All Forum Posts by: Peter Dunne

Hi @Nathan Shultz I can put you in touch with an amazing Philly law firm that focuses on zoning issues if that would be helpful to you. Zoning is a very fluid reality in Philly with changes being made by City Counsel and the ZBA hearing tons of requests for variances and changes. As the zoning code changes, they don't require pre-existing buildings to necessarily conform if it would be a significant hardship to do so (Like tearing them down and rebuilding).

@Mauricio Botero I live about 10 blocks from there and almost bought a triplex at Wayne and Manheim, but my rehab numbers were closer to $125k. Values/rents/crime vary dramatically block by block in that section of Germantown. I have friends that just bought one of the 6 bedrooms on Manheim for $280k, so there is upside. However, it was renovated top to bottom with permits and all new MEP, kitchen, baths, etc.

These huge Germantown homes often require quite a bit of work, so your $25k feels low to me. What did the inspection look like? 

There is a challenge with renting 5-6 bedroom properties, as most of the folks in the neighborhood are looking for 1-2 bedrooms in the $800-950 range. Your potential tenant pool is simply smaller at numbers like $2k. If they can afford that, they can afford to buy a house in Germantown. My guess is the Section 8 was pushing up the value.

Best of luck! Really dig into the rental comps to make sure it works.

@Christian Lewis It's just super competitive right now. All of the attention for the 100+ units in Philadelphia have driven those investors to look smaller. Just as an example, I received 2 random phone calls from NY investors yesterday afternoon looking for 5-20 unit properties based off a post a wrote over a month ago. There are many factors at play, but it seems many eyes are turning to the Philly rental market, not to mention us local guys with the connections. At some point, you need to build relationships that put your directly in touch with owners.

This is a question I think about almost every day and discuss with other community leaders. I live in the Germantown neighborhood of Philadelphia, working as a Realtor, and preparing for my own rehab/development projects. This neighborhood has some of the richest history in the US (Buildings from the 1700's around the corner from me). It also has a long history of demographic shifts including white flight out. It is a robust community, but also one with collective trauma from disinvestment, poor schools, lack of commercial options. Much of this is changing rapidly (wholesaler postcards are flying around. Many of the long-time residents have struggled to build wealth due to all of the expected injustices that come with urban poverty, so they are not in a position to take advantage of rising property values. Leaders in the community have come up with some pretty cool initiatives to solve this (See Jumpstart Germantown), but most feel like they are being left behind as young, white hipsters move into the amazing old houses. As a Realtor, I am hesitant to work with out of state investors who simply see the potential, but couldn't possibly know about the community dynamics. It's been eye-opening to see the reality that those with wealth and privilege get to remake communities in their own image, and the poor largely have to move on to another less-desirable place to live, even if they spent their entire lives in the neighborhood. Mortgage redlining played a huge role in this by essentially forcing residents to rent because banks wouldn't underwrite loans for their homes.

I'm working with a few other neighborhood leaders to put together a development company that only employs contractors from the neighborhood, creates job training opportunities, and works to help neighbors stay in their homes. While investment can be positive in general economic terms, it can also be destructive to community identities. I'd love to connect with others who are trying to figure out how to invest and develop with community development as a high priority.

I hosted a bunch of genuine Eagles fans at my house last night. It was a surreal event with folks in unbelief that things could be going well for the team. I've lived in Philly 10 years and have been trying to shift my internal sports allegiances from DC metro teams. I know the national media has be pretty ugly narrative around our city/fans, but its a beautiful place to live and fun to watch the city unify around sports. Do the Pats really need another trophy? Go EAGLES!!!

Hi @Joe S. - Sounds good. Your risk can definitely go down by investing very locally. Congrats on putting together an off-market deal. Hopefully, some of the commission $ the seller is saving is resulting in a lower price to you. Your attorney and the title company should be your primary resources to get you through the process.

Hi @Joe S.

You're looking in my neck of the woods. I could not recommend house hacking enough if your budget and lifestyle work for it. It's an amazing way to get started (especially with owner-occupied, residential loans). There are a number of factors to consider, so I can't give concrete advice, but if you already have a tenant and feel you can live at below-market rent yourself (and the numbers work if you end up moving out), it could be a good fit. If the rehab construction quality is good, I would recommend a turn key property like this for a new investor, especially if you aren't interested in doing work yourself.

Do you already live in the area? I'd be happy to take a look at the property specifics if would like to share. Manayunk/Roxborough values can vary block to block.

Hope you find the right deal. I would have done the house-hacking thing if I didn't already have kids.

Hi @Ann S.

I am a Realtor working out of Chestnut Hill. My background is in architecture, sustainable design, and large multi-family management. Your ARV should be based on historical sales comp data, and short-term trends (Is there any new development in the immediate area that could impact value?). I also agree you should be conservative when getting started. That challenge with Philly is that each area can be block-by-block in terms of property values, so unless you know the area personally, simply searching the 'Sold' section on Zillow could be pretty risky. This is one of the values of working with an agent who is an expert in the neighborhood(s) you are interested in. I am based out of NW Philadelphia and the near northern suburbs.

All the best!

I was recently interviewing property managers for a 127 unit here in Philadelphia, and I was incredibly impressed by (and was confirmed by the recommendations of others) Property Management Group (PMG). https://www.propertymanagementgroup.com/

If you reach out, ask for Matt

Hi @Dan Barth,

I've been working with a multi-family investment group here in Philadelphia the past two years. We hold a 127 unit and have I have been involved with both marketing the property and hunting for new acquisitions. The market is incredibly hot right now as investors sense the end of cheap money. Sellers are expecting incredibly low cap rates (and are actually getting them). Our underwriting has always proved to be too conservative and we are getting beat out at prices that simply don't make sense. 

As the 100+ unit properties get snapped up, many local investors are moving down the food chain. Where they wouldn't have touched a 15-30 unit property a year ago, it seems many people are hunting in the area, and brokers are taking on these sales as well. All that to say, it's not easy to find a good deal right now unless you are able to connect with the owner directly. If you are serious about buying, I would connect with the brokers in the city that are doing deals of this size, however, with $100k to put down (Nice work BTW), those properties will likely be on the MLS/Loopnet/Etc. To go after those, I would recommend interviewing some investor-friendly agents to find a professional you can trust to assist you in navigating the process. Most of these publicly listed properties are offering commission splits to the buyer's agent, so it doesn't really cost you anything to be represented. Just be mindful that professional Realtors are looking to represent qualified buyers who at least intend to buy something. Real estate investing is a long-term, relational activity, so by thoughtful and respectful as you find the right "team."

All the best!