Hard money lender in Philadelphia, PA.

I am a hard money lender in Philadelphia, and the building that defines this city for an investor is the brick rowhome. Two stories, a shared wall on each side, a basement, and a block of identical neighbors that makes the comparable sales easier to read than almost anywhere else. That sameness is why a Philadelphia rehab can be planned so tightly, and why so many investors start here.

The rowhome is also deceptive. Behind the same facade one house has a new roof and sound joists while the one next door has a rear wall pulling away and a basement full of water. The block tells you the after-repair value. Only the walk-through tells you the budget.

I am a private money lender, so you deal with the person who reads the file and signs the term sheet. This page covers the neighborhoods where investors are active, the deals that change hands here, the licensing steps that sit between a finished rehab and a paying tenant, and how fix and flip loans in Philadelphia, DSCR loans in Philadelphia and new construction loans in Philadelphia work on real addresses.

The core trade is the two-story brick rowhome bought as-is and taken down to the studs or close to it. The scope on these tends to repeat: a roof, a rear wall or parapet repair, new electric and plumbing, a heating system, windows, a kitchen and one or two baths. Because the houses are small, the budget stays modest, but the structure has to be checked first. A sagging joist or a bowed party wall turns a cosmetic job into a structural one.

Rowhome rentals trade alongside the flips. An investor buys the same house, does a durable rather than decorative rehab, leases it, and refinances. The finishes are chosen to survive tenants, and the plan has to include the licensing and lead steps covered below, because a Philadelphia rental cannot legally collect rent until those are in place.

Small multifamily shows up as converted rowhomes and corner buildings split into two or three units, plus older apartment buildings in some neighborhoods. Conversions are worth a hard look at the paperwork. I want to know the legal unit count before I count the rent.

Infill construction is the third trade. Vacant lots and teardowns in neighborhoods like Kensington get new rowhomes, sometimes a single house and sometimes a short row. The questions are the zoning, the permit path, the soil and the party walls of the buildings on either side.

In Philadelphia a landlord needs a rental license from the city before renting a unit, and without one the landlord generally cannot collect rent or rely on the courts to enforce the lease. The license comes from the Department of Licenses and Inspections, and the city also expects the owner to be in good standing on taxes and code violations. At the start of each tenancy the tenant is given a certificate of rental suitability.

On top of that, rentals built before 1978 carry a lead-safe or lead-free certification requirement, and the clearest trigger is a household that includes a young child. A certified inspector has to test the property, and lead paint disturbed during a rehab can turn a pass into a fail. The city links lead compliance to the rental license, so the two move together.

For a BRRRR or a DSCR plan this is a timeline issue before it is a cost issue. The rehab is not finished when the last fixture goes in. It is finished when the license is issued, the lead certification is in hand where it applies, and the tenant can be placed legally. I want those steps in the schedule, with real lead time, because the carry runs until the rent starts.

It also affects the refinance. A DSCR loan qualifies on rent, and rent that cannot be legally collected is not rent I can size a loan against. Check the requirements for the specific property with the city or a local attorney, since the rules change from time to time and the details depend on the building and the household.

Fix and flip loans in Philadelphia put the purchase and the rehab into one facility, with the rehab released in draws against finished work. On a rowhome the first draw usually follows demolition, the roof and the rough systems, and the cosmetic work comes later. Loans start at $25K, which matters here, because a full rowhome renovation can sit at the small end of what most lenders will touch.

I set the after-repair value from renovated sales on the same block or the next one, matched for bedrooms, baths and whether the basement is finished. Philadelphia values can change sharply across a single avenue. You get a written term sheet in 24 to 48 hours and the loan closes in 5 to 10 days subject to title. Pricing is set per deal and stated in the term sheet.

How fix and flip loans work

DSCR loans in Philadelphia qualify on the property's rent instead of your personal income, so the file has no tax returns or W2s. What I want instead is a signed lease, proof the unit is licensed for rent, and, on pre-1978 houses, the lead certification where it applies. Those documents are what make the rent real for the loan and for the appraiser.

These close in 14 to 21 days. They fit stabilized rowhome rentals, small converted multifamily with a legal unit count, and the refinance out of a bridge loan once the rehab is done and a tenant is in place. Pricing is set per deal and stated in the term sheet. If the license is still pending, I would rather wait a few weeks than size a loan on rent that is not yet collectable.

How DSCR loans work

New construction loans in Philadelphia cover the land and the vertical work in one facility, from $150K to $1M+. Most of the building here is infill rowhomes on vacant or cleared lots, either one house or a few in a row, sometimes with a roof deck and a finished basement to match what is selling nearby.

I review the contractor bids before closing. I want a line-item budget, a schedule, the zoning and permit status, and a plan for protecting the neighboring party walls, because a shared wall that moves during excavation is a cost and a dispute at once. Draws follow inspected progress. These close in 10 to 14 days once the file is complete.

How construction loans work

The bridge loan is the front half of a Philadelphia BRRRR. You buy a tired rowhome, fund the purchase and the rehab with me, get it licensed and leased, and then refinance into a DSCR loan with the same lender. Because I already know the house and the budget, the refinance does not start from zero.

The licensing and lead steps belong in the bridge term, not after it. If the rehab finishes in month four but the license and lead certification take another several weeks, the bridge has to cover that gap. I would rather build a realistic term at the start than extend one at the end. Pricing is set per deal and stated in the term sheet.

How the BRRRR bridge works

The six months is not all construction. Roughly four go to the rehab and the rest to the rental license, the lead inspection and finding a tenant. A plan that assumes rent in month four is a plan that runs out of runway.

On a house this old, lead-safe work practices during the rehab are cheaper than failing the certification and redoing finished rooms. I would rather see that line in the budget than discover it at the inspection.

If the house sells instead of renting, the same figures work as a flip, and the licensing steps drop away. The decision can wait until the rehab is close to done, as long as the term covers either path.