Lehigh valley advice
Hi team, I'm looking to add a 3rd property to my portfolio this year and identified the Lehigh Valley as a good location to expand to. I'm currently house hacking in Weehawken, NJ (Working in NYC) and looking for a small Multifamily(~200k) buy and hold rental next. Lehigh Valley seems attractive due to Price to Rent ratios, significantly lower taxes than NY/NJ, geographic proximity to NYC/Philly, jobs in area (Amazon warehouses, fedex etc). Have also read good things about the downtowns of the likes of Bethlehem, but its difficult to narrow down neighborhoods without knowing the area too well. Looking for recommendations on neighborhoods to dive deeper into within the area in that price range, as well as connections and general advise from those who have invested in the area. Would appreciate any help!
Hi Lloyd. I own four single family rentals in the Lehigh Valley and have lived here for the last 3-4 years. I am happy to give you some more context if you’d like. You are right that it is an attractive place to invest.
Also I ought to mention - I have a single family home in Southside bethlehem that I’ll soon be looking for a a buyer for. Message me if you’re interested. It is currently a registered rental unit - student housing for Lehigh students.
south Bethlehem has the lowest prices, student housing areas near Lehigh University are good but houses are more expensive but you are getting higher rents. Be careful if you take a wrong turn in the ss houses can be pretty rough but with that said I have an SFH in the ss that isn't a student rental and so far so good, North Bethlehem is a little bit nicer and west Bethlehem is quieter but better than the ss
The hardest thing you will find investing in the valley right now is everyone for the most part is looking for exactly what you described. So there is a lot of competition for things that show up on the market. your best bet may be to network some more, maybe join some local REI groups in order to try to find something off-market. I've put offers in on at least 5 small multis around that price point in the past month and have lost every time to cash buyers who never even saw the property and way overpaid. If you have cash, you might have better luck. I have started seeing some foreclosures come on market around too, so something to keep an eye on.
@Charlie Cooper Thanks for the advice, will have to keep a close eye on that then, out of interest are you bidding with conventional financial and standard terms? (45 day close, inspection/appraisal/financing contingency etc) Also what neighbourhoods are you looking at that are that competitive?
@Emma Fitzgibbon Thanks for your input, I've read that about South bethlehem but from monitoring Zillow/Realtor etc that seems to be where inventory pops up. Do you think north/west or even downtown Bethlehem would be out of the 200k price range for a multifmaily?
@Kathleen Messing Oh interesting, what made you go SFH over MFH? Yes sure would be happy to look at it and run the numbers if you want to DM those over!
You might be able to get a duplex for less than 250 if you go quick! Lots of maintenance in these buildings too all built like 100 years ago
@Lloyd Preece I have been offering with conventional financing, waiving all contingencies (no inspection etc). I have bid on properties in Allentown, Bethlehem, Jim Thorpe (little north of valley), Whitehall. They are all this competitive due to so many folks either wanting to move into the area and/or just lack of inventory of smaller multis. Not sure about downtown Allentown as much, as it's an area I try to avoid, there have been properties there but I don't have any inside knowledge since I haven't bid on any.
To provide an update here, the market is very hot. I've put in offers over the last 6 months between $130k-200K for MFs and SFs mainly in Bethlehem but also in Allentown. Usually at around asking price. There is plenty of cashflowing opportunities out there at around 7% cap rates and most MF inventory at that price point is in Allentown. I've offered on over 10 properties so far and been outbid every time unfortunately. Patience is key with this market and you may need to go over asking to secure an MLS deal.
Thankfully I have a fantastic investor friendly agent in Ronald Bowser https://www.biggerpockets.com/..., who provides timely and very detailed feedback on properties I enquire about. V good finger on the pulse on investment properties in the LV and has a few rentals himself. He makes it very easy for out of state investors and critically, will also turn me off properties where he doesn't believe there is good value or investor potential which is also incredibly important for long distance investors. Would recommend him to anyone looking for Buy and Hold in the area.
@Lloyd Preece
Can second the kudos to Ron Bowser
I am also currently looking for a property here in Lehigh Valley (BRRR or multi-unit with good cash flow)
@Lloyd Preece any luck so far? If so, any tips?
@Charlie Cooper do you have any recommendations for off market deals? Finding everything hitting the MLS is overpriced. I put in a few offers in the past few months and got out bid each time. Also, do you have any recommendations for local REI groups here for networking?
Sorry i forgot to circle back on this. Yes i closed on a SFR in Bethlehem in February, cash flows pretty nicely but its an older house like most in the area so will likely come with some expenses as i continue ownership
Tips work would be:
- Bethlehem inventory is few and far between, you have to be quick. If you want more choice then look to Allentown if youre willing to go there. My initial price point of <$200K wont get you MF in Bethlehem unless v run down, you will find 2 units in Allentown for that price though or SFH in Bethlehem.
