All Forum Posts by: Dan Powers

New Western host an REI on Tap once a quarter located in Philadelphia or Media. I always post them on here so I will keep you posted on the next one!

@Uendy Garcia Congrats on taking the jump into the crazy world of investment real estate. I see a few sides to this coin, based off your numbers your around a 10% return on your investment which on the surface is not the best.  Most of the investors I deal with typically expect 22-30% return like @Greg Kasmer said as well depending on the area, using this formula (purchase+rehab)/ARV as a very basic formula to calculate returns.

Again 10% return is not the best so look for more profit in the future. That being said, the value of getting your foot in the door, getting your team together, and pushing through any problems you occur is priceless. On top of that if your spending 65-70k I would assume your doing mostly cosmetics with touching up the mechanicals as needed which is a good starter rehab as well. Normally you see people get into this space and they want a clean house as is and simply want to do cosmetics to it which seems easy enough. In reality what happens is you end up paying more for a "clean house" but because you are doing a flip people want new mechanicals (central air, 200 amp electric, pvc plumbing stack) so you end up doing a full gut or larger rehab then simple cosmetics and now your returns have shrunk.

In your situation for your first investment I would be ok with a smaller return because of the experience gained, but for the next look for larger profit.

@Tim Hunte Renting my the room is technically illegal in Philadelphia but its just as illegal as doing rehabs without pulling permits. Now it's more uncommon to rent by the room in Philly simply due to finding people willing buy into that situation. The only situation where I've seen it become successful is around the universities, specifically temple because of the amount of multi inventory. Not saying it's not possible or profitable in the rest of the city, simply the multi unit option and 0% vacancy from the university makes it a great option.

@Autumn Kim There are certainly a done of deals on the MLS that look great until you read the remarks and see "no access, do not approach, squatter occupied", etc. In Philadelphia I would check with the seller or agent if they have a lease, if they do a standard eviction can take anywhere from 3-6 months to go through the great court system we have. If not you will need to go through an ejectment which can take anywhere from 6-9 months from my experience. Like @Stuart Udis said, most of the time its more cost and time effective to do cash for keys and throw a few grand to hopefully vacate so you can change the locks.

Welcome @Emmanuel Ojo-Powerson II I'll shoot you a PM so we can connect

Welcome  @Peter Intermaggio I'll send you a PM but those are great pockets for both wholesaling and flipping. It's certainly competitive but as long as you have everything in place, contractor, funding, and deal source it can be quite lucrative. 

@Daniel Duku The main things you want to look for is verifying the zoning via Philadelphia Atlas, https://atlas.phila.gov/, public records in philly are often incorrect. Building off of what @Daniel Duku the main thing you would want to check for which you can via atlas is if the land was used previously for an auto shop, laundry mat, or something where you would need to get an environmental report. Most of the time your going to be fine and you won't find one of those places, but all of these things can easily be found out and a 10 day period should be more then enough time. 

Obviously if you discover something that could warrant a environmental report then I would talk to the seller about extending the DD period to get that done.

@Takisha Jones Obviously going to echo people saying you need to make sure you have the correct RM-1 zoning for the property, but more importantly you need to make sure the lot dimensions can support it. For multi unit properties in Philadelphia you need to take your lot sqft and divide by 360, you need 360 sqft per unit up to 4 units. So, for a duplex you need a minimum of 720 sqft in lot size, 1080 for a triplex, and 1440 sqft for a quadplex. If you do not meet these requirements you cannot build the desired project unless you pursue a variance (which can be a headache).

@Yash Mirchandani If you ever want to invest in Philadelphia feel free to message me, I specialize in investment properties.

@Aku Kennedy I'm an agent who specializes in investment properties in Philly. Like @Kevin Paulk said Philly is extremely block by block with every neighborhood having their own niches and values. My first thought is to look in Delaware county, it's right outside West Philly and can easily accommodate a more cosmetic rehab with good tenants around that price point. Please DM me would love to connect more!