Investor · Hamilton, NJ · Member since 2013 · 49 posts · 9 votes
Hi everyone!
I've been doing a lot of market research on where I should build my long distance rental portfolio and have narrowed it down to the below list. In general there seems to be a good amount of cashflowing opportunities in these areas. I'm looking for additional confirmation or feedback on these areas before I pull the trigger. Any comments would be truly appreciated!
these are all in or around Philadelphia
Frankford Philadelpia Mayfair Philadelphia Tacony Philadelphia Wisinioming philadelphia Holmesburg Philadelphia Germantown Philadelphia
Chester, PA
linwood, PA
if anyone has any experience in these areas could you please opine or BRRRRability or even general investability?
Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
6y
@Bhanu Kuna you're missing the fastest growing county in Pennsylvania, Cumberland County in Central PA, near the state capital of Harrisburg. Prices are reasonable, interest rates are low and building is going on everywhere.
Investor · Swarthmore, PA · Member since 2016 · 22 posts · 9 votes
6y
Chester is tough. Lots of cash flow but it’s gonna be hard to get a appraisal high enough that a bank would want to lend on it. Do you know any lenders who will lend less than $50k with a fixed rate 30 year term? I would love to be able to buy lots of properties in Chester but I just haven’t been able to find a lender that will lend on cheap houses like that. I’ve been dealing mainly in Delaware county in $60k-$70k neighborhoods
Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
6y
@Bhanu Kuna you're missing the fastest growing county in Pennsylvania, Cumberland County in Central PA, near the state capital of Harrisburg. Prices are reasonable, interest rates are low and building is going on everywhere.
Investor · Hamilton, NJ · Member since 2013 · 49 posts · 9 votes
6y
@Robert Stranix I have a background in consumer lending so I think there might be other options out there for lending at this price point. Have you tried getting a personal line of credit? Or personal loan from lending tree? Most likely you wouldn't get a fixed 30 year term but the numbers might still work in you favor to build cashflow.
@David Krulac thanks for the guidance! I'll hop online and research Cumberland county. I'll try to see if the opportunities make sense for my goals!
Frankford Philadelpia -- Starting to get interesting Mayfair Philadelphia Tacony Philadelphia -- New luxury apartment project gives the neighborhood an interesting and unexpected vote of confidence. I do well in Tacony Wisinioming philadelphia Holmesburg Philadelphia Germantown Philadelphia -- There is a lot going on. it is as big as a city with many sub-neighborhoods and zip code. Learn the geography and demographics first. Prices are climbing steady. Rent is good. Tenants in some areas can be challenging.
Chester, PA
linwood, PA
if anyone has any experience in these areas could you please opine or BRRRRability or even general investability?
Not sure how you chose those. All depends on strategy and budget.... I would not consider Chester but there are investors there who probably do well. It does not fit my strategy and abilities.
Rental Property Investor · Pittsburgh, PA · Member since 2019 · 530 posts · 511 votes
6y
@Sheryl Sitman They lend across PA. They lend down to $25,000. Their specialty is cash flowing rentals below the valuation that typical large nationwide lenders will not lend on.
Investor · Hamilton, NJ · Member since 2013 · 49 posts · 9 votes
6y
@Sheryl Sitman thanks for the commentary! I picked these after looking for areas with low crime, easy access to highways, and mass transit. Also, on the surface, many properties look like they'll cashflow per 1% rule. Many properties are also significantly distressed and have lots of modernization opportunities.
Investor · Swarthmore, PA · Member since 2016 · 22 posts · 9 votes
6y
Thanks David I’ll look into riverview. I invest in section 8 rentals in Delaware county and Philadelphia using the brrrr method. I’ve stayed away from Chester because of the minimum loan requirements most lenders have.
Investor · Menifee, CA · Member since 2015 · 18 posts · 20 votes
6y
Be aware that in Chester you're dealing with renters that are pretty difficult. I have a family friend that let 5 properties go in Chester because he had so many tenants that wouldn't pay rent, ripped out copper, busted holes in the walls, spread feces all over the house, and would threaten his life when he mentioned an eviction. Not all cheap properties are worth it.
Investor · Swarthmore, PA · Member since 2016 · 22 posts · 9 votes
6y
@Abel Santos I’ve been investing in West Philadelphia, darby, Upper Darby, lansdowne mainly. I have one property in Chester that I bought with no financing just for the cash flow. All section 8
Contractor · Chadds Ford, PA · Member since 2015 · 567 posts · 460 votes
6y
@Bhanu Kuna I don't have any direct experience in the markets you discussed, but I have been looking at them as well lately. Opportunity for appreciation is exciting and opportunity for property level improvement seems excellent in most of those areas. The city did just change the way they handle tax abatements on new construction and major renovations, making them less valuable. I am curious how this will affect the seemingly unstoppable growth in many areas of the city.
