New Investor - Looking in the Philly Market

[Samantha Storz]

Hi BP Community!

I've been dreaming about investing in real estate for awhile now and I'm finally putting myself out there to the community in an effort to hold myself accountable & invest in at least one property this year! I'm from the Philly suburbs and definitely interested in tapping into Philly neighborhoods (thinking Brewerytown, Old Kensington) but as you know if you're from Philly, neighborhoods can be safe or not depending on what block you're on.

I've read a lot about BRRR and was thinking that would be the method I try out. Ideally, I'd love to partner with a private money lender on this. I'm so brand new here and it all feels a bit overwhelming but trying to take it step by step. My goal for 2024 is to purchase at least 1 property and go to at least 1 networking event a month or grab coffee/lunch with investors/agents/contractors in the area at least once a month to force myself into taking action.

Let me know if anyone has any advice for a newbie or if anyone in the Philly area wants to meet up for coffee and chat! :)

[Stuart Udis]

I would advise to do the exact opposite of what's being recommended. Particularly if this is your first real estate investment. If you have the credit worthiness and liquidity, use a traditional bank, not a hard money lender. Secondly, do not use credit card debt to cover the down payment. Have access to the credit card funds to assist with any contingencies but do not use it as your down payment. This is the playbook of the "gurus" who push these strategies because it captures an audience. However, all these "gurus" do is help their duped students buy lousy assets in zero barrier of entry neighborhood. Over leveraging yourself on your first investment seems like a bad strategy. As you become more experienced with a track record, using higher leverage makes more sense but not for the first investment.