hi everyone. Im new to bp and have already found a wealth of information on here. I have been interested in the reading,pa market for some time now and would like some insight on my current dilemma. I am from pottstown and spend a lot of time in the city of reading so i know the city well. Everything i have read says to stay away from some of the less desireable areas of the city but i was figuring it cant be as big a nightmare as everyone states. I have run into a property on the south side of reading off of cotton st. I have friends that live two blocks away so i know the reputation but the property is a 5br 1bath for 17k which has been newly rehabbed and the owner needs to free up some money. It would be a cash deal and this would be my first property. I figured with the price and condition of the house along with the instant equity it would put me in a start to real estate investing. Any insight would be greatly appreciated before i pull the trigger on the deal.
Hi @Marc Oister ! Congrats on taking the all-important step of looking at an actual deal. It may not seem like it, but looking at (lots of) deals is the key to becoming a better investor!
That said, here are some questions/concerns that immediately popped into my head:
- What is the market value of this property? How do you know you'll have "instant equity?"
- Just because the seller wants all cash doesn't mean you have to go that route. Why not consider a terms offer?
- Are 5/1 homes common in that area? That layout makes me wonder whether keeping tenants will be a problem. Assuming no doubling-up, I don't see five people being happy sharing one bathroom for very long.
- Is the property vacant? If so, for how long? Did this owner ever have tenants?
- Given the low asking price, it sounds like the owner may have started a rehab project and then run out of money. Be extra careful to ensure that the work done was of high quality.
The point is that there is always a story involving any seller and any property. Be sure you learn what it is before you plunk down your funds, rather than after!
Thank you @mitch messer Ive been looking at a few properties so far but this is the first one that i have been considering being that all the other ones have been either too much work, too high property tax, or priced too high. Have been looking for a while but not been able to find anything worth while. But after reconsidering i passed on this one also.
Not sure if you're still around, but thought id answer this one.... I'm here in the near-area to Reading. As a beginner real estate agent (way back when) I detested showings etc in that area for safety reasons, and 90% of people looking in that area weren't even close go qualifying for financing.- so scary time spent was time wasted. No commission. Now as an investor, I do not see quality end profit enough to make it worth pursuing. Yes, there are bountiful units in Reading, but the costs to rehab vs list/selling price aren't great. Plus, if you don't end up selling, the taxes are incredibly high. Renting is even scarier to consider.
Pottstown is a good area to rehab and you are already there . Look for the 3bd/2bath combo and that should be the sweet spot for you.