I buy in Eastern Delaware County- Specifically Collingdale, Lansdowne, Glenolden, etc. I find cash flow to be great, tenants to be reasonable (you get problem tenants anywhere), and values to be achievable, but property taxes are outrageous, often 5% or more of property value. I am expecting taxes go down 10-20% on my properties in these specific areas based on the way the county wide reassessment is going, but that is yet to be seen. Once taxes go down I expect values to go up a bit because the monthly payment is more affordable and more people will find the area affordable. Could this be wishful thinking because I own property here? Absolutely, but I have done a lot of research to back those expectations up. Would love commentary on those expectations from other investors in the area.
@Bhanu Kuna I don't have any direct experience in the markets you discussed, but I have been looking at them as well lately. Opportunity for appreciation is exciting and opportunity for property level improvement seems excellent in most of those areas. The city did just change the way they handle tax abatements on new construction and major renovations, making them less valuable. I am curious how this will affect the seemingly unstoppable growth in many areas of the city.
I buy in Eastern Delaware County- Specifically Collingdale, Lansdowne, Glenolden, etc. I find cash flow to be great, tenants to be reasonable (you get problem tenants anywhere), and values to be achievable, but property taxes are outrageous, often 5% or more of property value. I am expecting taxes go down 10-20% on my properties in these specific areas based on the way the county wide reassessment is going, but that is yet to be seen. Once taxes go down I expect values to go up a bit because the monthly payment is more affordable and more people will find the area affordable. Could this be wishful thinking because I own property here? Absolutely, but I have done a lot of research to back those expectations up. Would love commentary on those expectations from other investors in the area.
I read the same thing about Philly tax abatements being phased out. I don't think that'll have a tremendous impact. Jersey City took similar actions with their tax abatements program and it didn't really slow down construction downtown.
Can't really provide educated commentary about reduction in real estate taxes in those counties. However, I wouldn't bet on the reduction. Hard to imagine local municipalities willingly giving up a primary revenue stream.
Contractor · Chadds Ford, PA · Member since 2015 · 567 posts · 460 votes
6y
@Bhanu Kuna Good point about tax abatements. Hopefully it doesn't have much impact. People love the instant gratification so they will likely buy based on the almost non existent taxes, then get surprised every year as it goes up.
For the reassessments- the municipalities/county/SD's can't/won't reduce or increase tax revenue, it just gets shifted. The county estimates that 1/3 of properties will see higher taxes, 1/3 will see no change, and 1/3 will see lower taxes. The properties that see lower taxes will generally be the ones that have not increased in value relative to the other properties in the county/municipality/SD, and vice versa for the ones that see higher taxes. The properties that increased in value along with the average property in their municipality/county/SD will see no change. Since areas like Collingdale and Lansdowne have not gone up in value at similar rates to Media, Radnor, and other higher priced areas of the county, the county taxes should go down. It would take a much longer post to comment on each SD/municipality, but generally the lower priced parts of those areas should see tax reductions.
@Sheryl Sitman They lend across PA. They lend down to $25,000. Their specialty is cash flowing rentals below the valuation that typical large nationwide lenders will not lend on.
What would be their typical application and origination fees? Doing loans that low costs just as much in effort as bigger loans, but bigger loans have the promise of more revenue coming in over time. So I imagine that this lender gets the money up front somehow.
Rental Property Investor · Pittsburgh, PA · Member since 2019 · 530 posts · 511 votes
6y
@Steve Babiak When compared side by side with Lima One on a 30 yr note they were about 1% point higher on APR. Don't recall offhand points delta unfortunately.
Investor · Wilmington, DE · Member since 2013 · 394 posts · 123 votes
6y
@David Krulac. Hey David. Saw you speak at a Delreia meeting and bought your book- great info. Do you have specific areas of Cumberland county that are favorable for buy and hold? Thanks
Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
6y
@Eric Armstrong The prime drivers in the area are the employers, #1 is the state government with the capital here in Harrisburg, and #2 is the Federal government. Therefore the employment is very stable. There is a new hospital under construction, and lots of transportation and warehousing employers. Amazon has 2 locations here as well. And in the other direction going east from Harrisburg is Hershey with the candy factories, amusement part, arena, and a teaching hospital. The inner circle is anywhere 20 miles or less from Harrisburg and the outer circle is anywhere within 50 miles. Once you get past 50 miles there are less commuters to Harrisburg area employers. Within Cumberland County the eastern half is closer to Harribsurg and the western half is more rural and agricultural.
Rental Property Investor · Mechanicsburg, PA · Member since 2018 · 281 posts · 176 votes
6y
@David Krulac - Definitely agree with your comment and analysis to Eric.
Good K-12 schools as well in general. Lots to like about Cumberland County and investing. Also, you can easily get on the interstates and turnpike and be in the larger cities for day trips or weekends away (Philadelphia, Pittsburgh, Baltimore, DC, NYC, Gettysburg) so its a great location in PA. A lot for a renter to like. As an investor, some areas with low property taxes too.
Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
6y
@Account Closed Agree 100%, I've been investing in Cumberland County and the surrounding counties for a long time. The market is hot, interest rates are low, demand is high and supply is low.
@David Krulac Thanks for your inputs on investment in Cumberland County. I am looking to purchase properties in PA from an investment perspective and would like to know if you have properties for sale or the person to contact to purchase properties?