Philly locations for buy and hold investor

3 Replies

Hello all, I have been investing in the South Jersey market but am finding the high taxes to be a real challenge in finding good cash flowing properties. My loose requirements are I would like to make a minimum of $100 per door with debt service. So in an effort to search for better local cash flowing properties I have been looking in the Philadelphia markets. I’ve been examining a lot of the neighborhoods and seem to be settling on southwest philly specifically the areas between Cobbs Creek and Overbrook. My high level perception is that the closer one gets to Overbrook the higher the appreciation and lower cash flow. The closer one is to Cobbs Creek the lower the appreciation and greater the cash flow.

A typical South Jersey deal may be a 65k purchase 20 - 30k rehab. This may or may not return cash flow as taxes could easily be 5-6000 for a SFR.

A typical Cobbs Creek deal may be a 35k purchase price with a 20-30k rehab. This would return around $250 in cashflow after debt service and all expenses.

An Overbrook deal would typically be 50k purchase price with a 20-30k rehab. This would return around $100 in cashflow after debt service and all expenses.

My questions are generally do locals with experience in these areas consider them a ‘war zone’ area? I personally believe them to be C to B- areas in relation to the city. I am trying very hard to not look through my NJ glasses while gauging these properties.

What am I missing in my general strategy?

Any thoughts are greatly appreciated.

I agree, they would be more B or C. I think war zones are more areas deep into Southwest Philly, some parts of North, or Camden.

@Greg Wake I guess sometimes there is a fine line between war zone's and excellent 'local' cash flow. Are you thinking Cobbs Creek is on the outskirts of that SW Philly war zone?

@Jon Lafferty It has been a while since I lived there, but Overbrook Park, and the areas of Overbrook near it were good areas (B+) and then it goes down from there to Cobbs Creek. But no war zones in the Overbrook area when I lived there, though some might be C neighborhoods. As @Greg Wake said, mostly North and SouthWest. Some parts of Cobbs Creek are bad enough that I would stay away from them, though not full blown war zones.

You might also look at some of the West Philly neighborhoods, in the University City area. There are some solid C+ working class areas that will cash flow nicely.

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