Investor · Lafayette Hill, PA · Member since 2020 · 8 posts · 5 votes
Hello
I am looking to purchase my first rental property in the next few months and would like to hear about any ideas of where to search in Philadelphia or any of the surrounding areas - ideally no further than 30 miles from the city.
I am most interested in the brrrr strategy and would like to explore the option of a multi family property.
If anyone has first-hand experience in these markets, would you recommend looking at any particular area with the brrrr strategy (and possible multi fam) in mind? What is a safe closing costs percentage to use in this area when looking at a deal?
Any other related information would be greatly appreciated!
@Cole Hoffmann It depends on what your criteria is. If you are looking to spend as little as possible, I would recommend Southwest Philadelphia and farther up NE Philadelphia(Kingsessing/Elmwood Park or Frankford/Mayfair) If you want to spend a little more, I love areas like Germantown, West Oak Lane, and Mt Airy. If you want to buy things at the bottom of the market, I would highly recommend cash or hard money transactions.
Feel free to connect! Im happy to help any way I can!
That sounds like a good plan and based on your strategy, I'd suggest a couple solid, yet up-and-coming, areas that'll help you to benefit from appreciation at a, potentially, higher rate. This should lend well to the refinance portion of the brrrr strategy. Some marketplaces that come to my mind are Grays Ferry, Port Richmond or Brewerytown. There are certainly other areas to consider as well and with so many smart investors here on BP, I'm sure you'll receive some other recommendations.
I would also suggest that you connect with a knowledgeable real estate agent who specializes in some of these marketplaces as real estate tends to be hyper-local and their expertise (which is usually free to you) will become invaluable throughout your decision making process. Especially if you aren't very familiar with certain areas, as of yet.
Re mutli-family properties and just so you know, they do seem to come at a premium these days.
Your down payment and type of loan will impact your deposit but some additional fees to take into consideration would be Title, Real Estate Taxes, Insurance, Transfer Taxes, Home Inspection(s) and possibly some other items. Once again, a real estate agent should be able to help you fill in the blanks.
I hope this helps and best of luck with your investment!
@CJ Koch thank you for the response - I'm relatively familiar with all of these areas (I've been looking at Brewerytown recently) and will keep them in mind moving forward.
I'm hoping to connect with an agent in the area to discuss more about what I'm looking for and a few financing options for my first property. If there's an agent around the Philadelphia area I'd love to touch base asap.
@Cole Hoffmann It depends on what your criteria is. If you are looking to spend as little as possible, I would recommend Southwest Philadelphia and farther up NE Philadelphia(Kingsessing/Elmwood Park or Frankford/Mayfair) If you want to spend a little more, I love areas like Germantown, West Oak Lane, and Mt Airy. If you want to buy things at the bottom of the market, I would highly recommend cash or hard money transactions.
Feel free to connect! Im happy to help any way I can!
I've used hard money to do multiple deals in Philadelphia. The majority of which were flips, but I did refinance some as well. I think Brewerytown is a good place to start looking. The areas that @John L Desimone mentions are good, but the thing to keep in mind is lender's appetite as well. A lot of lender's in those areas aren't getting very aggressive, so you might get better cash flow, but you also will get less leverage.
These days I'm also lending in the area, so if you had any questions on how I or another lender would underwrite some of these deals, I'd be happy to work through some scenarios with you.
I agree with @Account Closed that multifamily properties will cost you a premium. It is far more difficult to make your money going in, and that is really where you want to make your money. You make it by buying deals. Also, multifamily properties tend to appreciate more slowly and have less in the way of exit strategies. A SFH's you can sell to anyone.
@John L Desimone I am looking to spend 200k and under including rehab costs. I'd like to purchase low and rehab so I can cash out refi and hold the property for cashflow. I am not as focused on a particular area for this first property, I'm more focused on getting the right deal for this strategy.