Philadelphia multi family cash flow turn key

14 Replies

Hello BP Family,

Does anyone have any experience with turn key property companies in Philadelphia? If so, who are the best out there? Would anyone recommend this route for an out of state investor such as myself? Or would it be more advantageous/cost effective to go the tradtional route of finding a turn key property via a real estate agent and then setting a team in place thereafter - property manager, handyman etc.? I am a newbie investor looking to invest in high cash flow multi families in Philadelphia in the hopes of also getting price appreciation and the ability to add value somehow. Any advice on the best way to approach this goal or anyone currently on the ground there already achieving this would be greatly appreciated.

Thanks,

Pierre

@Pierre Streat

My name is Ugo, Realtor and Investor on the grounds in Philadelphia and surrounding areas. 

I typically don't recommend out of state investing but NY to Phila is difference, very very different. I've seen many New Yorkers come down to our Sheriff sales and just go to town buying up everything since they've never seen property priced so low. 

Philadelphia is a great market and cash flow is there, especially if you don't mind making ugly things pretty. Taxes are super low so the cash flow is there. Rental market is strong and single families tend to hold their value or appreciate over 3-5 years (based on location of course). There are cons as well right, high crime rate, and an inconsistency in neighborhood class ( you'll have a B+ area two street from a C-). 

Best of luck with everything, let me know if there is anything I can do to help.

Hi Pierre,

How are you.

I teach classes on understanding how to properly buy Multi's in the Philadelphia Market. Please contact me if you would like a solid referral to agents that understand the market.

Regards,

Joe Scorese

Originally posted by @Ugochukwu Opara :

@Pierre Streat

My name is Ugo, Realtor and Investor on the grounds in Philadelphia and surrounding areas. 

I typically don't recommend out of state investing but NY to Phila is difference, very very different. I've seen many New Yorkers come down to our Sheriff sales and just go to town buying up everything since they've never seen property priced so low. 

Philadelphia is a great market and cash flow is there, especially if you don't mind making ugly things pretty. Taxes are super low so the cash flow is there. Rental market is strong and single families tend to hold their value or appreciate over 3-5 years (based on location of course). There are cons as well right, high crime rate, and an inconsistency in neighborhood class ( you'll have a B+ area two street from a C-). 

Best of luck with everything, let me know if there is anything I can do to help.

 Thanks for your reply Ugochukwu. Question though, why do single families tend to hold their value or appreciate more in Philly? What don't multi families perform as well or better? Please educate me.  

Originally posted by @Bruce Faulk :

Thanks for starting this thread @Pierre Streat. I am in the same boat- New Yorker looking for investment in Philly. Specifically looking for multi-family turnkey or BRRR. Look forward to hearing who has info. Thanks all.

 No problem Bruce! Hope we can both gain some valuable insight on Philly multi fam's here. Bigger Pockets community we appreciate your help!

Originally posted by @Pierre Streat :
Originally posted by @Ugochukwu Opara:

@Pierre Streat

My name is Ugo, Realtor and Investor on the grounds in Philadelphia and surrounding areas. 

I typically don't recommend out of state investing but NY to Phila is difference, very very different. I've seen many New Yorkers come down to our Sheriff sales and just go to town buying up everything since they've never seen property priced so low. 

Philadelphia is a great market and cash flow is there, especially if you don't mind making ugly things pretty. Taxes are super low so the cash flow is there. Rental market is strong and single families tend to hold their value or appreciate over 3-5 years (based on location of course). There are cons as well right, high crime rate, and an inconsistency in neighborhood class ( you'll have a B+ area two street from a C-). 

Best of luck with everything, let me know if there is anything I can do to help.

 Thanks for your reply Ugochukwu. Question though, why do single families tend to hold their value or appreciate more in Philly? What don't multi families perform as well or better? Please educate me.  

Hi Again!

Good question!

Single families just have wider pool of buyers where as multies tend to go to the investor. 

Multies tent to only be bought based on the rent they can pull, so unless the rent goes up in that area, the value of that multi will stay exactly the same. Of course certain areas just don't go by this rule. 

Philly is very affordable with low property taxes and low home values compared to neighboring areas 

Hi Pierre:

I live in Brooklyn too and just bought my first multi. I wasn't looking for turnkey, but noticed there are quite a few of them in the regular listings on redfin. I think you could go either route, agent or turnkey company, but the former is likely to be a lot more time-consuming. If you go the turnkey company route, I think you should at least familiarize yourself with Philly neighborhoods, so you're not flying blind when choosing an offering. That way you can better assess if a property is fairly priced, and whether or not it's a good long-term investment. I wouldn't buy a turnkey property in an area with a high vacancy rate, for example, unless the neighborhood was on the upswing. 

