NJ small time investor looking at PA

[Santanu Bera]

Hey guys, just a new member here. From Princeton area, have a few properties in Jersey, looking increasingly to Philly area for multi-family investment. Finding it difficult to gauge Philly neighborhoods that will maintain demand and low vacancy, metrics change from one block to next. Also there is so much development going on with opportunities to appreciate. Would help to have any suggestions or guidelines on which areas to look out for. I am open to Lehigh area as well. 

[Julio Gonzalez]

Hi Santanu, glad to have you as a part of this awesome community!

[Alan Asriants]

Hey Santanu, welcome to the community! I have about 10 units in the Phila area and I mainly specialize in the NE section of Philadelphia. This area consists of many Twin style multi-famliy properties that area easy to work with (cookie cutter), and have an incredibly high demand for rent. When I post my listings I am getting about 50 calls the first day. The inventory here is low, and with the current rates you might not be making a killing, but you will not have trouble renting it out. These tenants usually stay for a while since these properties have garages, backyards, and a tight knit community. The tenant pool here is also very good. With a proper application check, these tenants pay on time and take care of your property. Princeton is not too far from here either. Let me know if you're looking to connect, I'd be happy to go into more detail. Hope this helps. 

[Eric Greenberg]

If I were you Id head to Philly (or where ever you plan to invest) to get a better understanding of the specific neighborhoods you are interested in. 

That said, areas closer to center city - spring garden to washington ave between the rivers will be mostly A/B neighborhoods with high demand assuming its priced right. It may be tough to make the numbers work in these areas for LT rentals. 

From there north Fairmount, Parts of Brewerytown, Northern Liberties, Fishtown, parts of Olde Kensington are in high demand and south passyunk east, and west close to the universities but can change drastically heading west or closer to the park/zoo. 

Look at where there are a ton of new higher level restaurants popping up. That will usually tell you where the progression is happening/already happened. 

[Joseph Micheal]

Quote from @Eric Greenberg:

If I were you Id head to Philly 

Agreed 100%!  Take a drive! See if you like the neighborhood.  Check out the block at 10PM. 
Coming from Princeton, this is a very easy thing to do.  In Philly, a neighborhood can quickly change block to block!

[Andrew Syrios]

Welcome aboard Santanu and best of luck investing!

[Santanu Bera]

Hi all, thank you! These are really helpful tips. I have driven around some areas and liked West Philly/University City area up and until 44th - there are many large apartment complexes going up around Chestnut/Walnut. Also liked Port Richmond, West Kensington areas. Also City Center of course but here rents don't support numbers at current mortgage rates. 

Haven't explored areas @Eric Greenberg mentioned, so definitely on my list. I really liked the idea of driving around late evening and track areas with new good restaurants.

I liked a property on South 44th, however it is rated 6/10 high risk on Flood Factor. Do you guys look at this metric for new properties? It is not FEMA flood zone.

[Dmitriy Fomichenko]

Welcome to BP community @Santanu Bera ! It is a great place to meet new friends and learn about various aspects of real estate and more.

Find and connect with other BP members that are in your area: https://www.biggerpockets.com/search/users

Best of luck on your REI journey!

[Eric Greenberg]

Quote from @Santanu Bera:

Hi all, thank you! These are really helpful tips. I have driven around some areas and liked West Philly/University City area up and until 44th - there are many large apartment complexes going up around Chestnut/Walnut. Also liked Port Richmond, West Kensington areas. Also City Center of course but here rents don't support numbers at current mortgage rates. 

Haven't explored areas @Eric Greenberg mentioned, so definitely on my list. I really liked the idea of driving around late evening and track areas with new good restaurants.

I liked a property on South 44th, however it is rated 6/10 high risk on Flood Factor. Do you guys look at this metric for new properties? It is not FEMA flood zone.

I love that area near Clark Park! As for flooding, I dont personally care in most of Philadelphia as its all tens of feet above sea level but isnt an issue flood wise that I have experienced. What I would look at are places that historically flood every X years, example being main street Manayunk. 

