Rookie looking for right neighborhoods/partners in Philly

Philadelphia, Pennsylvania
Starting Out
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Rookie looking for right neighborhoods/partners in Philly

Jesse Harr
Allentown, NJ · Member since 2015 · 4 posts · 2 votes

Hey BP community!  I really appreciate all of the expertise and help here.

I am just starting out and am circling Philadelphia as my probable target market.  Any advice or recommendations are definitely appreciated.  Happy to do some analysis for anyone on a similar path, or help out any way I can in your deal just to start actually taking some action!  I have read, listened, saved, became a pro member and am ready to start!

Personally, I need to identify a market and need to figure out which neighborhoods match up with my plans. I will be BRRRR-ing a 2 to 3 bedroom property in a B class area. I have seen the latest BP Cash Flow analysis report showing a Philadelphia median property value of $234,000 with rent of $1795. That seems like a solid base hit for me.

      Can anyone recommend possible neighborhoods to start zooming in on?

I also intend to build my business around the Core 4 model outlined in David Greene's book and many posts. I would love to meet with any REI agents or property managers and welcome any advice there as well!

Congrats to all of you making it happen, thanks for the time, Cheers!

2Reply
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Most Popular Reply

Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
3y

@Jesse Harr

In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.

It's often a case of not doing enough research, as they don't know what they don't know!

Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator.

So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.

EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!

This also leads owners to ASSUME simpler is better when it comes to management contracts.

The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!

We have a 14-page management contract that we've added our real experiences to over the years, with the intent of protecting both us AND the landlord. Beyond the Monthly Management, Placement & Maintenance fees, all other fees in our contract are IF EVENT -> THEN fees.

We don’t know any PMCs to recommend in the area mentioned, but since selecting the wrong PMC is usually more harmful than selecting a bad tenant, you might want to read our series about “How to Screen a PMC Better than a Tenant”:

https://www.biggerpockets.com/member-blogs/3094/91877-how-to-screen-a-pmc-better-than-a-tenant-part-1-services-and-processes

We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊

[email protected]248-209-6824
Logical Property Management4.9459 Reviews
WebsiteView Page
2Reply
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10 Replies

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  • Eric Greenberg
    Investor · Philadelphia, PA · Member since 2019 · 618 posts · 430 votes
    3y

    Hi Jesse,

    Id start by determining how much money you will have for the property and rehab since we are talking about a BRRR. Then you can determine what areas you can afford and see if they pencil out on Zillow/etc for rental comps.

    After you find those areas in Philly that meet your financial goals go to each of them and spend some time driving/walking around.  I think way too many folks buy in Philadelphia without ever stepping foot here which can work in certain spots but most areas change drastically in only a block or two.

    Do you already know how you plan to acquire the property? Cash/Hard money/mortgage?

    Happy to talk in more detail via DM. 

    0Reply
  • Jesse Harr
    OP
    Allentown, NJ · Member since 2015 · 4 posts · 2 votes
    3y

    Hi Eric,

    Thanks for reaching out.  Yes, I have some family in Breezepoint (I think that is the area) and they seem to be on the cutting edge of gentrification so I see a block or two making a huge difference.  I am living about an hour away now and will be spending time in town once I have some areas identified.

    I am currently working my way through the BP Rookie Bootcamp, so as my target comes more into focus, I would appreciate the chance to reach out directly.  Maybe in a week or so. 

    I am currently planning on acquiring with private money, all in for 250k and looking for an area with dependable demand. 

    0Reply
  • Rich O'Neill
    Contractor · Chadds Ford, PA · Member since 2015 · 567 posts · 460 votes
    3y

    Hey @Jesse Harr

    @Eric Greenberg is totally right. 1 block can make all of the difference in the city. 

    Something I would strongly consider and often recommend is looking for deals outside the city in the neighboring counties. I personally like Delaware County. The big complaint there is always the RE taxes so make sure you factor those into your numbers. 

