Beginner REI from Philadelphia area

17 Replies

Hi everyone! I'm a 37 year old father of two and I've just started the first step on my real estate investing journey... getting educating. Bigger pockets has been clutch, and I'm so grateful for this resource. My wife and I feel we are about a year away from getting our first rental property (after we finish paying off these student loans). The first goal is to get properties that can turn into college funds for my boys (1 yo and 3 yo). I'm particularly interested in the BRRRR strategy. I would love to bounce stuff off people who have experience with rentals and/or BRRRRing. Thanks everyone!

We’re in similar positions though I hope to be about 6 months away. Also want to clean up some debt. (For me, it’s credit cards.)

Do you know whether you want to purchase in the city or suburbs?

@Jason Polykoff Welcome to BP! Feel free to reach out Jason if you have questions. I have SFH rentals in Central PA but haven't done the BRRR method.

I've enjoyed being a landlord as a buy and hold investor but everyone is different. I'd research all the ways you can invest in REI and see what both piques your interest and aligns with your strengths. Best of luck, you've found a good community here - ask away and you'll get some great answers.

@Daniel Taylor Looks like we are in the same boat! Are you thinking flips? Buy and holds? I’m not sure what area yet. I know Delco well, but a lot of opportunities in the city. Still figuring it out. What about you?

I got started in 2017, first property was a 3 bed 2 1/2 bathroom townhouse. Buy and hold. I had loosely talked about REI before that period but got into it more after talking with a friend that had been doing it. I had to put 20% down since it was an investment property. Been rented solid since that time.

Advice for a new investor? Stay passionate about it. Learn to analyze deals real well. Go to a meetup, find like-minded investors and talk. Don't try and boil the ocean. Find a strategy that works for you and keep finding ways to improve on that strategy. Have a plan and have a backup plan. 

Sorry that's a lot of advice. :)

Originally posted by @Jason Polykoff :

@Daniel Taylor Looks like we are in the same boat! Are you thinking flips? Buy and holds? I’m not sure what area yet. I know Delco well, but a lot of opportunities in the city. Still figuring it out. What about you?

I guess that, ideally, I'd like to take on a BRRRR strategy with infinite returns. I think I may be more likely to pick up something distressed very cheaply and flip it w/ cheap labor/DIY work. Coming out w/ a little extra cash-on-hand would make the next couple of moves much easier as I'm not showing up w/ super deep pockets.

If I can't make the early flip(s), I think I'll need to partner w/ someone to make a BRRRR (or partial BRRRR) happen.

Hi Jason. I'm impressed by how prepared you are for your children! I wish you the best! I'm a real estate consultant from Philadelphia. I move a lot of inventories each month in Philly and Delaware County. Buy and Hold is definitely a good strategy for the market in Philly. A good thing about Philadelphia is that you can find a variety of options, from a very expensive property to a very cheap one. So, I'm confident you can find a good investment in any neighborhood for rentals. But from my personal insight, the rental market is strong in North Philly where the price is cheap and there is a lot of room for your house to appreciate. West Philly is very hot as well. More and more young professionals are moving from center city and University City to West Philly to live. South Philly could be a good option as well but the price is getting more and more pricey. Let me know if you have any questions. See the picture below some stats relating to rent in Philly areas. I'm very happy to share what I know

@Jason Polykoff - my biggest advice as a Real Estate Agent as well as Investor is being confident and knowing your numbers inside and out. 

I see that you are in Drexel Hill and as you can probably relate, property taxes can be high in Delaware County. I always like to run super conservative numbers when it comes to Market Valuation (Before and After Rehab) and really get a good grip of any and all financial hurdles. Reverse Engineering every deal is key. 

Originally posted by @Victoria Pham :

Hi Jason. I'm impressed by how prepared you are for your children! I wish you the best! I'm a real estate consultant from Philadelphia. I move a lot of inventories each month in Philly and Delaware County. Buy and Hold is definitely a good strategy for the market in Philly. A good thing about Philadelphia is that you can find a variety of options, from a very expensive property to a very cheap one. So, I'm confident you can find a good investment in any neighborhood for rentals. But from my personal insight, the rental market is strong in North Philly where the price is cheap and there is a lot of room for your house to appreciate. West Philly is very hot as well. More and more young professionals are moving from center city and University City to West Philly to live. South Philly could be a good option as well but the price is getting more and more pricey. Let me know if you have any questions. See the picture below some stats relating to rent in Philly areas. I'm very happy to share what I know

 Victoria, thanks so much for the post and the kind words. That map is super helpful. Do you happen to have a similar map for the surrounding counties (delaware, montgomery, chester)?