[Alec Kearns]

I agree with Eric, most of Philly is not at risk of major flooding. Aside from 1 instance in the last few years when the Schuylkill river flooded homes along the river banks there isn't much risk of major flooding.

Philly is very unique, especially with the new construction tax abatements of the last decade which caused a major push for new developments and some areas faired better than others.

I had a new investor buy a very nice 4 bedroom in Brewerytown which he rented out for $2,550/month. The first tenants were in their 20's and I remember the father came to help them move in on key exchange day and he flipped out because of what he saw on the 2 blocks he walked past to get to their street. He wasn't from the area and didn't realize that starting around their street the property values changed dramatically and about 2 blocks in the other direction you had some of the nicest eateries and brew pubs in the area.

So yes, Philly is a unique city! Good luck and shoot me a message if you need anything!

[Santanu Bera]

Quote from @Eric Greenberg:

Quote from @Santanu Bera:

Hi all, thank you! These are really helpful tips. I have driven around some areas and liked West Philly/University City area up and until 44th - there are many large apartment complexes going up around Chestnut/Walnut. Also liked Port Richmond, West Kensington areas. Also City Center of course but here rents don't support numbers at current mortgage rates. 

Haven't explored areas @Eric Greenberg mentioned, so definitely on my list. I really liked the idea of driving around late evening and track areas with new good restaurants.

I liked a property on South 44th, however it is rated 6/10 high risk on Flood Factor. Do you guys look at this metric for new properties? It is not FEMA flood zone.

I love that area near Clark Park! As for flooding, I dont personally care in most of Philadelphia as its all tens of feet above sea level but isnt an issue flood wise that I have experienced. What I would look at are places that historically flood every X years, example being main street Manayunk. 

Thank you very helpful 

[Santanu Bera]

Quote from @Alec Kearns:

I agree with Eric, most of Philly is not at risk of major flooding. Aside from 1 instance in the last few years when the Schuylkill river flooded homes along the river banks there isn't much risk of major flooding.

Philly is very unique, especially with the new construction tax abatements of the last decade which caused a major push for new developments and some areas faired better than others.

I had a new investor buy a very nice 4 bedroom in Brewerytown which he rented out for $2,550/month. The first tenants were in their 20's and I remember the father came to help them move in on key exchange day and he flipped out because of what he saw on the 2 blocks he walked past to get to their street. He wasn't from the area and didn't realize that starting around their street the property values changed dramatically and about 2 blocks in the other direction you had some of the nicest eateries and brew pubs in the area.

So yes, Philly is a unique city! Good luck and shoot me a message if you need anything!

Couldn't agree more. In early days of exploring Philly we carried our experiences from NYC and Jersey and could not understand how it changes so much from one block to next. 

[Alan Asriants]

Quote from @Santanu Bera:

Quote from @Alec Kearns:

I agree with Eric, most of Philly is not at risk of major flooding. Aside from 1 instance in the last few years when the Schuylkill river flooded homes along the river banks there isn't much risk of major flooding.

Philly is very unique, especially with the new construction tax abatements of the last decade which caused a major push for new developments and some areas faired better than others.

I had a new investor buy a very nice 4 bedroom in Brewerytown which he rented out for $2,550/month. The first tenants were in their 20's and I remember the father came to help them move in on key exchange day and he flipped out because of what he saw on the 2 blocks he walked past to get to their street. He wasn't from the area and didn't realize that starting around their street the property values changed dramatically and about 2 blocks in the other direction you had some of the nicest eateries and brew pubs in the area.

So yes, Philly is a unique city! Good luck and shoot me a message if you need anything!

Couldn't agree more. In early days of exploring Philly we carried our experiences from NYC and Jersey and could not understand how it changes so much from one block to next. 

 This is more of a situation closer to downtown (Brewerytown, Northern Liberties, Fishtown, etc) Outskirts tend to be consistent aka NE

[David Ribardo]

Hello, and welcome to the community! I grew up in Plainsboro, and currently live, work, and invest in the Lehigh Valley. I'd recommend you take a look at this market too.

