Help! No one will rent or buy Temple U student rental!

Help! No one will rent or buy Temple U student rental!

Investor · Huntington Beach, CA · Member since 2018 · 29 posts · 8 votes

I own a student rental duplex a couple of blocks north of Temple University's main campus in North Philly which was hit hard by covid and is still struggling.  Up until early 2020, we had been fully rented with student groups at market rates, but once the school shut down for the pandemic and the area went downhill we have been unable to rent it to any groups (student or qualified non-student groups) even at steep rent discounts - it does not help that there have been multiple carjackings and a murder on our street during lockdown.  The property was built nearly ten years ago and has a tax abatement that is about to expire this december, and we tried to exit at a loss over the last year or so but have not gotten a single offer (even low ball) after listing several times at decreasing prices.  We recently got in touch with a recovery home operator who was interested in the Philadelphia market and were close to signing a lease for the company to operate out of our building, but the company has encountered issues with the city and has extended their pre-lease timeline indefinitely.  We looked into potentially airbnb'ing as a long shot, but the local rates and reservation frequency is extremely low.  We had a strong cash flowing asset until the unpredictable happened and now we are stuck with a major anchor in our portfolio.  Does anyone have any advice on how to improve this very bad situation?

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Rental Property Investor · Pittsburgh, PA · Member since 2019 · 530 posts · 511 votes
4y
Quote from @Christian Paluzzi:

I own a student rental duplex a couple of blocks north of Temple University's main campus in North Philly which was hit hard by covid and is still struggling.  Up until early 2020, we had been fully rented with student groups at market rates, but once the school shut down for the pandemic and the area went downhill we have been unable to rent it to any groups (student or qualified non-student groups) even at steep rent discounts - it does not help that there have been multiple carjackings and a murder on our street during lockdown.  The property was built nearly ten years ago and has a tax abatement that is about to expire this december, and we tried to exit at a loss over the last year or so but have not gotten a single offer (even low ball) after listing several times at decreasing prices.  We recently got in touch with a recovery home operator who was interested in the Philadelphia market and were close to signing a lease for the company to operate out of our building, but the company has encountered issues with the city and has extended their pre-lease timeline indefinitely.  We looked into potentially airbnb'ing as a long shot, but the local rates and reservation frequency is extremely low.  We had a strong cash flowing asset until the unpredictable happened and now we are stuck with a major anchor in our portfolio.  Does anyone have any advice on how to improve this very bad situation?


Would you consider seller financing? Could be a win-win. You recoup some loses long term and help someone out with attractive non-banked terms. 

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  • Rental Property Investor · Pittsburgh, PA · Member since 2019 · 530 posts · 511 votes
    4y
    Quote from @Christian Paluzzi:

    I own a student rental duplex a couple of blocks north of Temple University's main campus in North Philly which was hit hard by covid and is still struggling.  Up until early 2020, we had been fully rented with student groups at market rates, but once the school shut down for the pandemic and the area went downhill we have been unable to rent it to any groups (student or qualified non-student groups) even at steep rent discounts - it does not help that there have been multiple carjackings and a murder on our street during lockdown.  The property was built nearly ten years ago and has a tax abatement that is about to expire this december, and we tried to exit at a loss over the last year or so but have not gotten a single offer (even low ball) after listing several times at decreasing prices.  We recently got in touch with a recovery home operator who was interested in the Philadelphia market and were close to signing a lease for the company to operate out of our building, but the company has encountered issues with the city and has extended their pre-lease timeline indefinitely.  We looked into potentially airbnb'ing as a long shot, but the local rates and reservation frequency is extremely low.  We had a strong cash flowing asset until the unpredictable happened and now we are stuck with a major anchor in our portfolio.  Does anyone have any advice on how to improve this very bad situation?


    Would you consider seller financing? Could be a win-win. You recoup some loses long term and help someone out with attractive non-banked terms. 

  • Member since 2022 · 7 posts · 0 votes
    4y

    air bnb

  • Rental Property Investor · Philadelphia, PA · Member since 2013 · 139 posts · 232 votes
    4y

    You can get qualified private-pay tenants in just about any area of Philadelphia, if it's being marketed at the right price (message me privately if you want to discuss details, I also have a new construction unit near Temple on the rental market myself right now).

    Alternatively, you can look into what rental pricing you can get from Section 8 (HCV/PHA). Often for units with a large number of bedrooms, the price through this agency will be higher than market-rate, private-pay rental rates.

    Be careful if you are considering Airbnb, new legislation in Philadelphia has made it difficult to do so legally in most zoning districts unless you're willing to go through the variance process.

    https://permitphilly.com/2022/...

    https://whyy.org/articles/phil...

    https://www.phila.gov/media/20...

  • Real Estate Agent · Philadelphia · Member since 2021 · 24 posts · 7 votes
    4y

    Hey @Christian Paluzzi

    Sorry to hear about your situation. I'm surprised to hear that your're having such a hard time actually renting and/or selling your property given the super hot market and the amount of development happening up your way. 

    If you'd like a slightly unorthodox option you can check out companies like Bungalow, who will manage and basically guarantee you market rent. 

    I'm interested in knowing how you're marketing the property and at what price? If you're comfortable sharing. If you're going off market there are a lot of local REIA's that have plenty of aspiring buyers looking for multifamily's.

  • Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
    4y

    Multiple carjackings and a murder--tough area.

    Have you explored section-8 (???)

  • Investor · Huntington Beach, CA · Member since 2018 · 29 posts · 8 votes
    4y

    @David Lee Hall, III we would be open to seller financing if there were any interested parties!

  • Investor · Huntington Beach, CA · Member since 2018 · 29 posts · 8 votes
    4y

    @Noelle Carter thank you for the Bungalow suggestion, I had not heard of them but scheduled a call to get more information.

    In terms of marketing for sale, it was on the MLS several times and was distributed through email blasts to our agent's network, but our agent basically told us he did not think he could sell it after multiple attempts with no interest from 460K down to 420K. This property was our first and we would love to move on from it given what has happened, but we are very hesitant to go below 400K as that would basically mean losing every penny we invested in it (a not insignificant amount).

    We are currently contracted with a semi-wholesaler who is trying to sell it for as much as possible to then pay us 400K with no fees, but we have about a month left on the contract and they have not had any interested parties either.  Seeing as this does not look like it will pan out either, I am exploring the next option.

  • Investor · Huntington Beach, CA · Member since 2018 · 29 posts · 8 votes
    4y

    @Ethan Giller I cannot seem to DM you for some reason but would like to follow up on your post above, could you please message me when you have a chance?

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