All Forum Posts by: Matt I.

Hey all- Once I wrap up a couple major projects in my current live-in flip I'll be in the market to buy a second rental property in Philly. I plan on tapping into my 50k HELOC for the down payment, although I would prefer to not use more than 30k for the down payment. This puts me at a cap of 150k purchase price for my next property.

I currently own my primary residence (live-in rehab) in Fishtown + 1 rental in Olde Richmond. I'm pretty familiar with these neighborhoods, but finding any value add properties in 19125 at my desired price point is difficult. 

Ultimately I'm looking to hone in on Philly neighborhoods that are in my price point and that will cashflow at 1% rule. I'm noticing a lot of my developer clients building single families in Norris Square and further north by Temple Hospital. I've also been analyzing deals in Tacony/Mayfair that look pretty good on paper, although I'm not too familiar with the area. Kensington and Harrowgate- I'm hesitant because of the crime factor, but man, if people are actually paying $400K+ to live on Frankford & Lehigh, these neighborhoods could be great long term plays with a low barrier to entry in today's market.

I'm also planning on receiving criticism for essentially using leverage to buy leverage. I welcome all constructive criticism about using a HELOC as a down payment. However my plan is to use the cashflow from this property and my existing rental to pay down the HELOC in, hopefully, a matter of a few years.

Thanks

Matt

\m/

People move to cities for more than just employment. I grew up in a monotonous NJ suburb and my quality of life has improved dramatically living in a city. I'll try not to generalize, but suburban living exemplifies a lifestyle that people have been moving away from. No walkable amenities, traffic (cities have traffic, but you usually have the option to bike or take public transit), less of diversity and culture...  Still living in my hometown at the age of 25 made me feel twice my age, and miserable. So I left.

As we possibly enter a second wave of covid, I wouldn't be suprised if more people left urban centers short term. But that's only because they can't reap the benefits of what cities have to offer. I don't think its going to change the hearts of artists, visionaries, and entrepreneurs who just can't get off on the unexciting, plain vanilla cone lifestyle that exists in the burbs. 

The bit about digital nomads is also interesting, and I think supports the argument in favor of cities. 

I would agree w @Alina Trigub. There is a lot of uncertainty in the economy due to COVID-19. If you have a good paying job, stay for the time being. The more you stack your chips the better off you  position yourself in the near future.

Being an architect, I also have interest in development at some point in my career. It seems like a great introduction to the world of development is a house hack using a 203k loan. You can use this loan, paired with an FHA or other first time home buyer loan, to buy a distressed property and renovate it. This will give you experience with managing a small construction project, dealing with contractors and invoicing, etc. Its like taking a small bite out of development.

At the end of your deal you now (hopefully) have a cash flowing house hack, and have acquired a necessary foundation of skills to tackle your development aspirations.

Best of luck 

Regardless of your political views, I think this is a discussion worth having. It was briefly discussed on the last BP podcast, but I wanted to open this up to the community. 

Like him or not, Bernie has a lot of traction. With COVID-19 paralyzing the American economy, Bernie's mantra of free college tuition, healthcare, and higher minimum wage will likely attract more people to his court now than in 2016. Given the current rent crisis, it would expect him to add this to his agenda.

Could there be a limit on how much profit property owners can accrue, after all expenses are covered? Could "landlording" become a more regulated/taxed industry?

Most importantly, how would one prepare for such an economic shift if this was to be our 2020 outcome?

This isn't intended to be a republican vs democrat discussion, so please try to speak about this issue from an unbiased point of view.

Looking forward to some great discussion.

B and Tioga is pretty far up there. I'm not aware of activity in that area. I've been seeing a lot of design and planning in the Norris square and west kensington corridors. Seems like land is still relatively cheap out there and you might be able to time the construction boom before it gets to be like east kensington. 

@Hong Y. Hey Hong! Fishtown is pretty saturated and tough to find affordable multifamilies. You really have to get to Port Richmond or Kensington to find something under 300k. I ended up hacking a single family in old Richmond.

@Kevin Moyer you're saying there's new construction multifamilies that would actually cash flow? I assume with such a low down payment and buying turnkey you wouldn't really see good returns, but maybe I'm wrong

@Chad McLeod right! But in my scenario I would move out of my current residence and owner occupy my next purchase. I would technically only owner occupy one residence

Follow up to this post... Can the owner occupant loan be used if you already own a house? Or is it strictly first Time buyers