I potentially have the opportunity to purchase a turnkey rental property in Philadelphia. The major cross streets are 54th and Girard. It's a fully-renovated duplex with monthly rent of $1,350, NOI of $955, and a purchase price of $107,000. I've not submitted any earnest money or anything yet. It's just a property they have available so I'm just doing my own research to see if it might be a good buy.
I've read numerous posts on this forum as well as other articles touting the "up and coming" status of Phily, but I'm concerned about crime and some of the neighborhoods. I'm most interested in hearing people's opinions who know this particular area. Would this be a potentially interesting deal to you given the area? Thanks in advance for the feedback!
That is a rough area. I'm not an expert in that neighborhood, but that would be a cash flow play - not appreciation.
Since I don't do the low-income thing I would not buy there, but hey people make money at it.
I just took 3 minutes to look up that corner in a trulia crime map and here was the most recent incident:
"Shooting/Stabbing. PD o/s of a shooting. 1 male shot & being taken to Presbyterian by PD. No suspect info."
With that being said, there is no way I would ever purchase a turnkey there. Im curious why would you want to purchase a turnkey in a high crime area when there are so many other places that dont have a high crime rate? What is it about philly that is making you look there for turnkeys?
As a turnkey purchaser myself, this is one of my strict criteria. No high crime neighborhoods.
Thanks for the feedback, guys.
I never said I definitely wanted to purchase it, but I figured if it was on the border of a decent area it may be a possibility. From what you guys have told me, I'll definitely pass on it now. Even thought I wouldn't be living there, I don't want anything in high crime areas for obvious reasons. But Alexander, I'm curious as to what turnkey providers you've used? Maybe you can pm me with some more info.
I have looked at that same property. The numbers look good but the trulia crime map is frightening. The shooting stabbing is several blocks over, but there are tons of burglary, robbery and firearm charges filed in that area over the past month.
@Andrew Ramirez Perhaps a property like that would be better for a local to deal with. From what I have read on TKs it is better to get something in a B class hood to minimize costly issues normally associated with lower class properties. Getting a low end hood multi from 3k miles away is a known recipe for a disaster. Maybe not immediately but eventually those can be wallet bitting and rarely wise investments.
For turnkey think nicer and newer. Imagine getting something like the one across the street from you. Clean, newer, nice hood and schools types will offer real returns vs some old POS duplex in a torn up part of town with no post card envy.
If you are up for investing 3000 miles away you are passing over a bunch of good real estate closer. The least you can do is make it worth it. Good luck with your search!
@Andrew Ramirez Philly has a lot of great opportunities other than that. Good Luck!
I would not buy any street higher than 45th
Thanks again everybody. The only reason I'm looking for turnkey out-of-state is because nothing in OC really makes sense for cash flow. I've done quite a bit of research on the pro's and con's of turnkeys and if a good deal comes along, I'm willing to jump on it but it has to make a lot of sense. If I could invest in my own backyard I would, but the returns and rent/cost ratios don't make sense.
Hello @Andrew Ramirez ,
As a Philadelphia native I am compelled to jump in here to give you some points to consider while conducting your research in Philadelphia RE investing. These same points of consideration would apply in any state and in any neighborhood.
1. Do not and I mean do not use Trulia or any other RE site to make a determination on the crime statistics in a particular city or neighborhood. These RE sites do not use the most up to date information and often times are wrong. Instead us the city's police department crime maps and stats. Here is the link for Philly.
2. When you ask for advice from members who live and/or are familiar with an area or city, proceed with caution when you receive advice from people who live outside of the area and do not indicate that they have any intimate knowledge of the place in question. How could they know that the information they are giving is accurate or pertinent. Philadelphia is a very completed city with respect to areas. It is a city of neighborhoods with usually different names. Also, the make up of the homes and people can change from one block to the next in the same neighborhood. A web search will not tell you what you need to know about Philly neighborhoods. You need to come here in person and tour the city.
3. I not sure what @Matt R. meant by "lower class" and "low end hood". I hope he meant that there are low income folks out there who are decent and hardworking and may be caught in a financial situation that keeps them in a lower economic view. I am a landlord and I can tell you that sometimes these tenants will take care of your place better than a tenant in a high end area. It is not always about just the neighborhoods...sometimes you have to consider human behavior. The link below will allow you to get specific information about a neighborhood (i.e., population growth, median household income, average rents, etc). This will give you an idea of the type of people who would possibly rent in the area of subject.
4. This property is in the Carroll Park (zip code of 19131) neighborhood. This area is a few miles West of the Please Touch Museum, Mann Music Center, and Philadelphia Zoo. As @Max T. stated , this is a rough neighborhood and not much development is taking place here. This is certainly one of the poorer neighborhoods in the city...the time may not be right to buy here. However, I do believe this will change because of its proximity to venues mentioned above that attract many visitors to the area and ease of public transportation to the city center. There is a plan for every neighborhood in Philadelphia (see link below). Take some time and do so deep research, talk to people who live/work/play in the city.
I will be more than happy to be a resource for you. I was born and raised in Philly. I have worked, lived, played, and invested in just about every area in the city. I will give you the good, bad, and ugly to allow you to make informed decisions. May best advice, make sound and informed decisions.
@Paulette Midgette is the winner!
@Paulette Midgette For sure I agree. I was referring to class of propeties and hoods A-F. Great tenants exist at all levels. Locals can navigate the C-Fs inventory much better than out of staters. I can almost guarantee the OP has never experienced anything close to the property in question. To call that Turnkey for new investors is nearly a crime in itself. As you noted I am sure there is something more appropriate you can locate for him or for the next remote investor. Thanks!
Hey @Andrew Ramirez. I'm nowhere near an expert on investing as a matter of fact I'll be closing on my first flip in 2 weeks. One thing I am familiar with is Philly. I see you received a lot of good feedback on your question. @paulette midgette hit it right on the nose. I personally can't speak on other cities but Philly has areas that have crime and very valuable real estate at the same time. The house that I am currently flipping is in a high crime area in a black neighborhood and was purchased by a young white couple after four days on the market for asking price. Also white families are moving in the neighborhood everyday. I say this because it's about the value of the property here in Philly. So if the numbers make sense,go for it.
is a great source of info.
On crime, these stats don't work well in block by block cities like Philly or Chicago. It is true that it will show you that you are not in Kansas anymore (picket line fence suburbia which this is def not in) but unlike say Cali where a mile can be a valid reference point because you are in a driving city, in a walking city like those mentioned a few blocks can be the difference between a war zone and a decent cash flow zone with C rentals that are definitely not easy but are not war zone properties either.
I also did not know the stats were not up to date so thank you Paulette for pointing that out.
Thanks @Matt R. for the confirmation...I was sure that is the way you were headed.
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