After several months of trying to find some BRRRR strategy options in West Philly we've decided to look elsewhere. We were under contract for 2 different properties but both ended up needing full gut rehabs for over 70k in repairs and the ARV was too low to be able to pull anything back out of the deal when we refinanced. Has this happened to anyone there?
So we are looking into Scranton or maybe other areas that might work. Any ideas? We live in Jersey City so would like to either be a few hours away or have a solid team on the ground to handle everything.
Thanks in advance
Many areas of West Philly the ARVs are not that great, but the cash flow is. West Philly is a big place that breaks down in several neighborhoods. We have been able to successfully BRRRR in West Philly but the ARV can often play an issue in getting all money back.
There is an area of Scranton bounded by the University, the Medical Center and the Park. I've looked at doing BRRRRs there but don't have a team on the ground.
Thanks guys for the replies. Looking to get some boots on the ground in Scranton soon. About to start some direct mail campaigns in west philly. I will keep everyone posted once we've got a deal in the works.
@Lloyd Spencer , we own and run Synergy Property Management Group. All though we only self manage our properties, we have one hell of a team. I’ve been doing BRRRs since 2002. Our grip in South and East SCRANTON is pretty strong. Almost everything on the market we have pre-viewed. At the moment we are working on 5 property projects. If we can help with anything please let me know. My main advice is to be careful with zoning, permits, and licensing..
Currently working on a West Philly duplex BRRRR.
The Buy and Rehab went well - rehab was mostly cosmetic. However, when we went to the city to get 2 rental licenses we were told the city had no historical property records for the property, and thus no evidence of it being multi family.
The property is properly zoned RM1, and there are probably 40 other duplexes on the block. The process with L+I has been challenging, and we're walking a fine line not trigger the need for a new CO.
Agree with the points in this thread, @Adam Guiffrida , be careful with zoning, permits, and licensing. And @Irfan Raza , the rents for the area are quite strong, but I have concerns about ARV when we try to Refi.
@Jon Graboyes , If you have had two electric meters and possibly two water meters you should be able to show that this building is "grand-fathered in." Here is Scranton, the City cannot take the use away if it has already been converted into a multi-family unless it has been condemned.
But even if you go in front of the zoning board, if duplexes are common in the neighborhood, than you should have no issue getting it legitimately. They have no grounds to deny the application if it is consistent with the neighborhood.
Good luck with everything
@Adam Guiffrida just having separate meters in Philly does not allow you to be grand-fathered in, in my experience. I can see how that may be applicable to other municipalities. @Jon Graboyes I think you definitely are lucky that the property is zoned RM1. It makes it a much easier process than having single family zoning, which would likely require you to go through the zoning board.
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