Am I on the right track?

Question

Hey everyone!

I'm back after lurking around the forums and listening to the podcasts.

I saved up some money (around $70k) and finally deciding to buy my first rental property. I'm looking into single family homes and small multi-family homes (duplex or triplex). I have a real estate agent (same one I used to buy my own home) and she gave me a couple properties. Single family homes are ranging 230-250k and duplex are ranging 250-450k. I am looking around Temple University right now - plan to rent out to college/graduate students.

Besides my agent, should I also look for a local property management company and local contractors right now? If so, does anyone have any recommendations?

Thanks for reading this! It's good to be back!

-David Chen

Joseph Cacciapaglia · Answer

It's very unlikely that the agent that sold you your home is going to be the best agent to help you with an investment property. I know there are some great niche shops in Philadelphia, or at least there were when I worked there several years ago. I'd recommend finding one that sells a lot of investment properties in town. They should have MGMT, lender, and contractor contacts to share.

Drew Sygit · Answer

@David Chen we agree with @Joseph Cacciapaglia that an agent that sells houses retial is unlikely to understand and be able to find an investment property.

Find a good PMC and they can either find you a property or connect you with an agent better suited for an investor.

Rich O'Neill · Answer

@David Chen check out @Kevin M. from Otter Property Management and @Yuriy Skripnichenko of TrustArt for Property Managers. I have had clients that worked with both and had good reviews. I always recommend interviewing a few because they all have different pro's and con's.

For investor agents, @Jimmy O'Connor is not an agent in the traditional sense but moves a lot of property in Philly. @Robert Lawrence and @John Knisely are 2 good investor focused agents.

In short, yes build the team now and be ready to jump.

Nathan Gesner · Answer

A lot of people will tell you to save the 10% and manage yourself, but that's because they don't understand the value a good Property Manager provides. You can do it, but make an educated decision.

A good PM knows the market and can keep rents at market rates. They can reduce vacancy by marketing properly. They can reduce turnover by keeping tenants happy with quality services, clear communication, and responsive maintenance. If a problem pops up, they have policies and procedures in place to nip it in the bud quickly. They know the law and can keep you out of trouble.

A good PM can increase earnings enough to cover their cost. Self management may be a good choice for you, but educate yourself on the value of a PM and then make an educated decision.

Kevin M. · Answer

@David Chen welcome to Philly RE investing. I'm a property manager and I got my start around Temple with a triplex in 2017. It's been wild since then. DM me if you want to talk more about the Temple area specifically and why I find it to be one of the most difficult areas to rent in the city right now..

Rob Lawrence · Answer

Thanks @Rich O'Neill!  Happy to help if you want an investment focused agent

Matt N. · Answer

@David Chen

I agree with @Joseph Cacciapaglia and @Drew Sygit 100%

Check out my BIO. I have all the connections, from wholesalers to lenders, to PMC. When you're ready to work with an investment agent I am here for you. Happy to share/help.

Best of luck!

Matt

Ash Hegde · Answer

I do think it's a good idea to look into those to build your team even if you don't immediately need them. Not sure if you have asked your agent already, but if they deal with investment properties they may have those type of contacts.

Nate Sanow · Answer

Welcome to the party that is investing! Best wishes to your success

Eric Greenberg · Answer

Hi David,

I agree with the folks above. From my experience, a personal home RE agent isnt always a great fit for an investment property unless they really understand both aspects/invest themselves/know that area well.

Do you know Temple and its rental market well? The folks I know in that space have said there has been a lot of new units going online and its been tougher the last couple years to rent unless the units are newly updated (en-suites/etc).

Happy to talk more in depth via DM and also pass along a real estate agent who invests and has helped a number of folks buy/sell investment properties on Temple’s campus in the last couple years through the pandemic.

Am I on the right track?

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