NYC Investor Looking to Scale into Philly Small Multifamily

Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes

If you are undertaking value add, prioritize creating equity over chasing cash flow. Cash flow is important for sustainable operations, but equity is where meaningful wealth is created. When you become hyper focused on achieving a specific cap rate, especially while excluding management costs and other responsibilities you may be assuming personally, the cap rate becomes a misleading metric. It can create a false sense of performance that does not reflect the true economics of the deal.

While I fully endorse investing in Philadelphia, I would encourage gaining a deeper familiarity with the city and its neighborhoods. Your expectations in areas such as University City, Manayunk, and Roxborough do not align with market realities.

Another point that stood out is the strategy of adding a bedroom. Using a 1 bedroom to 2 bedroom conversion for the sake of this point, the assumption that converting a unit into a two bedroom will automatically increase profitability is a common misconception that trips up many investors. While a two bedroom typically commands higher rent than a one bedroom, the more important question is what functional compromises are required to create that second bedroom.

In many cases you can achieve a higher rent with the 2 bedroom, but a well designed one bedroom with strong flow, natural light, and usable living space may outperform a poorly configured two bedroom over time. When you factor in vacancy loss, turnover, and tenant satisfaction, the highly desirable one bedroom may ultimately generate more total revenue than a higher priced but less functional two bedroom that experiences greater vacancy.

This is not to say units should never be reconfigured. Some layouts absolutely benefit from optimization into two bedrooms. But just because a unit can become a two bedroom does not mean it should.

Today everyone wants to scale, grow or whatever terminology they want to use. This pushes investors to make decisions that are influenced by the transactional nature of the business. Money has to be turned over because too much leverage is used or investor capital needs to be returned. Very few are making sound real estate decisions, particularly with a long horizon outlook. Since you have your own capital, this is where you can excel. You may not get the rate of return you are seeking in the early years. In fact, your properties may underperform but taken over an extended period of time you can design more durable properties and units that will be in high demand. That's the winning recipe.

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3 Reply

Account Closed

Member since 2026 · 35 posts · 3 votes

7mo

Hey Charlie,

Love how clearly you’ve defined your buy box and income targets — that level of specificity is a big advantage when you’re going into a new market like Philly.

I'm a mortgage broker who works with a network of private and non‑QM lenders that are active in Pennsylvania, and a lot of what you described (3–4 unit value‑add, add‑a‑bedroom, utility separation, refinance in 2–3 years) is exactly the kind of business‑plan‑driven financing they like to support. I'm happy to be a resource on the financing side as you underwrite deals and think through different paths to that 8–9% cap / 15%+ CoC target.

If you'd like, I can help you pressure‑test a couple of sample scenarios (purchase price, rehab, projected rents, refi assumptions, DSCR, etc.) so you can see where leverage and rates tend to land in today's market and how that lines up with your $10k/month goal. That way, when you're talking with agents, PMs, or contractors in West Philly / Temple‑adjacent / Kingsessing / Manayunk / Roxborough, you'll already know what a "financeable" deal looks like for your profile.

Feel free to DM me here on BP and we can dig into a specific property or a hypothetical deal structure. Happy to compare notes with you and support what you’re building long‑term.

0 Reply

Arman AhmedPro Member

Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 968 votes

7mo

Quote from @Charles Lundquist:

Hey BP community,

I’m a NYC-based investor (currently own in the Bronx) looking to expand into Philadelphia for stronger cash flow and long-term scaling.

My goal is to build to ~$10k/month in net cash flow over the next 5–7 years by acquiring 3–4 unit properties with value-add potential and refinancing within 2–3 years.

I’m not looking for turnkey retail deals — I’m specifically targeting repositioning opportunities.

What I’m Looking For:
• 3–4 unit properties (triplex or quad preferred)
• $400k–$575k purchase range
• Target 8–9% true cap rate
• 15%+ cash-on-cash return
• $1,400+ net monthly cash flow after stabilization

Value-Add Focus:
• Add a bedroom to increase rents
• Separate utilities (gas/electric)
• Reduce landlord-paid heat
• Finish or legalize usable basement space
• Raise under-market rents
• Minor cosmetic upgrades (not full gut rehab)

I’m willing to self-manage initially to improve yield and learn the submarkets properly.

I’m currently evaluating:
• West Philly (near universities/medical)
• Select Temple-adjacent blocks
• Kingsessing / Southwest
• Manayunk / Roxborough (if numbers justify)

Would love to connect with:
• Local Philly investors actively doing small multi value-add
• Contractors experienced in bedroom conversions / meter separation
• Property managers with strong eviction handling process
• Anyone who has successfully scaled 3–4 units in Philly

I’m serious, capital ready, and looking to build relationships long-term — not just close one deal.

Happy to DM and exchange numbers.

Appreciate any insights from operators on the ground.

Charlie

DM me for my number let's connect.

If you’re open to markets beyond Philly, you might want to give the Midwest a hard look, where your exact play (3–4 units, value-add, 8–9% caps, $1,400+ net) is still very achievable without fighting the same competition or regulatory headaches. A lot of out-of-state investors I work with come from NYC for that reason. The value-add angles you listed, adding bedrooms, separating utilities, and bumping under-market rents, are common here and typically inexpensive to execute with the right team. If you’re serious about scaling to $10k/month, the Midwest can help you get there faster with less capital per door. Happy to share real numbers, neighborhoods to target/avoid, and connect you with contractors, lenders, and PMs who specialize in small multis.

[email protected]614-418-6081

0 Reply

Vijay FriedmanBusiness Member

Miami, FL · Member since 2026 · 766 posts · 124 votes

5mo