Buying new construction with tax abatement before it hits market

8 Replies

I met with a realtor that showed me 6 houses around North Philly, North of Girard, that were all under construction and not yet listed on the market. They are new construction/ intense rehab gut properties that will qualify with the tax abatement. I am not sure what to do. One one hand, these properties seem too high with the new construction premium. On the other hand, Numbers might work with tax abatement. The realtor focuses on selling new properties or rehabs in the area of brewery town. I don't know if I should take the risk of buying there banking on the notion that the property will appreciate in years to come. South of Girard though, property value has skyrocketed. just not that much gentrification North of Girard.

This would be for Primary residence. Mainly Single family but with multiple rooms so 3 Beds 3 bath or 2 beds 2 bath. (I would live in one room) I'm looking North of Girard, 31st street in brewery town. around the Aldi's. Not going to give addresses but properties around that area. Again, deciding between new Construction, higher price but numbers would work with tax abatement and I could charge a premium for Rent. OR buy a lower value house, add some Sweat equity, and rent out at a lower price. I could afford either. 

Originally posted by @Willy Marello :

This would be for Primary residence. Mainly Single family but with multiple rooms so 3 Beds 3 bath or 2 beds 2 bath. (I would live in one room) I'm looking North of Girard, 31st street in brewery town. around the Aldi's. Not going to give addresses but properties around that area. Again, deciding between new Construction, higher price but numbers would work with tax abatement and I could charge a premium for Rent. OR buy a lower value house, add some Sweat equity, and rent out at a lower price. I could afford either. 

 Thanks for the mention @Mayer M. . This really comes down to your preferences, time you have available (are you already working 80 hours a week or do you have time to work on a project here and there?) and skills/tolerance/excitement for a live-in rehab. I’ve done 30+ projects in Brewerytown and have lived here for 8 or so years. I’m a full time investor and a licensed GC. Let’s get coffee and chat. Happy to help you figure out the area and what may be the best fit for you. I’ve done live in rehabs so can give you some thoughts on that too. 

@Willy Marello How far north of Girard are you looking? Depending on what side of broad and how far away you are can greatly influence the property values.Take @Troy S. on his offer- he's super active on these forums/Philly market and all of the posts that I have followed hit the nail on the head.

Tony and Jimmy, thanks for the response, Ill contact tony to sit down with him later. I am working 40 hours at a full time but am very handy with house work and rehabs. It would be in Brewery town. 

thanks,

Will 

@Willy Marello The general rule of thumb is to never buy based on appreciation that you can't directly control through rehabbing or increasing rents. Just make sure that the numbers work with today's value and you should be fine. Brewerytown is a good area. Like others have said, you should get with somebody and give them the address or at least an intersection to determine if it's ACTUALLY Brewerytown. Lots of investors will try to say a property is in a certain neighborhood when it's really not, which can have a major effect of value

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