Hi everyone, I'm moving to the east coast soon. I'm looking at 2 markets right now for BUY - FIX - HOLD. The pros at these markets are the housing price is very affordable and job growth is +. However, there are many cons which make me concerned:

Philadelphia, PA: population growth rate is slowing down, high crime rates, low median household income, etc.

Baltimore, MD: the population is decreasing fast, high crime rates, negative home appreciation the last 10 years, etc.

I have a saving about 100K - 150K to invest. My strategies will be buying 2 properties under 50K each, rehab, rent out, and refinance. My questions are:

1) Is it possible to get B-class properties in these areas with the money I have right now? How? Can anyone recommend any zip codes?

2) Should I still step into these markets? Any other pros and cons I did not see yet?

3) I would love to connect with investors, realtors, wholesalers, contractors, lenders in these markets. Let's hang out and learn from each other.

4) Which other markets on the east coast I should take a look beside these 2? Why?

Thank you so much!

yes you can find class B , but it cost more . If you are looking around Baltimore , I would tell you to look at Balto county , Anne arundel county  . 

Don’t know about Baltimore but your making some broad generalizations about philly that are not necessarily accurate. Real estate is local. I suggest you get boots on the ground and check out areas of the city for yourself and see if the opportunities meet your interests.

some interesting reading on Phila ......  

https://www.bls.gov/regions/mid-atlantic/news-rele...

https://philly.curbed.com/philadelphia-market-repo...

Philly has many interesting neighborhoods, great eats from cheap to expensive, culture, history, parks, etc.  worth checking out IMHO...but then I'm extremely biased :)

I keep hearing people talk about "peaks" and "rapid growth" or "hot markets" in other places, but Baltimore/Maryland have seen steady (like 5%) growth since the crash. Nothing crazy. So we are not overheated in my opinion. Tons of active investors and flippers though.

And I don't see the loss of population you are talking about. MAYBE in the city itself, but not the State. Baltimore County is struggling to find room for people and the builders don't want to take the risk to build enough, at least from what I've heard recently. Besides, we have Washington nearby, with huge prices. People live here and work there.

Originally posted by @Vee Vu :

Hi everyone, I'm moving to the east coast soon. I'm looking at 2 markets right now for BUY - FIX - HOLD. The pros at these markets are the housing price is very affordable and job growth is +. However, there are many cons which make me concerned:

Philadelphia, PA: population growth rate is slowing down, high crime rates, low median household income, etc.

Baltimore, MD: the population is decreasing fast, high crime rates, negative home appreciation the last 10 years, etc.

I have a saving about 100K - 150K to invest. My strategies will be buying 2 properties under 50K each, rehab, rent out, and refinance. My questions are:

1) Is it possible to get B-class properties in these areas with the money I have right now? How? Can anyone recommend any zip codes?

2) Should I still step into these markets? Any other pros and cons I did not see yet?

3) I would love to connect with investors, realtors, wholesalers, contractors, lenders in these markets. Let's hang out and learn from each other.

4) Which other markets on the east coast I should take a look beside these 2? Why?

Thank you so much!

 You cannot really find anything in B Class neighborhoods in Baltimore for 50K. Market is higher and competition is up. 50K doesn't get you further, unless you get a full renovation project.

I had considered Philadelphia at one point but became a little discouraged because of those same sentiments. I looked in my hometown and I soon realized there is a strong rental market here. The Allentown, Bethlehem and Easton, Pennsylvania rental market is quite competitive but affordable. You can get MF for less than 100K. You can get SF for less than 50K. Because of the Neighborhood Improvement Zone or NIZ in Allentown there is economic development going on in the downtown area. The Sands Bethlehem Casino is bringing major revenue to the Lehigh County where some residents property tax have actually lowered. The I-78 connects the 3 towns and brings easy access to New Jersey and NYC. 

I have been doing research in Baltimore and have one rental there so I can only speak about that. 

Even though it is possible to get properties under 50k they are in areas that don't attract a lot of high quality tenants. 

You should definitely consider finding a good partner that has a lot of experience in the different neighborhoods there. I've found some to be attractive in terms of the numbers but the feedback from others is that the quality of tenants have been a headache. 

From what I've seen so far the good neighborhoods that make sense would range anywhere from $100k - $300k

1/2) as already said it really depends on the specific neighborhoods.

3.) Come to our Meet up on Thursday and check out Downtown Allentown PA!

4.) As Brian mentioned the Allentown/Bethlehem/Easton market or Lehigh Valley as is locals call it is a great place to invest. Their are a few key developers that are building high rises and bringing in tons of long term lease businesses that are creating demand for higher class rentals for the new growth in the population of working professionals. Properties are still affordable with potential for good appreciation all the while cash flowing great!

PS. Welcome to the East Coast!

Do you actually live in, or plan to visit the area?

