Multi-family Investing in Pennsylvania

16 Replies

Hello BP team!

I'm looking into purchasing a multi-family property in the Pennsylvania area and could use some guidance into what areas would be viable. Currently live in NJ and familiar with multi-families a little bit as I'm house hacking my current two family. I'm mostly familiar with the Poconos area near the resorts but I know it's more SRT over there and haven't found too many multi-families.

Would love to get some direction and/or network with someone doing this now.

Thanks!!

@Angelito Mamutuk there are some good opportunities in Scranton/Wilkes Barre, also in Lehigh valley. Poconos, like you mentioned will have more STR and SFR long term options

Lehigh Valley, Philadelphia and some others are great markets.  I live in NJ as well near Newark and its only a 45-50 min drive out there.  If you haven't been, take a day trip and see what's going on.  

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@Angelito Mamutuk

The Lehigh Valley doesn’t need any more investors. There’s not enough properties available for us here.

Just kidding, but not really :)

I agree with @Ryan Chatman. There are plenty of Multi's up in the scranton/wilkesbarre area. They are just not known for appreciation. There are not as many multi's in the Poconos, but there is a definite need up there for more SFH rentals that are not airbnb/STR types. There are of course a lot of multi's in the Lehigh Valley, just not as many for sale at reasonable pricing on market. All depends on your buying criteria tho.

Harrisburg and surrounding areas could serve you well.  Generally speaking it's a relatively lower cost to compared to some other areas (i.e. Lehigh Valley), but still has a good mix of some cash flow/appreciation depending on what sub market you're in.  

I like Delaware County to the west of Philly (Not West Philly). That's where most of my portfolio is. Decent amount of multifamily stock and cash flow is pretty good. Historically it hasn't done much in terms of appreciation but in the last 2 years it has gone up considerably. As you head west in the county prices start to go up and you find less multi's, but the eastern and southern parts of the county are pretty good. 

Hey @Angelito Mamutuk, if you are looking for multi-family opportunities I would look into urban areas. My recommendation for an area with a greater amount of inventory would be Philadelphia, especially since the shoulder season is upon us. 

Like you had mentioned - the Poconos will have more STR and SFR options. Although I wouldn't count this out on your search, as recently I've had a successful launch in the Poconos and have seen high rental rates ever since.

Always happy to help, don't hesitate to reach out at all! 

Live Free, 

JD

wow appreciate all the responses guys!! very helpful insight.

@Ryan Chatman I'll take a look at the Scranton/Wilkes Barre area and start reaching out to some folks over there. 

@Raymond Temprano my parents recently moved to Easton, PA about a year ago and to get there, I always drive through Lehigh Valley (I'm assuming that's the same area). I know there's a University there and a good amount of businesses. Will reach out to agents to get a better feel for that market. Thanks!

@Matt M. hahaha that makes it more enticing for me actually ;]

@Charlie Cooper Yes I'm actively putting in offers in the Poconos, PA area for STRs. Since you mentioned the need for SFHs, I may look at that as well. Main reason I'm leaning more towards the STRs is because a friend of mine and her group of buddies have two rentals there and are doing very well. We actually stayed in one of their properties before COVID and they gave some good insight into the area. 

@Travis Wylie Will definitely look into the Harrisburg area! I've heard good things about that area from other people looking to explore PA as an investing opportunity. Do you have a lot of Multi-family homes out there or more SFH rentals?

@Jonathan Dempsey would love to pick your brain a bit more on your success in the Poconos! Unfortunately we've been getting outbid with our offers (and we're offering asking or even more) so still hunting for deals out there.

@Ralph DiBugnara where did your purchase your SFH? in the Poconos? And going multi-family is a personal choice of mine. Ever since I learned about real estate, I was always drawn to multi-family rentals because the way I always viewed them was getting 2 houses for the price of one (or 3, or 4, depending how many units). Maybe down the road I'll explore more SFH rentals but my focus is SRTs in the Poconos market and/or multis in the above neighborhoods mentioned.

One thing I have come across that's a bit of a nuisance is putting in offers on houses I haven't physically seen with my realtor. With the homes in the Poconos, my realtor takes videos and sends it to me and my friends on houses we're interested in putting offers in. However, our realtor mentioned that sometimes sellers will not accept the offer, regardless of the amount, due to the fact that I haven't physically seen the property (which I understand is a potential concern). Unfortunately, logistically - it would be almost impossible to drive over and see every house we're putting an offer in due to time constraints, distance, and how competitive the market has been.

I'm assuming not all investors physically see every property and do long-distance investing. Is this just part of the process or how have you guys combatted this now or in the past?

Sorry if this is a stupid question haha

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@Angelito Mamutuk - There are some multi families, but they are going to be off market most likely if you're looking for any cash flow. In my opinion most of the stuff listed is priced too high that makes any sense. Everynow and then you'll find one that makes sense that is listed on MLS, but you better act quick cause it's getting scooped up in 24-48 hrs. You can still find single family properties that are listed that are bringing in 10% CoC and if you're strategic on location you're going to see some modest to good appreciation.

@Ralph DiBugnara oh that's great! Haven't really looked in that area. I just got an offer accepted in Coolbaugh Township (first one!). Heading over there Tuesday for home inspection.

I'm working with a lender now who helped me refinance my current home, but always willing to expand my network.

I think Philadelphia is a great market - seems to be getting alot of spillover from the more expensive NE markets and will continue to grow.  The older suburbs can be very affordable and have a varied housing stock (duplexes, SFHs, apartment buildings).  

Im also looking at NE PA - nice communities that need investment.  Although the appreciation isnt there, Im hoping that changes as it becomes a 'receiver area', especially for NYC.