Fishtown engineer returns to his roots

Drexel-educated professional engineer Lawrence McKnight was working on Citizens Bank Park in 2003 as a member of the Pennoni Associates staff when he ventured to a home construction site nearby.

That was Westrum Development Co.'s Reserve at Packer Park, which was then in the third phase and asking for and getting in the upper $300,000s to low $400,000s.

Intrigued, McKnight joined Westrum, and spent the next eight or nine years with the company, "gaining a lot of knowledge about residential building," he said.

About five years ago, as BMK Homes, McKnight started buying and flipping one or two houses a year in Fishtown, where he had grown up, the son of a Philadelphia police officer and the principal of St. Laurentius School.

"I saw a need for market-rate housing in Fishtown before it went crazy," he said. "That's when you could buy a shell for $100,000. Now you can't."

He and former partner Theodore "T.J." Bonewicz started building from the ground up - one house the first year, then two, four and eight before "I made the decision that I needed to do this full time," McKnight said.

In 2014, BMK Homes built and conveyed 30 houses and is on target to do 60 in 2015, he said.

With eight full-time employees, BMX does more than just build homes.

For example, it acquires land, goes through the approval process and then flips the approved project to another builder.

Although he started in Fishtown, building on streets "Dad would have yelled at me if I'd gone there as a kid," the skyrocketing prices of houses and land in that neighborhood made it difficult to keep within his $300,000 to $350,000 range for first-time buyers.

As many builders learned, today's buyers - and renters, too - are more than willing to move to Kensington and Port Richmond to find the house or apartment they want and can afford.

"With parking, which, with the rising cost of land, has added $20,000, on average, to the price of houses, now a range of $340,000 to $375,000, and $420,000 to $500,000 on the higher end" is typical, he said.

Parking, or lack of it, has become a major issue in the emerging neighborhoods, McKnight said, even though people are moving to urban areas with public transit so that they don't have to be so dependent on the automobile.

Looking for land in these emerging neighborhoods requires an affinity for detective work that McKnight got from his policeman father.

"The larger land parcels are usually estates that have been held a long time, since the city tax structure allows them to pay just $1,000 a year to keep it," he said.

There are also warehouses and other commercial structures that are no longer in use that come on the market because demand is growing, McKnight said.

For apartments, Port Richmond offers more opportunities and lower rents than Fishtown and Northern Liberties, McKnight said, "because we are able to buy vacant land to build and buildings to rehab for them."

McKnight said that he and current business partner Mohamed Rushdy added rentals to their portfolio, "realizing that when the for-sale market slows, as it likely will in the next two or three years, we'll be diversified."

"We formed the company at the start of the downturn and we were able to survive," he said. "The lessons learned are not to become too big or acquire more inventory than you can handle."

McKnight is shifting some of his focus to building houses "to take care of the people who take care of us - police, firefighters, and teachers."

He has just bought 40-plus properties from the city to build "workforce housing" in Francisville and at Seventh and North Marshall Streets near Girard Avenue.

"There will be no subsidies or grants," he said. "The homes - four bedrooms and 21/2 baths - will range from $180,000 to $250,000" and buyers must meet targeted income guidelines.

"It gives me the opportunity to give something back," McKnight said.

215-854-2472@alheavens