Investing in Reading,PA

[Simon Yosepov]

Hi everyone, I'm new to BiggerPockets so first of all nice to meet all of you guys and thanks for the help. I'm planning to purchase in the next month 5 units property in Reading,PA , I see there a lot of potential for a great Cash Flow without appreciation , I found a good deal with 13% Cap rate after Mortgage. It's a little bit scary to see that kind of deal , I know Reading,PA isn't the best place to live in and there is no have any appreciation and the tenants can be hard sometimes. But I want to know from pros what you guys thinking about the Reading Area? Should I invest in that kind of.deal over there? I live an hour from the property.

[Dom Cassissa]

I have 10 units in Reading - we bought this building in September 2021 & inherited all our tenants. As month by month goes, yes we're having some difficult tenants but weeding them out as we go. What caught my attention to the city is I do see change coming. They just approved a new Amtrak line to go from Reading all the way into Philly to tie into the major east coast Amtrak line. This will allow both Reading residents to travel a bit easier to more affluent areas to make more pay & for residents living somewhere more expensive like Philly to keep their better jobs and relocate. The city of Reading is also pushing massive revitalizing to clean up some larger buildings & have been granting state & city funds to do so. Then you have Alvernia University on Penn St. that opened a new massive project creating foreign exchange student programs, jobs & more. There's a new Starbucks in the building as well ( As Grant Cardone says, poor people don't buy $5 coffees where there's Starbucks there'll be money lol). The city & state also just passed a big budget for an infrastructure project redoing highways and roads which will increase traffic to the city & create more jobs. There's a lot of pros looking forward, but for the time being it will be a little bit of work. Also remember this whole city is OLD, buildings and properties need maintenance, a lot were ignored by bad landlords in the past so don't think a good price with a high cap rate is a no strings attached deal. We're seeing about $11k to rehab an apartment to achieve $150-200/month rent raises. In addition we're finding lots of "old property problems" leaky pipes, wood rot in some areas as most have original windows & framing on the exteriors.

To sum it up, I see long term potential but this isn't an easy "buy & hold with a fat cap rate" you will need to put some work in & make sure you have a solid manager in place to help you deal with your problems as they come.