Philadelphia, PA · Member since 2019 · 13 posts · 2 votes
Hey everyone!
I've been trying to analyze deals, and start my REI career through house hacking. I live in Philadelphia, and I can't seem to find ANY Multifamily properties. Any advice on how I should proceed besides contacting a real estate agent? I'm sure they will be able to find deals for me, but was wondering if there is additional guidance someone can provide? I would greatly appreciate it!
Real Estate Agent · Philadelphia, PA · Member since 2018 · 428 posts · 484 votes
6y
Hey, @Eric Jiwanmall the reason why it is so tough to find a good multi deal comes down to two reasons- everyone is looking for them and many do not comp out easily for a refi. It's the double-edged sword that accompanies Bigger pockets- this platform educated so many about the benefits of BRRR and multis but it has everyone looking at the same product. As a result, many multis are overpriced due to high demand to that point where simply getting two singles instead of a duplex can be more cost-effective. Another layer is added to the problem with the zoning overlays that have occurred over the last few years that have changed many RM1 (multi) properties to RSA5 (single). However, there are NUMEROUS properties zoned for multi-family and can be utilized as such by right based on zoning and square footage/lot size, but you must be willing to bring in an architect to change the floor plans and beef up your rehab budget to convert the use from SF to MF.
The guys/gals on my acquisitions team do pick those up but they are RARE. If you want to lock up a true multi, you will need to be able to act quickly because those are the properties that pop up and sell within a few hours, regardless if it is on or off-market.
Also, why you don't want to contact an agent to find a deal for you?
Buying MF property in Philly can be more complicated than a single. I’d recommend using an agent who is familiar with investment properties and specifically with the city zoning and requirements for MF properties.
Real Estate Agent · Philadelphia, PA · Member since 2018 · 428 posts · 484 votes
6y
Hey, @Eric Jiwanmall the reason why it is so tough to find a good multi deal comes down to two reasons- everyone is looking for them and many do not comp out easily for a refi. It's the double-edged sword that accompanies Bigger pockets- this platform educated so many about the benefits of BRRR and multis but it has everyone looking at the same product. As a result, many multis are overpriced due to high demand to that point where simply getting two singles instead of a duplex can be more cost-effective. Another layer is added to the problem with the zoning overlays that have occurred over the last few years that have changed many RM1 (multi) properties to RSA5 (single). However, there are NUMEROUS properties zoned for multi-family and can be utilized as such by right based on zoning and square footage/lot size, but you must be willing to bring in an architect to change the floor plans and beef up your rehab budget to convert the use from SF to MF.
The guys/gals on my acquisitions team do pick those up but they are RARE. If you want to lock up a true multi, you will need to be able to act quickly because those are the properties that pop up and sell within a few hours, regardless if it is on or off-market.
I am looking for deals through Realtor and Zillow. I don't have an Real Estate license so I can't get on the MLS. I don't want to contact an agent just yet because I want to get my hands dirty. I want to hustle and grind by looking on these websites to gain more insight and experience.
I know I will end up needing a real estate agent soon anyway.
Thank you for your time and response Yuriy! I appreciate it.
Wow! I had no idea about any of that. It does sound very complicated, but I'm going to keep pushing through. I know I will find the right property. I aim to use an FHA loan. I'm not sure if I can House Hack by purchasing two singles instead of a duplex. That's a great strategy though
I appreciate you reaching out. I am eager to learn more so I can get the ball rolling in my investment career. I look forward to speaking with you.
Rental Property Investor · Cincinnati, OH · Member since 2019 · 60 posts · 25 votes
6y
@Eric Jiwanmall Nice to see that you're hustling and doing your own work finding deals. I'd still recommend getting in touch with an agent just to have on hand. They can set you up with automated MLS emails if a house matching your criteria comes up on top of your own research. Also, it's better to have that system in place so that when a good deal pops up, you can act immediately and see the house and put an offer in ASAP.
Rental Property Investor · Pottstown, PA · Member since 2017 · 119 posts · 38 votes
6y
Hi @Eric Jiwanmall, congrats on starting your journey! I can put you in touch with a very investor-friendly realty company if you're interested in a little help. That's how I got started. At the very least they're people are good educators and sounding boards for investors. Most of the deals are made off market right now, but I do know people who have purchased property that was listed on the MLS in the past 12 months. Let me know if you'd like their contact.
@Eric Jiwanmall if you don't mind the commute then check out Reading, Pa or Wilmington, DE. The taxes (property) in Wilmington have gone up due the revitalization project. However they are current with most north eastern taxes. Delaware has very low taxes and cost of living. Also check Glasglow, Bear, Newark, and Christiana.
Rental Property Investor · Atlanta, GA · Member since 2019 · 82 posts · 68 votes
6y
@Eric Jiwanmall if you're planning to use an fha loan anyway, you may be able to find a single family and convert it to a duplex or a duplex and convert it to a quad using the fha 203k loan product. Do your research on converting SFRs to duplexes. I've found some helpful info on YouTube.
Lender · Thornton, PA · Member since 2014 · 106 posts · 56 votes
6y
@Eric Jiwanmall, as we all know here in the Philly area, even the badlands are popping theses days, neighborhoods that no one would touch 5 years ago are now up and coming hot spots. Its great for the city but its becoming tougher for the average investor to find good deals. You might have to surrender and find a local agent, look on the real estate signs for the name of agents doing a lot transactions in your areas of interest, do your research on them to find a reputable one and maybe you can find a property that is currently considered an outlier.
I was at 9th and Spring Garden the other night for an event in a beautifully converted former warehouse with my 15 y.o. son, a few years back, it was a different neighborhood.
Word of caution... its tough being the first investor on a block that was last night the scene of a lot of police activity.
Rental Property Investor · Pottstown, PA · Member since 2017 · 119 posts · 38 votes
6y
@Eric Jiwanmall
The agents name is Sheldon Zimmerman with Slatehouse Group. Slatehouse Group is property management and a realty company for investors. They represent both buyers and sellers of investment real estate.
He’s also an investor and understands what investors want and are looking for. As a result he’s also a great person to ask questions of pertaining to investment real estate. He gets it.
@Jimmy O'Connor. Jimmy. I actually planning to purchase a property with RM-1 zoning, but was used as single family. I plan to convert it to a duplex. Do you know of a guide somewhere that shows step by step to do it legally? If not, is there any service out there that i can pay to give me guidance. I plan to do a lot of works myself, so not sure how to deal with the licenses and permits. I appreciate the responses in advance. Cheers.
Real Estate Agent · Philadelphia, PA · Member since 2018 · 428 posts · 484 votes
6y
@Van Nguyen
I know a couple zoning expediters that can help!
I know @Troy S. Has plenty of experience as a developer dealing with Zoning boards and neighborhood committees and is very active on these forums.
If you have the zoning and square footage requirements (I’ll post the link on here once’s I’m in the office) then you can do it by right- you’ll just need to sift through some bureaucracy. It can get hairy and extra lengthy if you were getting a variance for a zoning change
@Jimmy O'Connor. Thank you for the response. I am looking forward to your link. As mentioned earlier, the property has RM-1 zoning and the lot is roughly 870 sq ft, so i think it should be fine for converting to a duplex. Like you said, I might just need to get through the bureaucracy.
@Jimmy O'Connor. Thank you for the response. I am looking forward to your link. As mentioned earlier, the property has RM-1 zoning and the lot is roughly 870 sq ft, so i think it should be fine for converting to a duplex. Like you said, I might just need to get through the bureaucracy.