Until we can build up our portfolio, we will probably need to start with less expensive properties. I know West Philly pretty well, perhaps I should look closer in that area. 

Thanks Victoria!

Originally posted by @Justin Schreibeis :

I got started in 2017, first property was a 3 bed 2 1/2 bathroom townhouse. Buy and hold. I had loosely talked about REI before that period but got into it more after talking with a friend that had been doing it. I had to put 20% down since it was an investment property. Been rented solid since that time.

Advice for a new investor? Stay passionate about it. Learn to analyze deals real well. Go to a meetup, find like-minded investors and talk. Don't try and boil the ocean. Find a strategy that works for you and keep finding ways to improve on that strategy. Have a plan and have a backup plan. 

Sorry that's a lot of advice. :)

Justin, this is great! Thanks for the advice. I'm going to try and find a local meetup and meet some more investors for sure. Did you have to rehab your first property? What does your portfolio look like today?

Thanks again for reaching out!

 

Originally posted by @Zachary Paul :

@Jason Polykoff - my biggest advice as a Real Estate Agent as well as Investor is being confident and knowing your numbers inside and out. 

I see that you are in Drexel Hill and as you can probably relate, property taxes can be high in Delaware County. I always like to run super conservative numbers when it comes to Market Valuation (Before and After Rehab) and really get a good grip of any and all financial hurdles. Reverse Engineering every deal is key. 

Zach, you're not kidding about the property taxes! My wife and I bought our first house in Indiana, where I just paid my taxes out of pocket twice a year because they were so low. Now, we have half the house and 3x the taxes. Thanks for the advice about reverse engineering. Would you say the 50% rule still applies to Delaware County, given that the taxes are so high? Or should I consider it more of a 55-60% rule?

Thanks again!

 

For Delco I would say a 55-60% would probably be more feasible mostly due to the higher taxes. 

Also as you probably already know too, in Delco the rental rates can be across the board town from town, street to street. I haven't been able to find any sort of map or graph showing average rents for the suburbs, however, I would say the MLS, Zillow, and other sites would be a great roadmap.

@Jason Polykoff I am starting my investor journey in Philly as well! I’m interested in value add buy & hold. I don’t want to do a major remodel until I have a good team in place. I’m hoping to find a property with mostly cosmetic updates needed. I’m still trying to figure out which neighborhoods to focus on. If you find any good investor groups lmk! 

@Charlie Anne

I’m a real estate consultant from Philly. Biggerpocket is a very good place for you to connect to investors. I found ConnectedInvestor a pretty good platform as well. As of your looking for a light rehab, I move a lot of inventories (20-30) off market properties each month in Philly and Delaware County. I hope to connect with investors like yourself to learn more about how I can best help them. Looking to be in your network!

@Charlie Anne Will do Charlie! Looks like we’ll be going through this journey together. I’m wondering how many real estate rookies there are in Philly and how we can start group to help each other.

Hi @Jason Polykoff, have been successfully using the BRRRR Strategy since 1994, Biggest thing I learned was to levarge debt with private lending grow. The Philly market has great buy-in pricing. Let me know if I can be of assistance, we hold Local REIA meetings in the Greater Philadelphia area.

Regards

Joe Scorese

@Jason Polykoff Hi Jason, welcome to BP. I'm also newer to RE investing and live in Delco. It took me a little over a year to sure up my financial situation as well. But you're definietely in the right place to learn as you begin the journey. I'm interested in multifamily buy and hold, and hope to use the BRRR strategy while house hacking my first property.

To piggyback off @Justin Schreibeis great advice.  Don't lose your interest or focus if it takes longer than you'd like to get that first deal.  It's easy to get discouraged (from personal experience) but taking the extra time to ensure you're in a good position will be worth it!