occupancy, 6k for the neighboring lot, 3k to build the garage.) Put in normal maintenance through the years (new roof, new siding, new windows.) Sold for $54k. That’s not a lot of profit for 20 years of ownership and maintenance.
[/quote]

That’s a 125% gain over 20 years.

How can you not make a $54k house cash flow? You can’t even buy a studio in San Diego. That’s practically living for free. You can save good money if your house it just the price of a luxury car.

I guess I’m accustomed to prices in Downtown San Diego.

[briansd1]

UCGal, thanks for the input. It’ll keep it in mind.

[quote=UCGal] My husband bought a home in Frankfurt in the early 80’s (north east) -saw the white flight first hand when the first black family moved in. He sold it after 20 years, after doing significant improvements (like buying the neighboring lot and putting an attached garage on.) It only appreciated 30k in 20 years. (Bought for 10k as a shell – HUD repo, 5k in plumbing and electrical in order to get occupancy, 6k for the neighboring lot, 3k to build the garage.) Put in normal maintenance through the years (new roof, new siding, new windows.) Sold for $54k. That’s not a lot of profit for 20 years of ownership and maintenance.
[/quote]

That’s a 125% gain over 20 years.

How can you not make a $54k house cash flow? You can’t even buy a studio in San Diego. That’s practically living for free. You can save good money if your house it just the price of a luxury car.

I guess I’m accustomed to prices in Downtown San Diego.

[briansd1]

UCGal, thanks for the input. It’ll keep it in mind.

[quote=UCGal] My husband bought a home in Frankfurt in the early 80’s (north east) -saw the white flight first hand when the first black family moved in. He sold it after 20 years, after doing significant improvements (like buying the neighboring lot and putting an attached garage on.) It only appreciated 30k in 20 years. (Bought for 10k as a shell – HUD repo, 5k in plumbing and electrical in order to get occupancy, 6k for the neighboring lot, 3k to build the garage.) Put in normal maintenance through the years (new roof, new siding, new windows.) Sold for $54k. That’s not a lot of profit for 20 years of ownership and maintenance.
[/quote]

That’s a 125% gain over 20 years.

How can you not make a $54k house cash flow? You can’t even buy a studio in San Diego. That’s practically living for free. You can save good money if your house it just the price of a luxury car.

I guess I’m accustomed to prices in Downtown San Diego.

[sdrealtor]

With the improvements we are at 24K and what about the roof, siding and windows which take you up to 35K easily Thats far from 125% gain over 30 years. What about 30 years of miscellaneous maintenance too?

Taxes are high, maintenance costs are much higher and there are vacancies with hooker/druggie squatters to deal with. Sometimes neighborhood kids think it would be fun to burn down the immigrant owners house. Those are a few reasons that come to mind.

[sdrealtor]

With the improvements we are at 24K and what about the roof, siding and windows which take you up to 35K easily Thats far from 125% gain over 30 years. What about 30 years of miscellaneous maintenance too?

Taxes are high, maintenance costs are much higher and there are vacancies with hooker/druggie squatters to deal with. Sometimes neighborhood kids think it would be fun to burn down the immigrant owners house. Those are a few reasons that come to mind.

[sdrealtor]

With the improvements we are at 24K and what about the roof, siding and windows which take you up to 35K easily Thats far from 125% gain over 30 years. What about 30 years of miscellaneous maintenance too?

Taxes are high, maintenance costs are much higher and there are vacancies with hooker/druggie squatters to deal with. Sometimes neighborhood kids think it would be fun to burn down the immigrant owners house. Those are a few reasons that come to mind.

[sdrealtor]

With the improvements we are at 24K and what about the roof, siding and windows which take you up to 35K easily Thats far from 125% gain over 30 years. What about 30 years of miscellaneous maintenance too?

Taxes are high, maintenance costs are much higher and there are vacancies with hooker/druggie squatters to deal with. Sometimes neighborhood kids think it would be fun to burn down the immigrant owners house. Those are a few reasons that come to mind.

[Author]

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