Flipping Commercial Property In Fishtown Philadelphia?

Question

Hi BP, I'm 22 years old and sometimes may be ahead of myself. I ran into TWO commercial properties that needs renovation in the very hot market of Fishtown in Philadelphia, I do not have the finances to purchase them but I am looking to outsource the funding. The buildings are next to each other and comps there are 250k-350k. But the comps are residential. If I can get a hard money loan on this would it be able to sell for more due to the commercial zoning? The buildings are 3 stories and I was wondering can another investor purchase it and use the other two stories as apartments?

David Bokman · Answer

Did you already put them under contract or are you trying to get them still? Yes that is the fishtown area, could also be kensington depending on what street its located on.

David Bokman · Answer

I live and invest in the Fishtown area and curious how you came up with those comp numbers? I just sold a few commercial properties in that area and have a few more. How big are these properties? What part of Fishtown? Feel free to reach out if you would like to discuss.

Thoai Han · Answer

Yes that is the ideal goal. After I renovate the properties and sell one, would I need to get the property rezoned if I intend on having it mixed-use? Rent the bottom floor to a commercial tenant and second floor to another tenant and I stay on the top floor. Also if the property is zoned commercial do I have the right to use it as a triplex?

Ryan Cameron · Answer

@Thoai Han- I would seldom say "flaw" in a plan. All plans could be stronger, or refined. Though I'm exactly sure what the plan would be. And the plan has to have numbers that work

I'm assuming that you plan to purchase and convert these commercial spaces into residential. Selling one (to repay hard money), and then live in the other while collecting rent from the other tenants.

Is that an accurate assumption?

Thoai Han · Answer

@Ryan Cameron Thanks for replying! If I do outsource the funding, my only option is to flip the property due to the hard money loan. My ideal plan is to obtain hard money loan to purchase and rehab both the properties, flip one of them to repay the lender and keep one to hold as I plan on house hacking and leasing to other tenants. Do you see any flaw in the plan ?

Ryan Cameron · Answer

@Thoai Han- is your plan to purchase then resell, Or purchase, and develop? I know Fishtown is a hot area for new construction (Residential).

Best of luck to you