Philly Market High Level

[Jason Forman]

I started investing at the beginning of 2021. I've done a few deals but feel like i'm missing opportunities because there is still a lot I don't understand. It's easy to see what investors are paying for properties but I need a better fine tuned formula for the Philly market. Are people using 70% ARV minus repairs here or is it very neighborhood specific? Also, I know philly is street by street so I use a .1 mile radius. Is that to conservative? Lastly I use 100-110 a square foot for repairs for full guts in a lot of neighborhoods but i'm doing a gut in port richmond that is much less than that.

[Dan Powers]

@Jason Forman Congrats on getting in the market it's a fun world to get into. Right now the MLS is averaging 80-85% of ARV, while most off-market inventory is hovering around 72-78%. 70% is a great benchmark to shoot for but in this market finding plentiful inventory at that margin is an unrealistic expectation. Philly is a very block-by-block city so sticking to 0.1 miles for comps is a good rule to stick to, but it's not unreasonable to use 0.15 as well. For repairs, it's very dependant on the neighborhood as well as if you're using the property as a flip or a rental. A full gut in Port Richmond or West Philly is not going to cost the same as a full gut in South Philly even with an identical sqft. house, and a rental rehab will cost significantly less than a flip rehab.