All Forum Posts by: Gary York

I still contend that if you can cash flow and still benefit from paying off principal each month, which is not an issue even at these elevated numbers, then move forward aggressively.  The Lehigh Valley has tons of logistics centers going up, and rents are certainly at levels that we have never  seen before.  Even with stagnant rates and duplexes in the $300k range, you can easily achieve $1,600+ for a 2 BR, giving you well over the 1% benchmark.

What I have seen is that most likely investors are not building in the proper rent estimates into their forecasts.   Rents in the LV have risen significantly over the past 24 months, thereby making these properties much more viable even given the lofty increase in prices.  

We have been very active in the Lehigh Valley and have obtained 8 multi-unit properties over the past 6-7 mos.  We go in with zero contingencies and often times had to pay over asking with an escalator clause.  In each case the rents we obtained have exceeded our estimates that we built into our forecasts.

@Alisha Boulter where is the property located?

@Ronald Bowser

Hi Ronald,

Great insight and perspective and very much appreciated. It helps me believe that I am on the right path and that my decision making criteria is sound. My main concern has always been that I cannot find a way to 10% returns after all of these percentages are factored in. But when you include principle payoff each month, rental appreciation and such, it eases my mind.

We have purchased a few multi-unit properties in the Lehigh Valley, and we are using the criteria that if it cash flows after accounting for all expenses, including PM, cap ex, repairs and vacancy, then scoop it up as it will be a good long term investment given how the area is booming. We use 12% for PM and 20% combined for the other expense areas I mentioned. Are we thinking about this correctly?

@Christian Beyer

Great advice, thank you.

We have 9 properties and 32 units now in the Lehigh Valley and we currently pay 12%, which is adding up to approximately $50k annually, ouch! There are no other fees, other than they do a good job with painting and rehab support and managing contractors as well and they do this ‘extra’ work at $25/hour.. not sure if this is the right set up or not...

@Veronica Haniger

We typically see a big jump between 1BR and 2 BR, maybe $300-400 and a lesser jump with a 3 BR, closer to $100-200. An extra 1/2 bath can add $100-150 or so and laundry can as well.

@Jeremy Moyer

Hi Jeremy, I have been looking in the Lehigh Valley as well. In terms of smaller pockets of opportunities outside of the three main cities, is there any area in particular that you like? Have you been successful in acquiring properties in 2020?

@Basit Siddiqi

Ok great. So I must be able to prove that the equity or monies that I received out of the refinance, was then used to purchase another property. Do I have a timeline that I must adhere too like in the case of a 1031 exchange?