Investing in MultiFamily Property in Philadelphia, PA

[Francis McColgan]

Hello all,

I am brand new to the BP forums, but I have been listening to BP podcasts for about a year now. Like a lot of people I have listened to in the past year, I am currently looking to start investing by buying a multifamily property in Philadelphia, PA to offset the mortgage as I continue with my day job. I am approved for an FHA loan for $350k, and I am actively looking at houses in Northeast Philadelphia where I have always lived. I have been using the BP Rental Property calculator for a few months now in preparation, and I consistently find that my CoCROI for most houses is below 12% and sometimes even a slight -% without me even living in the property. This is accounting for basic vacancy, CapEx, taxes, etc. My realtor has stated that the houses in Philadelphia are still consistently selling within 1% of the listing price, and I only have a few months left of my current housing situation. Should I settle for a less than ideal CoCROI with the intent of having a false positive mortgage while I continue to learn and develop? Also, which neighborhoods are other investors targeting for positive cash flowing multifamily properties in Philadelphia? Appreciate any advice.

Fran

[Nicky Lisewski]

With my first house hack, I was paying about $300 out of pocket a month when I lived in it. That being said, I got it with an FHA loan, and it appreciated and now also cash flows.

I bought that triplex thinking I would be living there for a while. I actually lived there for a year only, so, in hindsight, I could have bought in an area that was less ideal for my work and life.  

If you are looking for cash flow, look at the neighborhoods the developers are going - Germantown, Kensignton, Brewerytown etc.  Good luck.