Is Philly a Friendly Market for Remote Investors?

Question

I’ve spent years working with small landlords and investors in Philadelphia, helping them navigate everything from major rehabs to compliance headaches. One thing is clear: Philly has a lot of opportunity, but it’s not exactly “plug and play”. So can be challenging for newbies and remote folks to get started.

Here’s what I’ve seen trip up remote investors:

• Not knowing how to choose a contractor (by price, by Google review, by asking on FB . . .)
• Working with retail GCs who aren’t used to investment-grade renovations
• Struggling to identify the neighborhoods that are investment opportunities— not just “cheap”
• Not understanding the maze of compliance requirements

Not knowing how to choose a contractor (by price, by Google review, by asking on FB . . .)

Working with retail GCs who aren’t used to investment-grade renovations

Struggling to identify the neighborhoods that are investment opportunities— not just “cheap”

Not understanding the maze of compliance requirements

This is a market that peaks the interest of many investors, so how are you guys seeing remote investors create successful foundations in Philly?

How did you build your local team, find reliable team members (GCs, agents, property management...)

What would you do differently if starting over?

I am building tools for folks wanting to break into the Philly market remotely — so your insights are appreciated!

Stuart Udis · Answer

Not specific to Philadelphia, but Philadelphia happens to be a city where there's a lot of remote investor interest because of the entry price points of purchasing real estate. You are correct, permitting and licensing compliance is a major hurdle for most. As is finding quality construction talent. Unfortunately, if the remote investor says I want to be all-in on an investment for $100K which is where many fall, they can have the team handpicked for them, be taught licensing and permitting but it's still a losing proposition because it's a price point that requires hands on operations. There's simply no margin to do things correctly and rely on 3rd parties.

If someone wants to invest in Philadelphia remotely relying on 3rd parties to oversee the real estate and have sustained success, they must have capital to invest outside of the lowest barrier of entry real estate. I believe this is important for anyone interested in making an investment in Philadelphia to understand.

If someone wants to invest in Philadelphia remotely relying on 3rd parties to oversee the real estate and have sustained success, they must have capital to invest outside of the lowest barrier of entry real estate. I believe this is important for anyone interested in making an investment in Philadelphia to understand.

Drew Sygit · Answer

Investors across the country all make the same mistakes!

They don't properly research & align:

Neigborhood Class

Property Class

Tenant Class

PMC Class

Contractor Class

So, they often buy a Class C property, in a Class D Neighborhood, hire a Class B PMC to manage it, then have a Class A contractor do over-the-top renovations/repairs - and expect Class A results.

When the Class of all these moving parts don't properly align, it is often a disaster.

Alan Asriants · Answer

Agreed here! Location location location.

Lots of out of state investors get attracted to the lower price point but fail to realize it comes with a price! Educating clients about location, importance of class of RE and navigating them to avoid problematic properties is the best ways I have seen investors succeed.

I have heard countless of stories of those who bought pre pandemic/early pandemic and are getting swiped sideways. Had they had the right mentor/agent to guide them, they couldve been happy owning that real estate instead of dreading and trying to sell it in todays market.

Another slip up I see often are those who think they are buying a multi family but in reality it is a single family home. Or more common, they think they are buying a triplex but it is really a duplex. Knowing zoning nuances in Phila is important, and again having the RIGHT person by your side.

Denise Supplee · Answer

I’ve invested in Philly myself, and while the numbers can be compelling, this market is not “set it and forget it.” When I started, I handled everything myself, from tenant maintenance calls over small issues to navigating the city’s complex compliance requirements. Looking back, I can see how having a strong property manager who truly understands Philly would have been a game changer.

Philly has a lot of opportunity, but it’s a hands-on market. Without the right local team, it’s easy for things to snowball. That’s part of why I’ve shifted to investing passively now; I still love real estate, but I’d rather partner with operators who already have that local infrastructure in place.

Sheryl Sitman · Answer

@Alan Asriants  wise words and observations! Yes, these mistakes are made by newer investors all the time. You reminded me of a NY investor who once asked me to help him to hire a contractor for a tenant turnover. I asked him if he had a scope and he told me he would rely on the GC for that because he was too scared to visit his own property. New investors make mistakes that can cost them not just when they buy but can create an endless and bottomless pit. In this example, the contractor was simply instructed to "do the minimum".  It just does not work that way.

Alan Asriants · Answer

If you wouldn't live there, don't buy there!

Sheryl Sitman · Answer

@Drew Sygit perfectly put! I see this repeatedly in Philadelphia and sometimes the investment turns into a bottomless pit. Working with the right team is crucial.

Is Philly a Friendly Market for Remote Investors?

Most Popular Reply