Out of state investing is difficult in Philadelphia as it is very block by block.

@Matthew Paul @Sung Park @Susan C. Thank you for all the suggestions. I will do more research with these directions.  

@Shawn Clark thanks for mentioning a great point, people work in Washington and live in Baltimore. 

In your opinion, you think of any reasons that make the builders not want to take the risk to build enough/more?  And yes, the loss of population is just in the Baltimore County. 

Do you have any zip codes recommendation for C+ or B-, B class?

@Ozzy Sirimsi Could you please explain more about a full renovation project? You mean buying a very distressed house? Do you know the cost per sqft for these type of project? 

How much is average to get a distressed property in B class in your opinion? Let's say SF - 4 doors - 2 baths or Duplex - 4 doors - 2 baths?

@Brian Adzadi @Justin Brown  Allentown/Bethlehem/Easton market or Lehigh Valley sound very potential. I will do more research on these areas. Thank you!

Which industries dominate these areas?

@Nicholas Scatton I actually will move to the east coast. My plan is moving to the market I want to invest to get to know the market in real life, then start investing. 

Hey @Vee Vu what do you mean by dominate? Like who are the bigger employers? Culture of the area? We have a huge health care population here as well as a few anchor fortune 500 companies. The low taxes compared to NJ brings a lot of folks that commute to their jobs in NJ and NY but live in the suburbs around here. Also both Allentown and Bethlehem have a lot of great history. 

$50K won't get you a rental in a B class neighborhood in Philly, not all for $50K.  that may be your purchase price and it needs $20K renovation but it still won't be in a B class section of the city. I definitely agree with Sung Park on this. Philly has a price variance on a block by block basis. there are $30K row houses and $700K row houses.  More research is needed if you really want to invest here. 

You might do better investing in the much more affordable city of Pittsburgh, Pa. cheaper cost of living, cheaper housing, roomy housing...research that market.   

Kudos,

Mary

Originally posted by @Vee Vu :

@Shawn Clark thanks for mentioning a great point, people work in Washington and live in Baltimore. 

In your opinion, you think of any reasons that make the builders not want to take the risk to build enough/more?  And yes, the loss of population is just in the Baltimore County. 

Do you have any zip codes recommendation for C+ or B-, B class?

 From what I've heard, builders are still scared from the 2008 collapse.

No, I don't think I have any zip codes for you. Sorry.

To add to @Shawn Clark point... there’s supposed to be a high speed DC-Baltimore train coming (who knows when) that’ll take you from city to city in 15 minutes: https://www.google.com/amp/s/dc.curbed.com/platform/amp/2017/10/16/16482438/dc-baltimore-bullet-train-shinkansen

I️ have a rental in Baltimore that I’ve seen great cash flow with and I’m looking for more. But yes, they’re around the 100-300k range. I️ have experience with southern Baltimore city (federal hill, riverside, pigtown, Ridgely’s, etc) if you’re interested in knowing more.

Answers in order:

1. Yes, with financing, im sure they can. 

2. Thats for you to answer,  but yes relative to just your concerns mentioned if thats it. 

3. Tons of them. Experience will teach you these

4. Pass, but if you want you can pay me something and i will teach you anything you want to know that i know about renting in baltimore, which is extensive. I own and manage a large rental portfolio and have for nearly a decade.  

P.s. Cool name. 

@seth S. 

is Baltimore the only city in your portfolio?  RE taxes are so high. lead inspections with every new lease, etc...doesn't it drive you crazy?

this area is worth a look...

https://spiritnews.org/articles/bullock-fairmount-...

 Brewery Town's "West Girard Ave" is sketchy BUT the millennials are checking out the area bars...and some are living there.....I think it's a C moving to a B...

why?  Fairmount is below it and has been super strong for years...Fairmount CDC is very active which is a + for Brewerytown....Francisville is to the east maybe a touch southeast of West Girard and some millennials have taken a bet on living in Francisville.....both areas I would say are C maybe moving to B...for this with patience....if you are thinking about Section 8 this is probably a great area for you

@Susan C. - good analysis there of that Philadelphia area, I agree with it; but getting property there at the price posted in the OP is unlikely.

Originally posted by @Vee Vu :

@Ozzy Sirimsi Could you please explain more about a full renovation project? You mean buying a very distressed house? Do you know the cost per sqft for these type of project? 

How much is average to get a distressed property in B class in your opinion? Let's say SF - 4 doors - 2 baths or Duplex - 4 doors - 2 baths?

 Full renovation is like doing a gut job, or updating everything like electric, plumbing, HVAC, kitchen, bathroom etc... 

For a B class neighborhood you will be looking at a 120K+ plus cosmetic updates. C class neighborhoods with decent lower income families, you will spend 70k+ plus cosmetic updates. 

Prices are up since last year, so it is not easy to find a 50K house in a okay neighborhood these days.