Allentown. Looking for my first multi-family purchase.

11 Replies

I am looking to invest in Allentown Pennsylvania. There are many affordable multi family units but I am very concerned about the condition of the city. I would just like to start a conversation about investing in Allentown and if anybody has any good advice. I see that they are trying to make a lot of improvements in the town and I have read a decent amount on the city planning. Have you invested in Allentown? Do you have any sound advice for me?

People always need somewhere to live.  I've read ton of investor success stories in areas where you wouldn't expect. I can't say from personal experience in that area, but I have a multi -family home in Jersey City, NJ in the not so great area and no matter what, the rent average continues to increase. Keep doing your research and do your best to minimize your risk, but I wouldn't completely shut the area out. 

I work with plenty of investors that are getting good rates of return, and currently live in Allentown myself. Just like any major city, there are good and bad areas. The key here is avoiding alleyway properties and locations that attract low quality tenants. In Allentown, I like the West End and south side.

Investor money continues to pour into the area and drive appreciation. I use two unit properties in Allentown to evaluate this change. Two unit properties sold for an average of $87k in 2016, $95k in 2017, $124k in 2018, and $130k in 2019. That is a 50% appreciation within that market sub-class in three years!

My advice for anyone getting started - the people you work with will make or break your success, more than any numbers you analyze. Do your due diligence in screening your team as you build them. You could be in the best market, but if you have a bad agent, contractor, inspector, or lender, any of them could keep you from being successful. Flip that around - with the right people, you can make profits in even the toughest of markets. There are always deals to be had for those that work for them.

Originally posted by @Matt M. :

@Leora Devitt

I live 20 mins from Allentown. Wouldn’t invest $10 there. 26 people shot since June. Just my 2 cents..

Most of the violence in Allentown is within select groups of people. I have encountered no issues investing in Allentown and have been extremely bullish. I’ve dealt with about 50+ tenants with absolutely no issues. Never been scared to be in Allentown at night either.

If you guys are scared of Allentown, take a drive through Paterson or Newark lol.

 OP, unless you are going to class A/B neighborhoods, crime stats will always exist. Your not gonna be living there, so it doesn’t matter. Just analyze your deals correctly and you’ll be fine. 

Originally posted by @David Ribardo :

I work with plenty of investors that are getting good rates of return, and currently live in Allentown myself. Just like any major city, there are good and bad areas. The key here is avoiding alleyway properties and locations that attract low quality tenants. In Allentown, I like the West End and south side. 

Exactly. I get a great return in Allentown with very minimal headache and I even self manage. I own rentals in class A/B neighborhoods NY that are much more of a headache than my Allentown portfolio. 

But hey if anyone thinks it’s a bad neighborhood and doesn’t want to invest, that’s ok. More for me. As you now, my buying spree will continue. I’ve had 0 vacant apartments in the past 12 months except when purchased vacant. Filling my units has been a joke. Literally can fill them as quick as I can clean/paint them.

@Syed H. - Totally underestimated the hassle that comes with rental listings. We posted one for rent, and it ended up getting over 100 inquiries in the first 24 hours. The demand is there, and the neighborhood is changing for the better.

@Leora Devitt   Myself and my partner are familiarizing ourselves with the Allentown market right now as well. We're building our team and we've interviewed a bunch of PM's, brokers, and lenders so far. Would be happy to connect to share notes if you'd like.