- Cash flow is better in South Bethlehem than North, but North is nicer (pretty standard practise)
- My agent was great and v diligent, would highly rec and ill use him again
- I went with Cassidon as my PM, would also highly rec them
- Unit was filled around 1 month following closing, but i was advertising in Feb/March. Ended up with a handful of applications.
Quote from @Charlie Cooper:Hey Charlie, I've been wanting to get involved with local REI groups in the area and was wondering if you could recommend any in particular to check out. Thanks.
The hardest thing you will find investing in the valley right now is everyone for the most part is looking for exactly what you described. So there is a lot of competition for things that show up on the market. your best bet may be to network some more, maybe join some local REI groups in order to try to find something off-market. I've put offers in on at least 5 small multis around that price point in the past month and have lost every time to cash buyers who never even saw the property and way overpaid. If you have cash, you might have better luck. I have started seeing some foreclosures come on market around too, so something to keep an eye on.
@Tayyab Chaudhry have you had any luck? I am currently seeking my first property around the Allentown/Bethlehem area and have found some that caught my eye but at these prices, I feel like I may just wait it out a few months with the Fed announcing the next rate hike. I know the time in market beats timing market but these sellers still aren't budging. Even if they've been sitting for months.
Prices are a bit inflated.
@Kathleen Messing
Hi Kathleen my wife and I are new to the BP family as well as to world of real estate investing. We are focusing in on the Lehigh valley area ( Bethlehem, Easton and Allentown areas) and I saw your past post on the area. We are looking for a sfh to hold and would
Like something turn key first or minor cosmetic work as a start. We currently live in NJ. and any info on areas to look or avoid would be appreciated.
Thank you for your time
Bob S.
@Robert Sprague
Hey Bob,
I can speak for Allentown the West-end is the most desirable place in Allentown. If I were to avoid any areas, I'd say stay away from Center City.
Center City being East of 10th St, West of 1st st, South of Tilghman Street and North of Hamilton. Hope this helps!
@David Garcia
Thanks for the advice.
@Justin Dziedzic sorry I somehow missed your post! So far I still have not been able to secure a property. I am finding that the sellers are budging at all. The price is overinflated and they don't want to fix anything on the inspection and most of the ones that sold ended up being all-cash buyers. Hoping things start to settle down in the next while so an opportunity comes up. Have you had any luck?
@Tayyab Chaudhry Same boat here haha. No one seems willing to budge and I'm not really wanting to up my budget on some of these due to cash flow. Looks like I'll just sit tight...may look at partnering up on a multi-unit or something to be able to leverage more cash but we'll see!
Quote from @Tayyab Chaudhry:
@Justin Dziedzic sorry I somehow missed your post! So far I still have not been able to secure a property. I am finding that the sellers are budging at all. The price is overinflated and they don't want to fix anything on the inspection and most of the ones that sold ended up being all-cash buyers. Hoping things start to settle down in the next while so an opportunity comes up. Have you had any luck?
prices are still a bit high. everyone thinks they have gold.
Quote from @Tayyab Chaudhry:
I am also currently looking for a property here in Lehigh Valley (BRRR or multi-unit with good cash flow)
@Lloyd Preece any luck so far? If so, any tips?
@Charlie Cooper do you have any recommendations for off market deals? Finding everything hitting the MLS is overpriced. I put in a few offers in the past few months and got out bid each time. Also, do you have any recommendations for local REI groups here for networking?
Im in the market again, definitely noticing DoM are increasing and sellers dont seem to be getting the crazy multi-offers they did 6-18 months ago. last year every property went to highest and best, not really seeing that anymore. 20% conventional buy and hold Single Family isn't cashflowing much at these rates really, a few break even but its not like it was when rates were 3%. However its less competitive, so "date the rate, marry the price" and you could find something decent at a better price point that is refinanceable later. If youre looking for good cashflow straight out the gates and not doing a full project/brrrr/str/other creative strategies then perhaps look elsewhere.
@Lloyd Preece
Hey Lloyd,
I am local investor in the Lehigh Valley and I can help you get connected with local contractors, mortgage brokers, etc, let me know if you need any of these services and I can help you get connected.
@Kathleen Messing hey!!! I’m also a small investor in bethlehem. We have one in SouthSide bethlehem as well and one in the township. And our primary is in Northampton, anyways I’m interested in your property and if you already sold it would love some insights into how to get registered for Lehigh student rentals and if you’d recommend it. Thanks! Looking fwd to connecting.
Hi nick. Sold that one I had mentioned. They have fresh local legislation for a student housing overlay district so now ONLY properties that are in that tiny zone can become student rentals. A few registered rental units outside the zone got grandfathered in. That overlay district is dominated by a few big players and isn’t worth the bureaucracy. Look elsewhere in the Lehigh valley, in my opinion.
Hey @Lloyd Preece I have a team of agents in the LV area that specifically help search for properties for investors.
Let's connect if you are interested.
