Investor · Havertown, PA · Member since 2016 · 15 posts · 9 votes
I am 23 from Philadelphia and I have two small 3 bedroom row homes. 1st I bought for 40k and it gets 1100 a month, other was 22k and gets 875 a month. Cash flow is good but refinancing these is expensive and a poor. ( 31k on a 75% refinance of the 40k property, plus 5k worth of closing leaves me with 26k out on it) Better to stay on this path or purchase a 4 unit quadplex under the FHA 203k. I will qualify for a loan next year. ( will have 2 years of income under my belt to work with) Really need some advice!
Property Manager · Philadelphia, PA · Member since 2015 · 515 posts · 196 votes
9y
203k requires you to have the intention to live there. Multifamilies tend to carry less operating costs; but they tend to not appreciate/build equity as well. Also, they don't tend to be liquid nor sell as well being they only attract investors. Sounds like you're doing well!
Investor · Havertown, PA · Member since 2016 · 15 posts · 9 votes
9y
Yeah that is something I figured I could deal with for the period of time. So single family is going to be better for equity and building appreciation? i was thinking of the quadplex in a nice suburb like havertown or broomall. since your from my area you know where these places are. (upper darby, darby)
Investor · Philadelphia, PA · Member since 2014 · 351 posts · 80 votes
9y
I love the idea of buying a multi-unit instead of SFHs @Connor Eichman. I am in the same boat (Have good cash-flowing SFHs but they're expensive to Refi.
I have recently began to acquire my property thru my LLC. The Refi is still expensive for "cheaper" investments, but there is little to no seasoning period (Meaning as soon as the property is leased and rented to can pull equity and move on to the next deal)
What you are doing sounds like it is working, so I'd continue on that path.
Investor · Havertown, PA · Member since 2016 · 15 posts · 9 votes
9y
Thanks Ryan!
The other issue i run into with the refi is most banks won't let you refi with an investment property until 6 months after you purchase it if you want to take the money out on the appraised value. ( which anyone would if they thought they got a deal or made a repair and wanted more money out. )
That and the lack of appreciation of the areas i am buying in ( upper darby, Darby) is what makes me wonder about buying a building with a 203k loan. What you think about that situation? @ryan cameron
Investor · Philadelphia, PA · Member since 2014 · 351 posts · 80 votes
9y
@Connor Eichman Using a 203K for a Multi-unit? I don't see why not, but I'd give more thought about having a huge mortgage in an area like Darby. That area is not appreciating anytime soon, but I'm sure it cash flows nice. Also consider the much higher Delco property taxes vs. Philly property taxes.
Investor · Havertown, PA · Member since 2016 · 15 posts · 9 votes
9y
I was thinking of the multi family somewhere in broomall or havertown, maybe brookhaven... and yeah i agree with you on that, just cash flow properties down there.
Property Manager · Philadelphia, PA · Member since 2015 · 515 posts · 196 votes
9y
I agree - 203K can certainly be done on a multifamily. You just need the intention to live there. I think Delco is stable. Working class neighborhoods tend to be.