Anyone have experience in the Philly Markets ?

12 Replies

I am a first time investor and doing a bunch of research . As I’m sure you guys know how overwhelming the abundance of new information can be ! I’m looking for a decent rental or fix and flip property for around 50k. I live in NYC and was thinking that I should start with my first property within driving proximity to home . Does anyone have experience in the Philly Market ? Please let me know what you guys think about renting or flipping in Philly !

Hi @Dmitriy Andreyev , Philly is a great market for rentals and flips. The prices have increased over the years and it has become very competitive but there are still deals to be found. Philly is also block to block so I would become familiar with the individual neighborhoods before making an investment. There are quite a few places where the numbers will work but it will be a highly labor intensive rental if it's in a rougher area. Good Luck!

@Dmitriy Andreyev

Both renting and flipping in Philly can we highly lucrative. As well as very risky.

As @Chris Martino mentioned Philly is city of neighborhoods and it goes block by block. You need to know the area where you are investing.

It depends on your definition of decent rental but I doubt you can get it for $50k unless if your planning on full rehab.

Feel free to reach out if you have any specific questions.

Did you look at any specific area/neighborhood? 

@Yuriy Skripnichenko Thank you for the reply . Yes with a 50k property I would expect to put between 15-20k into the rehab. A few neighborhoods that interested me were : Grays Ferry , BreweryTown, Point Breeze . Are most low priced properties in the 50k range required to be an all cash purchase ? I was also very interested in the Sheriff Auctions but it seems like you have to really know the neighborhoods to purchase at these events .

@Dmitriy Andreyev , with a 50k budget it will be tough to invest in the areas you had mentioned above. Point Breeze and Brewerytown are both very popular and the price points will be much higher in those areas, even for shell properties. 

Grays Ferry is seeing some spillover from Point Breeze and would be a good neighborhood to look into. Some other areas I would suggest looking further into would be Kensington, Germantown, and possibly parts of West Philly. All three of these areas have some rougher areas so I would suggest getting a block by block understanding of them before jumping in. If you reach out to some local agents who specialize in each neighborhood they should be able to give you some additional insight into each one. 

@Dmitriy Andreyev You are thinking on the right track! Point Breeze, Brewerytown and Greys Ferry were recently said to be some of the best areas to flip in the city and possibly the country. The competition is getting tougher in those areas because it's growing in popularity which cuts into the previous profitability of those areas. I agree with Chris, It will be very hard to get a property in an area like Point Breeze at that price point. With the amount of development going on in 19146 and price points over 400k for finished new construction single family homes, developers usually snap up anything under 100k in any condition quick because that's about what vacant land is going for. The resale value of new construction in these areas over inflates the minimum cost of entry point because a distressed house in that area is now worth what the land is worth because they'll knock down and build new. The land value is over inflated because of the resale value of the new construction that you could build on it.  The resale value of new construction homes in inflated because of the 10 year tax abatement allowing end buyers to qualify for higher priced properties. All of this leads to these hot areas costing more to get into and being less desirable to flip in. I think it's hard to compete trying to sell a rehabbed 2 story 50- 100 year old property when someone next door is trying to sell a brand new 3 story with a roof deck for a relatively similar same price. I think if you want to compete in the hot neighborhoods the way to go is new construction. The numbers just work out better in my opinion. That being said, Greys ferry is still catching up to Point Breeze and there are still some good flip opportunities. Feel free to reach out with any questions. I'm familiar with values in the area. I live in and I'm currently developing in Point Breeze.

@Garrett Sowle My business partner and I are going to drive to Philadelphia today and get a better understanding of the neighborhoods . Do you have time to meet up and show us any low priced properties ? If not can you refer me to any agents or offices that specialize in foreclosure properties?
Originally posted by @Yuriy Skripnichenko :

@Dmitriy Andreyev

Both renting and flipping in Philly can we highly lucrative. As well as very risky.

As @Chris Martino mentioned Philly is city of neighborhoods and it goes block by block. You need to know the area where you are investing.

It depends on your definition of decent rental but I doubt you can get it for $50k unless if your planning on full rehab.

Feel free to reach out if you have any specific questions.

Did you look at any specific area/neighborhood? 

Hey Dmitriy, I agree with Yuriy- Philly is very block by block. It's important that you look at ARV numbers within the same neighborhoods as close as you can to the property in question. I personally only pull comps within the last few months and within .25 miles of the property I'm analyzing. As a licensed agent, I can help you analyze and find deals with great returns.

As for the financial situation, 50k will be a tough purchase price to work with unless you're interested in early emerging markets. With that price range, I would recommend Hard Money to cover purchase/rehab expenses. If you are interested, I can also help you fund deals with other people's money at a very competitive interest rate. Send me a message if you would like to talk more about investing in Philly!