Help in Evaluating Philadelphia Real Estate

9 Replies

Hi BP Community!

I'm a new investor based in NY, looking for my first property. I've done some extensive top-down research on attractive cities for single-family or small multi-family (duplex, triplex) buy & hold rentals and Philadelphia has come out on top.

I'm looking to understand what would be a reasonable gross cap-rate to expect when investing in Philadelphia given a budget of $150K - $200K. Using online data bases such as (Zillow, Trulia and Redfin) come across as unreliable or inconsistent in terms of evaluating comps. Any areas I should be focusing on in particular?

Additionally, what are some good sources to find reliable input assumptions (rental rates, tax rates, vacancy rates, growth rates for rents and house prices) for modeling a deal?

Am I missing something in how I am thinking about my approach? If someone has a few minutes for a phone call, I would love to find some time to chat about your experience in the Philly market.

Thanks,

Alex

Hi @Alex Schukin,

Welcome to BP!

There are a few things you need to consider when evaluating Philadelphia based on that price point, asset class and return on your investment. What neighborhoods are considering in Philadelphia. Philadelphia is made up of Neighborhoods and there numbers vary neighborhood to neighborhood. Have you considered some Due Diligence attending some CDC or RCO meetings here in Philadelphia. Ecspecially a zoning meeting to that designated neighborhood. Rents, Values will change in a matter of one or two developments approved alone. I can refer you to some seasoned real estate professionals that you can work with to place offers and they can verify your prequalification. Otherwise, I would suggest attending more Philadelphia based real estate events in your future to determine your number's.

Regards,

Joe Scorese

Great post @Joseph Scorese

Real value in this post even for a Philadelphian like myself.

-Jonathan

@Joseph Scorese - Thanks Joseph! Really appreciate the insight. As I'm from out of state, I think it might be difficult for me to attend those meetings regularly and really have an ear to the ground on changes in zoning.

Do you know any turnkey providers in Philadelphia that I could reach out to for local expertise and property recommendations? Unfortunately, I am not in a position, from a capacity and experience perspective, to work on remodeling properties, etc.

Thank you!

Hi @Alex Schukin . here is one provider in the Philly market.

https://www.phillyhomeinvestor.com/

I currently don't have any personal experience dealing with these guys. I would also recommend linking up with some local real estate agents and giving them a call.

Thanks,
Neil

Hi @Alex Schukin,

Thank you for the follow up. I work with a Property Management company and sales group that could identity the turn key scenarios that fit your purchase power.

Please PM and we can exchange contact information to follow up.

Regards.

Joe Scorese

@Alex Schukin what's up Alex I am from NYC also looking to invest in Philadelphia. Let's connect. I'm going there this Friday to check out three SFR.

@Alex Schukin Hi Alex, my architecture firm works with Philadelphia investors who do rehabs and new builds. I think Philly is a city where you really need someone with feet on the ground. Your problem in finding comps probably comes from the fact that Philly is like a plaid skirt in terms of real estate values. You can be on a street that is all +$400k homes and one street over there are burned out shells selling for $20-40k.

Your best bet might be to reach out to some Philly investors and let them have a piece of the pie in exchange for helping you get what you want in an investment. 

Feel free to PM if you'd like some of my contacts. We have several Philly investors we do work for. I'm sure a few of them would love to partner with you.

Hi @Mike Lightcap,

How are you.

Please pm me with contact information and will forward to you.

Regards,

Joe Scorese

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