Comparative to Philly, you will find that the landlord / tenant laws are much more favorable towards investors. The ease of management, quicker turnaround if you have to do an eviction, and simpler inspection requirements make it a little nicer from a management perspective. The return on investment numbers are similar. The biggest challenge you will find here is a lack of inventory. In Philly there are tons of off-market deals available through wholesalers, but in the Lehigh Valley the ones that come across my desk usually have some deal-stopping issues. As such, we have had to come up with some creative strategies to get our clients properties. We typically are seeing new investors that are looking for a BRRRR strategy duplex go under contract within four weeks of starting their search.

[Yiyi Zhang]

Quote from @David Ribardo:

Hello, and welcome to the community! I grew up in Plainsboro, and currently live, work, and invest in the Lehigh Valley. I'd recommend you take a look at this market too.

Comparative to Philly, you will find that the landlord / tenant laws are much more favorable towards investors. The ease of management, quicker turnaround if you have to do an eviction, and simpler inspection requirements make it a little nicer from a management perspective. The return on investment numbers are similar. The biggest challenge you will find here is a lack of inventory. In Philly there are tons of off-market deals available through wholesalers, but in the Lehigh Valley the ones that come across my desk usually have some deal-stopping issues. As such, we have had to come up with some creative strategies to get our clients properties. We typically are seeing new investors that are looking for a BRRRR strategy duplex go under contract within four weeks of starting their search.

Plus one on what David said, both markets would work and have their own pros and cons. Given both are close to your area, I would suggest you network with local investors and go with the one you feel most comfortable with, based on the team you can build there. 

[David Ribardo]

Quote from @Yiyi Zhang:

Plus one on what David said, both markets would work and have their own pros and cons. Given both are close to your area, I would suggest you network with local investors and go with the one you feel most comfortable with, based on the team you can build there. 

 That's sound advice. It doesn't matter how good the market is, if you don't have the right folks on the ground working for you, you will never be able to hit your numbers. It's like a chain - from the deal source, to the agent, to the contractor, to property manager, to the tenant. Only when all of them are strong and well connected will you be able to accomplish your goals. Some of my clients are having an interesting experience with their move expanding down towards Philly right now. It's not because the market is any better or worse, it's just driven by the people that they have chosen to work with there.

My business coach always says, "the best date is the first date". I always say, "fire your property mangers early, fire them often, until you find the right one". Either way, surrounding yourself with a strong team on the ground is key to success.

[Yiyi Zhang]

With that being said, I definitely suggest you connect to as many investors as you can, and David Ribardo is definitely some one you want to reach out in Lehigh Valley area if you want to explore there more. I have been working with him and his team since last Nov, only good words about them, so maybe I'm little biased on this. You can also check out other folks in the forum from the area, all are very friendly and helpful! 

[Sheryl Sitman]

@Santanu Bera lots of great advice here from good people! I am a SFH investor in Philly, surrounding suburbs, Lehigh Valley and several other non-PA markets. Just know that you may find more interesting SFHs in these markets that could be great additions to a portfolio. And that generally comes with better tenants and easier exit strategy. But everyone has the strategy that works for them. I think gurus created so much buzz around the small MF space that they inflated the prices. "Philadelphia Landlords Connect" group members have lots of experience in all Philly neighborhoods

[Santanu Bera]

Quote from @Sheryl Sitman:

@Santanu Bera lots of great advice here from good people! I am a SFH investor in Philly, surrounding suburbs, Lehigh Valley and several other non-PA markets. Just know that you may find more interesting SFHs in these markets that could be great additions to a portfolio. And that generally comes with better tenants and easier exit strategy. But everyone has the strategy that works for them. I think gurus created so much buzz around the small MF space that they inflated the prices. "Philadelphia Landlords Connect" group members have lots of experience in all Philly neighborhoods

 @Sheryl Sitman - thanks for the advice on SFH opportunities, and definitely planning to keep SFH in mind. Also, I requested to join the Philadelphia Landlords Connect FB group. Looking forward to the connects there. Thanks all - great advice.

[Sloane Kraftsow]

Welcome to the BP community! This site is an incredible platform that has numerous resources so definitely take advantage of it all. I'd love to set you up with some PA people to talk to. I have a lot of contacts there.

Would love to connect.