All Forum Posts by: David Haynes

@Nick Peters Woops, did I just reveal valuable formulas for free?

@JD Martin Great point. The flip ARV is solid at $325K. My rental ARV was not as solid. I'll need to go back and place a better refi value for the rental (most likely lower) after doing some more homework.

I'm a numbers guy. I know that BiggerPockets has its own calculators, but I'm also hands-on. I'd rather understand the math and the formulas behind the profit margin. Here's my first attempt at creating a detailed spreadsheet for basic number running. There's always room for improvement, so I wanted to share this with the BP community to hear other perspectives and insights.

I created this sheet specifically for the Philly market, so that is why you will see drop-down lists for transfer taxes. They differ by county and can be split or full. The counties I do business in are Philadelphia, Montgomery County, and Delaware County. I also added an option for assignment fees when using a wholesaler. I also made it possible to view each property as a flip or rental in order to aid me in deciding which is best. Another option allows me to see the difference between using cash or a HML. I have attached a screenshot of each section of the spreadsheet.

The deal that I plugged the numbers in for is in South Philly within Girard Estates 19145. Amazingly, it looks like a great deal for either strategy, but I'm open to feedback on both the deal and spreadsheet.

@Mark Greenawalt For rentals, I would recommend a semi-gloss paint as opposed to flat paint so that marks and stains can be easily wiped off. I don't really have a recommendation for the brand, just go for something that is cost-effective and appropriate for the neighborhood. The same goes for flooring. You want it to be appropriate for the area. If your property is in a neighborhood like Kingsessing or Strawberry Mansion, you want the cheapest durable flooring you can find. If you're in Brewerytown, Girard Estates, or Fishtown, it's better to go with a more expensive option.

I and my team have completed several hundred transactions in the last couple of years in Philadelphia and its neighboring suburbs (Montgomery County and Delaware County). It doesn't happen often, but we did just discover another fraudulent deed. After being in the game for a while, we can usually sense when something is off before we enter contract. This time it was discovered by our faithful and reliable title company who always does an extremely thorough job. It was discovered while sorting through a couple of judgments. The phony seller had no title to the property and pathetically said that he "didn't know any better." Long story short, it's being reported to the authorities and he'll be serving some time behind bars.

I would love to hear about your story. Have you been a victim of fraud? Was it discovered before closing? How was it discovered, and how did you handle it?

@Franky Aikens, a few great rental areas I am seeing are the following: 19139, 19104, 19143, 19050, 19023, 19134, and 19401. These areas aren't necessarily the nicest, but they do have high cash flow opportunities and great value-add opportunities for refinancing all your cash out.

@Brett Weisman I can give you some perspective on the Philadelphia area. You may want to stay away from the nicest parts of the city if you're doing rentals. I'm seeing great SFH rental opportunities in West Philly, Darby, and Upper Darby. You can easily exceed the 1% rule in these areas.

Recently, I've been seeing a lot of multi-family properties up for grabs at great prices in Parkside, Darby, Upper Darby, Collingdale, Aldan, Marcus Hook, and Norristown. I recommend familiarizing yourself with these areas.

@Franky Aikens East Passyunk is a great area. Congrats on your progress too! Yeah, renovated homes in Girard Estates are selling in under a month, many times above asking price. South Philly is a great place for flips, but like I was telling Joshua, you may want to look elsewhere for strong rentals.

@Joshua Levine There are still a lot of great opportunities in South Philly. It does have a lot of attention, but if you know the right people, you can still find a decent flip. Just keep in mind though that any flip you do will require decent finishes to fetch top dollar. I do not think that purchasing rentals in this area is the best decision right now. High-end rental markets are the ones that are suffering the most because of COVID. But multi-families here can still do very well. One investor I work with is buying SFHs and rezoning them to make them a profitable rental. This is not easy to do, however, so I would not encourage anyone to go this route. The best rental markets I am seeing are Upper Darby and West Philly.

Investment Info:

Single-family residence wholesale investment in Philadelphia.

Purchase price: $179,000
Cash invested: $85,000
Sale price: $360,000

This property was in the highly sought after area of Girard Estates close to where Rocky II was filmed. You may even remember Bruce Springsteen's famous song about a mobster in Philly within this area. Just like these two memorable classics, this flip was a classic. As soon as I and my team put it under contract, it sold within an hour to my faithful investor who was looking for something hot in South Philly.

How did you add value to the deal?

This flip demanded a full gut and rehab which gave tremendous value-add opportunity. The high ceilings with recessed lighting and the big basement with egress gave this home a head start. The block was littered by recent rehabs selling between $340K and $370K. No wonder it sold so quickly.