Wilmington, DE, the Cash Flow seems great, am I missing something

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Wilmington, DE, the Cash Flow seems great, am I missing something

Jerry Peng
Investor · New York, NY · Member since 2020 · 8 posts · 18 votes

I've been saving up some money since leaving college and now have enough capital to deploy in buying a SFH/Duplex property. I'm interested in Wilmington after analyzing rent to cost ratios. I've realized that most top 100 US metros are being oversaturated with investors and DE in general seems to have really low property tax and good rental rates.

I'm looking for some help in hearing people's opinions on the following 3 things:

1. How landlord friendly is Wilmington? By this I mean what is the cost range and ease of an typical eviction, how easy is it to get a permit for renovations/rehab, what is the number of weeks before you need to return a security, etc.

2. What are the types of costs that are unique to Wilmington? For example, I've heard with the downtown older homes, there's good amount of CapEx that needs to be sunk in a lot of the time with maintenance and repairs.

3. What are people's opinions on the growth prospects in Wilmington and what neighborhoods are considered A,B,C or D class? I've read in previous blog posts 3 years ago about a new Chief of Police coming in and BPG building up the downtown. How did that turn out?

Much thanks to anyone who can give me any information on any of the three above questions.

Just some background info, I'm not a speculative buyer and will likely be looking to find a home with minor cosmetic upgrades needed before it's make ready. Forced appreciation and steady cash flow is the name of my game.

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  • Account Closed
    Rental Property Investor · New Castle, DE · Member since 2017 · 95 posts · 102 votes
    5y

    For point 2 yes the homes are much older. You'd be hard pressed finding a rental built after 1910. But all of that can be eliviatred on the original rehab. Just make sure you take care of all outdated items and you won't have a problem. 

    Point 3 umm it litterally changes by the block so that's tough to say. Some great areas are Trolley, Triangle. and Cool Springs. For "Okay" I would say Little Italy, Baynard Village, Brandywine Village are fine. Everywhere else you're gonna find it hard to justify the purchase if you're banking on appreciation and not pure cash flow. I mean granted this market is nuts right now and typically some areas that wouldn't sell for much are flying off the shelf but in general I'd lean towards those areas. 

    "Downtown" has two main distinctions Market St and The Riverfront. Those areas are pretty much all changed and the Riverfront is building new things by the day. 

    Would love for someone else to chime in with their experience as well. 

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  • Jerry Peng
    OP
    Investor · New York, NY · Member since 2020 · 8 posts · 18 votes
    5y
    Originally posted by @Account Closed:

    For point 2 yes the homes are much older. You'd be hard pressed finding a rental built after 1910. But all of that can be eliviatred on the original rehab. Just make sure you take care of all outdated items and you won't have a problem. 

    Point 3 umm it litterally changes by the block so that's tough to say. Some great areas are Trolley, Triangle. and Cool Springs. For "Okay" I would say Little Italy, Baynard Village, Brandywine Village are fine. Everywhere else you're gonna find it hard to justify the purchase if you're banking on appreciation and not pure cash flow. I mean granted this market is nuts right now and typically some areas that wouldn't sell for much are flying off the shelf but in general I'd lean towards those areas. 

    "Downtown" has two main distinctions Market St and The Riverfront. Those areas are pretty much all changed and the Riverfront is building new things by the day. 

    Would love for someone else to chime in with their experience as well. 

     Tyron,

    Thank you for the detail you were able to provide me on my questions. In regards to the market being nuts right now, I think that's the case across the nation, I've been talking to friend with properties in OKC, Dallas, Memphis, Birmingham, and Tulsa and it's hot seller markets right now. Low interest rates and people not wanting to sell and move during a pandemic is causing a lot of demand and not a low of inventory. 

    Are you trying to ride out the wave or still able to find deals that are worthwhile? For example, I'm seeing properties in your "Okay" neighborhoods costing around $90,000 + $20K (estimated rehab) and renting for $1000. 

    With the lower property taxes in DE than anywhere else, these units still cashflow decently. One thing I have heard is that you need a property manager who actually lives in Wilmington. If this is the case is Property Management a lot more than the usual 8-10%?

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