I don't know enough to recommend a turnkey company. There are some people on BP who represent Maverick, which seems to be some kind of consolidator of various turnkey outfits all over the country. Here are their current offerings in Philly. I find the expected rent on some of those high, but presumably that's what tenants are paying. I don't see any particular risk in going that route first, since evaluating a turnkey deal is no different from evaluating something you find yourself so long as there are no restrictions on doing due diligence. It's either a good deal or it isn't. Since these deals usually come bundled with a management company, you should make sure it's a good one. 

Good luck!

Originally posted by @Mike Girard :

Hi Pierre:

I live in Brooklyn too and just bought my first multi. I wasn't looking for turnkey, but noticed there are quite a few of them in the regular listings on redfin. I think you could go either route, agent or turnkey company, but the former is likely to be a lot more time-consuming. If you go the turnkey company route, I think you should at least familiarize yourself with Philly neighborhoods, so you're not flying blind when choosing an offering. That way you can better assess if a property is fairly priced, and whether or not it's a good long-term investment. I wouldn't buy a turnkey property in an area with a high vacancy rate, for example, unless the neighborhood was on the upswing. 

I don't know enough to recommend a turnkey company. There are some people on BP who represent Maverick, which seems to be some kind of consolidator of various turnkey outfits all over the country. Here are their current offerings in Philly. I find the expected rent on some of those high, but presumably that's what tenants are paying. I don't see any particular risk in going that route first, since evaluating a turnkey deal is no different from evaluating something you find yourself so long as there are no restrictions on doing due diligence. It's either a good deal or it isn't. Since these deals usually come bundled with a management company, you should make sure it's a good one. 

Good luck!

 Thanks for the reply Mike. Where did you buy your first multi in Philly and why that area? Did it require a lot of renovation and how did you go about finding a good contractor down there? I am currently considering student housing in Philly due to what seems like consistent cash flow and some price appreciation as the Universities continue to build out. What are your thoughts on student housing down there?

Originally posted by @Mike Girard :  
 
I think you could go either route, agent or turnkey company, but the former is likely to be a lot more time-consuming. 

Mike -- yes, working with a real estate agent is often difficult and more time consuming because they don't usually work with investors and are not familiar with what we're looking for or require. They are rarely investors themselves. And, they are limited to properties that are listed on the local MLS, whereas a good turn key provider will have off-market properties available for you.

.  

...evaluating a turnkey deal is no different from evaluating something you find yourself so long as there are no restrictions on doing due diligence. It's either a good deal or it isn't. Since these deals usually come bundled with a management company, you should make sure it's a good one.

Well said.  The due diligence is similar and always required, but a good provider will have some of your due diligence done for you and guide you through the rest of it.

Continued success!

Originally posted by @Marco Santarelli :
Originally posted by @Mike Girard:  
 
I think you could go either route, agent or turnkey company, but the former is likely to be a lot more time-consuming. 

Mike -- yes, working with a real estate agent is often difficult and more time consuming because they don't usually work with investors and are not familiar with what we're looking for or require.  They are rarely investors themselves.  

That's not what I meant. Some real estate agents are investors themselves and can be hugely helpful to a newbie, not simply in the way of offering good advice but also hooking you up with trusted lenders, inspectors, contractors and vendors. 

I meant that using an agent is more time-consuming because you have to sort through more listings to find turnkey properties than if you simply go to a turnkey company.  Going this route will also expose you to more properties in need of renovation, whereas the turnkey outfit will likely have already done the rehab. If you find your own turnkey property, you may also have to choose a management company. This can be a plus since it gives you more choice, but it's still work you wouldn't have to do if you worked with a turnkey company. 

The point you make about additional properties beyond the MLS is a good one, especially since the choice isn't that great much of the time and the good ones get scarfed up very quickly.


 Thanks for the reply Mike. Where did you buy your first multi in Philly and why that area? Did it require a lot of renovation and how did you go about finding a good contractor down there? I am currently considering student housing in Philly due to what seems like consistent cash flow and some price appreciation as the Universities continue to build out. What are your thoughts on student housing down there?

Not sure I can be too helpful on any of this. I'm just starting out myself and as I've decided to move to Philly and live in my first property, I bought with more than cashflow in mind. Others can speak more knowledgeably about student housing. I'm staying away from it myself simply because the Temple area seems to carry a high vacancy risk and University City is too expensive for me. But take that with a grain of salt and consider it against people who have more experience. 

Also can't help on contractors since my rehab hasn't started yet. If you find out anything on that score let me know. 

Hi Pierre.  ABC Capital Investments does a TON of turnkey properties in Philly.  I am under contract on a few multifamily properties with them now that have very good cash flow.  Give Jay Walsh a call and he will show you what he has going on around the city.

Hi Pierre,

It's been a few months since we talked. I stumbled on your post today and wanted to touch base.

While Philly can feel like a block-by-block city (and in many neighborhoods it is), there are plenty of areas that have consistency and easily predictable values. That's what I focus on providing for our clients at Turn Key Philly.

I'm not sure if you are still looking for an investment in Philadelphia, but I'd be happy to discuss some areas and options.