All Forum Posts by: Ronald Bowser

Good morning everyone, 

@Kristin Caras Thanks for the up-votes and colleague requests.  I'm always glad to make new connections, so if there is anything I can try and help with, please do not hesitate to message me.

@Daniel Mateo It is tough to place a per unit value since there can be large swings between the rent for a 1BR vs. a 2-3 BR.  That said, we like to see $50-60k per unit on average... closer to 50k of course.  Again, that is just a rough look at the property, the rent the units can command and the overall purchase price are more important to drive the cap rate, cashflow, etc.  The 2 unit I mentioned earlier in this thread is a good example.  Unit 1 is a 2-3 BR (one is a walkthrough), while Unit 2 is 1BR on the third floor.  Obviously, Unit 1 provides a higher rent income, but averaging them across the property doesn't account for the variation between the two.

When it comes to pricing of an investment property, the income it generates drives the asking price.  We try and find properties that are being under utilized; vacancies, low rent, poor condition, etc. then figure out how we will make the numbers better if/when we take over.  Finding properties that meet the above is our goal.. 

Hi Handie,

I recently connected with @Jheremy Correa he had a couple deals he shared with me.  Hopefully the two of you can connect.  Feel free to message me if you're looking for any additional information on the area, I live and work in the Lehigh Valley.

Hi @Arpit Gandhi, 

Welcome to the site!  It sounds like you are taking the correct first step of educating yourself.

I live, work, and invest in the Lehigh Valley. I have experience with rentals as well as the BRRRR method, although the refinance step didn't get me nearly as much out of the property as I was planning. I bought an REO for a great price, rehabbed and had it rented for a full year before the bank would even look at it. Then the appraisal came back way lower than expected. It worked as planned, but need to have a firm understanding of what the bank will and won't give you, what rules they have, and ten live at the mercy of their appraisal.

I'm always happy to discuss the area, so if if you have any specific questions, just let me know or feel free to send me a message directly.  Thanks and good luck with your investing!

@John Kim That covers basically everything involved with managing and maintaining the property. Rent and late fee collections, tenant relations, bill paying, maintenance requests, court filing for evictions, quarterly inspections, etc.  Repairs and maintenance do get charged back to the owner.  At our place we have a maintenance crew that we charge $35 an hour plus materials for the service, which is a good rate compared to contractors in the area.  They will handle the basics like painting and lock changes when there are turnovers, fixing faucets and other routine maintenance.  When it comes to plumbing or electric, where a permit is required, we have a network of contractors/vendors we work with, so we will get estimates on everything and get the landlords approval before completing the work.  

The system we use is Appfolio, so owners get their own online portal to check the status of their ledger, review the inspection reports of their property, and have a bunch of built in reporting.  The tenants get a portal as well so they can go online and pay their rent or make maintenance requests for any issues they might be having.  We of course have a 24 hour phone line as well for any emergencies.

I hope that provides a decent overview, but if you have any specific questions or anything, please don't hesitate to let me know.

Generally, we average the vacancy rate at 10% when underwriting (conservative approach), but I believe the actual vacancy rate is below 5% for the area.  There has been a large population influx for a number of years as we have a central location between NY, NJ, & Philadelphia.  In Bethlehem, where I live, we had a casino built in recent years (Sands), there are universities close by (Lehigh, Lafayette, Muhlenburg), good hospitals, and job growth as well.  Fedex is currently building a large distribution facility in the area.  

All of the above is good for Appreciation as the population grows and the densely populated areas can't be developed, so in general I would have to say the appreciation is good in the area, but admittedly, I invest for cash flow and look for properties I can inject some equity in to, so do not do too much delving in to appreciation rates... I look at it more as icing on the cake when the time comes for me to divest.  Hopefully that will be when the tenants have paid down my mortgage and I can cash out to send the kids to college or with any luck quit rat race.

Hello, @John Kim & @Jaysen Medhurst

I received an alert for this thread as I live and work in the Lehigh Valley.  I invest here as well.  $150k can get you a decent multi-family (2-4 unit depending on class) in one of the three major cities that encompass the Lehigh Valley; Allentown, Bethlehem, & Easton.  We see cap rates at 10+% and with no mortgage payment, you should cash flow nicely.  

For comparison, I bought a 2 unit in 2014 ($120k) that cash flows a little above $700 and picked up another 2 unit a couple months ago ($160k) with a commercial front, residential up top, and rent-able garage that should produce slightly better once I get it fully occupied.  Both of those are leveraged, so the mortgages are impacting my cash flow, but if I can get those paid off they'll break 1k per month.  Since you'd be remote, I assume you'd need Property Management, so you'd want to factor in 10% gross rent collected and first month's rent whenever there is a turnover,  

Hope that provides some useful info for you.  I'm always happy to talk about the area, so please don't hesitate if I can try and answer anything else.

@Casey Sung Yes it was also great meeting you Casey, I hope you are doing well.

@Frank Karlya I look forward to hearing from you.

@Frank Karlya @Basit Siddiqi 

If you ever intend to visit the Lehigh Valley, please do not hesitate to let me know.  I would be happy to meet for coffee and talk about investing and the area.

Hi Frank,

I just sent you a direct message.  I work and live in the Lehigh Valley and have a few investment properties of my own in the area.  I'd be happy to discuss the market with you.  Please do not hesitate to reach out.

Hey @Jan Kutrzeba, just sent you a DM with some info.  Hope to hear from you.