New York City, NY · Member since 2015 · 38 posts · 14 votes
Hi guys,
Hope everyone is staying safe and warm.
What are your thoughts on the BRRRR strategy near the Philadelphia area or suburbs?
Been thinking about taking a mini-road trip to PA to check out some distressed properties over the next few weekends after browsing through properties listed in NJ, NY, and CT and coming to the conclusion that the numbers don't make as much sense for investing up in these regions (either the property taxes are too high or the rent-to-price ratios are too low).
What would be a reasonable price range to target? Anyone have success investing in this market?
Rental Property Investor · Mountain View, CA · Member since 2017 · 83 posts · 59 votes
5y
I am a CA resident who invests almost exclusively this point in Philadelphia. I'd be happy to discuss my experience with you at some point (DM me).
I look for buy and holds out there, so typically am looking for something all in around 120-150k for SFH, 200-250k for duplex/triplex.
You can definitely hit the 1% rule if you buy correctly. Rents are pretty great in that market, although the political environment is very tenant friendly at this point (like most of the country, but even more so there). It is also an extremely competitive market right now, so be prepared for a fight to find good deals!
Contractor · Chadds Ford, PA · Member since 2015 · 567 posts · 460 votes
5y
@Eli B. this one is pretty played out but 1000+Sqft houses with 2 bedrooms can often be reconfigured to include 3 bedrooms, increasing value and rent. In the city that generally means a gut and rebuild.
Building new is sometimes an option since fewer investors are willing to do that large a project.
I’m sure there are opportunities in Squatter properties, though there is a lot of risk there. Consult a good lawyer before going there and have plenty of reserves.
Foundation issues can be good too, but this takes a lot of experience, or a foundation contractor with a lot of experience. Or, combine this with the new construction and be prepared to level the building and rebuild.
Basically, the opportunities right now lie in the junk nobody else wants to touch for one reason or another. None of those things I mentioned above are particularly scary if you learn enough about it and get a good enough deal because of it, but do 10x the homework on it, because they all have major risks.
Rental Property Investor · Philadelphia, PA · Member since 2015 · 479 posts · 362 votes
5y
At the moment, finding good BRRRR has been challenging in Philly but I would expect that the inventory situation will be changing at some point in 2021. With that said, you really really want to either get educated on the market -- the neighborhoods, the various laws (lots more regulations to follow than say a typical Southern State market) and the numbers OR work with someone who can guide you (and later help you, if need be, with rehab, vendors and getting your rental working). In addition, define what it is you are looking for - we have it all in the region. Figure out your risk tolerance, budget, product you are targeting... And keep the surrounding areas in mind as well. Given current climate and economic pressures consider that it is and will be lower income families that will be hit hardest. Good luck!
Lender · PA · Member since 2019 · 535 posts · 461 votes
5y
Good Morning Chiwei I hope you have already acquired your first Philly property if you have not I have some suggestions. First, do not limit your search to Philadelphia County. Delaware, Montgomery and Bucks Counties expand your opportunities. Second search the popular social sites for pages which wholesalers or owners are advertising their opportunities. Such as: Pa Off market Properties or soothing like that. This will give you a chance to purchase properties which never make the MLS. Good Luck!