All Forum Posts by: Dan Powers

@Mike Shih The further into the Northeast you go typically the better the area gets, so both of those areas are very nice pockets. But, like @Jackie Cramer said, definitely go and drive the area, best advice I give to people not familiar with areas is to go and drive it.

@Charlie O'Leary I'm curious which neighborhood you found the property in, that being said if you are satisfied with the numbers that you would get then I don't see an issue. As @Nathan Gesner said, the demand is here to stay for a while given such little inventory is available.

@Buyan Thyagarajan I would say the biggest thing to look out for is water, structural damage, or any roots coming in to the basement through a tree. Luckily both water and structural issues are generally easy to spot. A roof for most Philly homes is a flat rubber roof that should only cost between 2-4k to redo completely and shouldn't make or break a rehab. Again, with the mechanical systems in most homes its relatively easy to see if your electric is outdated (outlets are horizontal) or your furnace is older than 20 years. Most of the homes I move either the investor knows what to look for or sends out a contractor to check it out for them to make sure they know what they're getting into. Being that all Philly row homes are generally the same once you've conquered one full gut there's generally not too many surprises you'll run into on other projects. Hope this helps, reach out if you have any questions.

@Eric Dietrich Obviously everyone under the sun is looking for multi fam properties so inventory is super limited. That being said I find most of my multi inventory in the Delco/Montco counties. Most of them in come good working order mechanically but need a cosmetic overhaul to bring them up to modern standards. I agree with @Jesse L. Weaver, Pottstown + Norristown are better for cashflow, if your able to find any inventory in West Chester you found self a gem. You could also check out Drexel Hill, Springfield, and Media.

@Pooja Gupta If you are able to find anything in 19127/28 that does work you would a diamond, I typically only come across 2-4 Manayunk deals a year that actually make sense to investors. From what I've seen there will never not be a rents actively looking in Manayunk as you have very diverse groups of people living there. Most are college renters, but post grad, young professions, and even some families call Manayunk home. You'll get interest in your property no matter when you list it.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $110,000
Cash invested: $15,000

This property was occupied delivered vacant so everything was in good shape as is. This 3/1 needed a quick cosmetic rehab and my investor is doing exactly that to make this a great cash flowing rental property.

What made you interested in investing in this type of deal?

What made my investor interested in this property was actually he lives in the neighborhood of this house. Once the property became officially released (I was able to get details ahead of it being released) he was able to scoop up the house instantly and was happy he was going to be improving his neighborhood.

How did you find this deal and how did you negotiate it?

This deal was sourced through New Western Acquisitions and was purchased on a first come first serve basis.

How did you finance this deal?

This deal was purchased using Sherman Bridge Lending, my investor was able to get 85% of purchase and 100% of rehab financed at 10% interest and 2 points.

How did you add value to the deal?

Value was going to be added to the property by redoing the kitchen and bath, as well as a fresh coat of paint throughout.

What was the outcome?

The outcome is going to be a clean rental property bringing in $1500/month

Lessons learned? Challenges?

This property was very straight forward, no issues in closing, no title problems, how I wish every deal of mine would go haha.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Dan Powers - New Western Acquisitions

@Amar Sinha Welcome to the Philly market! The first thing you'll want to do is figure out what areas you want to target and then research the area. Philly as a whole is an extremely block-by-block city with ARV values changing by 20-30k depending on the block you are on. Then I could consider what you are comfortable with rehab-wise, most people only want to do cosmetic items because it's easier. But, I've also heard new investors take the full dive right into full guts because they want the experience and want to run into every situation that can occur during a rehab of that size. Let me know if you have any other questions I can help with.

@Alex Furness@Rich O'Neill You are correct in full transfer tax being 4.278%, it's all dependant on how the deal is structured.

Hey Smith,

First I would focus on a specific area you want to target. As you've prob heard Philly is a very block-by-block city with ARV changing by 20-30k just by depending on the block you're on. Next and honestly the most important aspect is finding a good reliable contractor, I would recommend doing another post in the Philly forum looking for an investor-friendly contractor. Hope this helps, feel free to reach out if you have any other questions.

@Marshall Secord Most conventional banks require a 6 month seasoning period to be able to perform a refi, so you have to have your cash tied up for that time, with that comes a 30-yr fixed at around 3-4%. I do know a few lenders that don't have a seasoning period for their refi on a 30-yr fixed, but charge 4-5%, the only thing they require is having a tenant signed on an annual lease. Typically you see refi's pull out 75% of the appraised value, so if you bought a house for 100k, did 60k in rehab, and appraised at 200k, you would be leaving 10k in the property.

With Brewerytown you can go either way when choosing to flip or keep as a rental, but the level of finishes are drastically different so I wouldn't begin the rehab will you decide your strategy.