Just starting out. How to find a deal?

Question

Hi all, I have enough cash set aside to put 25% down on a SFH or ideally a multifamily property (50k). I live outside of Philadelphia in the suburbs (Delaware county). The taxes are outrageous which makes it extremely hard to cash flow each month. I am looking for suggestions if anyone has dealt or is dealing with this issue. In the area I am looking into, a 1200sq ft, 3bed, 1.5 bath row home taxes are around 6k and are selling for around 150k. My main priority is trying to find a deal off market, but I am not having much luck. Any ideas / thoughts would be appreciated. Thanks all

Jonathan Greene · Answer

I would hop into the city. Your numbers would work there and there is a ton of reliable off-market lead sources in the area. You can basically choose your in price based on the area and as long as you understand the neighborhood dynamics, it's pretty safe. Taxes are nothing. I have a 4/1.5 row house under contract for 115k (needs 60k reno) and the taxes are $1,200/year.

Rich O'Neill · Answer

Hey @Matt McGillian I invest almost exclusively in Delco. It has definitely gotten hard to find great deals lately, but I don't find taxes to be the issue. One big thing that I do is appeal the taxes. Since the reassessment things have gotten a little more wonky (since we don't know what the school millage rates are yet) but the county has granted almost all of my appeals if done correctly. I have a lawyer that does them for me and charges a commission. He does an excellent job. I need to pay for appraisals as well but in the long run it saves me a ton of money. To date I have saved about $50,000 a year across all of my properties.

Jaron Walling · Answer

@Matt McGillian Congrats on starting the journey. Don't worry it's a long one!

You have the same problem most investors have. Lack of supply = lack of DEALS. My advice is to create spreadsheets in excel (if not already) and run the numbers on every property you're considering. Negotiation is a powerful tool if you find a motivated seller. Off market deals are ideal but don't give up on listed properties. Look for houses with problems. Look for long days on market. That's how I found my first deal. The description said black mold on windows and basement so buyers avoided it.

Just starting out. How to find a deal?

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