    I don't personally buy in the city any more because of the regulatory environment. It is too hard to evict a bad tenant in my opinion. There are several other things the city has done to make it more difficult for landlords. At the same time, plenty of people make big money in the city, so there is obviously opportunity. Just not for me. 

    Happy to discuss further if it would be helpful! 

    0Reply
  • Derek Roche
    Homeowner · Rochester, NY · Member since 2021 · 15 posts · 13 votes
    3y

    I can put you in contact with my brother. He's a construction Project Manager in Philly. He's also done Property Management for some large properties out west. Shoot me a private message and I can get you his contact info. 

    0Reply
  • Matthew Niemynski
    Wholesaler · Philadelphia, PA · Member since 2021 · 39 posts · 18 votes
    3y

    Hey Jesse! It is totally true that an area/neighborhood changes block by block, so its important that you take a look at these areas either through google street view or with your own eyes. There are some good articles you can find where developers and companies are building like crazy in Philly.. (Brewerytown), in my opinion that could be a great opportunity to get into. Quick commute to employment and transportation is very important for tenants. Try to get in where you fit in. Many of my investors love South and West Philly since its becoming so gentrified. I source a lot of off-market properties for them there.  

    I personally live in South Philly (Grays Ferry) and I have no issues. Would love to chat more! Lets connect

    0Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    3y

    Hire a geat PMC and they will know!

    [email protected]248-209-6824
    Logical Property Management4.9459 Reviews
    WebsiteView Page
    1Reply
  • Jesse Harr
    OP
    Allentown, NJ · Member since 2015 · 4 posts · 2 votes
    3y

    Hey @Rich O'Neill, Thanks for the advice! 

    I will check out Delaware County, too.  As I get started, I was mainly looking to pin down one of these variables, and build out my model from there.  My theory is to pick an area with predictable demand (like a city) so at least the monthly rent is less "squishy" and I can see what numbers work.  That demand could easily come from a transit hub or from a good school district in DelCo, though.

    It looks like you are building a great machine over there.  Congrats!

    I think @Drew Sygit's advice is probably right for my next step.  (Thanks Drew)   Do you self manage, Rich?  Or do you know of a Property Management company that would be a good match for a first timer looking to go from 1 to 15 over the next 5 years?

    0Reply
  • Rich O'Neill
    Contractor · Chadds Ford, PA · Member since 2015 · 567 posts · 460 votes
    3y

    @Jesse Harr Thank you! 

    I don't manage anymore. I wish I had outsourced it sooner. I am glad I self managed for a little while though as it helped me understand how to manage the manager, since I know what the job takes. 

    I use Rentwell for my properties in DelCo. I have clients that had good experiences with Otter Property Management (@Kevin Moyer) and depending on the area TrustArt (@Yuriy Skripnichenko

    0Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    3y

    @Jesse Harr

    In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.

    It's often a case of not doing enough research, as they don't know what they don't know!

    Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator.

    So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.

    EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!

    This also leads owners to ASSUME simpler is better when it comes to management contracts.

    The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!

    We have a 14-page management contract that we've added our real experiences to over the years, with the intent of protecting both us AND the landlord. Beyond the Monthly Management, Placement & Maintenance fees, all other fees in our contract are IF EVENT -> THEN fees.

    We don’t know any PMCs to recommend in the area mentioned, but since selecting the wrong PMC is usually more harmful than selecting a bad tenant, you might want to read our series about “How to Screen a PMC Better than a Tenant”:

    https://www.biggerpockets.com/member-blogs/3094/91877-how-to-screen-a-pmc-better-than-a-tenant-part-1-services-and-processes

    We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

    EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

    P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊

    [email protected]248-209-6824
    Logical Property Management4.9459 Reviews
    WebsiteView Page
    2Reply
  • Yuriy Skripnichenko
    Property Manager · Phialdelphia, PA · Member since 2017 · 511 posts · 627 votes
    3y

    @Jesse Harr

    We manage properties in Philadelphia proper. Do not go out of the city limits. Feel free to reach out. 

    @Rich O'Neill thank you for the tag. 

    Cheers, 

    Yuriy 

    1Reply
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