All Forum Posts by: Sheryl Sitman

@Stuart Udis has pretty much told you everything you need to be aware of. Its truly admirable that you are starting this journey at such a young age and clearly you learned a lot already. But Stuart is telling you the stuff the gurus, BRRR pundits, lenders etc are not teaching - the reality on the ground. Your numbers are not going to pan out. I urge early investors to get some guidance from seasoned investors and to pay for some good coaching. I see too many newer investors end up with bottomless pits in tough cities like Philly. One bad tenant or unexpected capital expense could ruin you. Do you know how hard it is to evict in Philly? How much a major repair could cost? if you are able to get an experienced mentor and willing to pay a truly good contractor to work with you on scoping some properties, you can jump the learning curve and avoid some really painful mistakes AND learn.

@Nigel Girard  Hey there and welcome to the world of investing! I want to caution you. There is a glut of Temple student housing and those that succeed in that market tend to be experienced in student housing -- it is a niche business that you need to learn in depth - everything from what students in that particular school look for (furnished, one bath per room, rooftop deck...) to knowing how to handle leasing to students (and parents) to the fact that you will have yearly turnovers - no long term tenants for obvious reasons. There are lots of opportunities in Philly. Try to learn as much as you can and the answer as to what is the "right" way to start will make itself apparent to you. I don't know if there is room still but there is VERY inexpensive course offered through Jumpstart NE Philly starting this week that you may want to look into. @Yuriy Skripnichenko runs that

Great topic to raise and not being talked about enough!  I also just took a look at some insurance renewals / premium increases that made no sense due to the replacement cost the carrier used. Switching carriers brought some of those down by almost half, saving me hundreds per property... I also suggest that any rehab or repair/upgrade that you do, do it right. Use resilient materials and do quality rehabs - using cheap plumbing fixtures, flooring, windows . . . will only mean more costly maintenance. And vet tenants as well as you can - aim for folks that will stay long term and take care of the home. New investors -- need to fully understand the potential damage that a tenant can do.

@Brendan Harnett. Jumpstart is a very affordable program and mentorship opportunity to start learning the ropes and network. Highly recommend connecting with @Yuriy Skripnichenko.  Perfect timing since they are starting a cohort soon.

@Shelly Goldbaum  talking to people that work in the market is a great way to dive in and start learning and there are good people here offering to connect.  I started out investing while I lived overseas and then moved to the Philly suburbs. The learning curve is significant so take every opportunity to climb the curve quickly and learn from others. A reliable team is key, including a truly investment savvy agent. Choose wisely :-)  

@Alan Asriants  wise words and observations! Yes, these mistakes are made by newer investors all the time. You reminded me of a NY investor who once asked me to help him to hire a contractor for a tenant turnover. I asked him if he had a scope and he told me he would rely on the GC for that because he was too scared to visit his own property. New investors make mistakes that can cost them not just when they buy but can create an endless and bottomless pit. In this example, the contractor was simply instructed to "do the minimum".  It just does not work that way.

@Drew Sygit perfectly put! I see this repeatedly in Philadelphia and sometimes the investment turns into a bottomless pit. Working with the right team is crucial.  

I’ve spent years working with small landlords and investors in Philadelphia, helping them navigate everything from major rehabs to compliance headaches. One thing is clear: Philly has a lot of opportunity, but it’s not exactly “plug and play”. So can be challenging for newbies and remote folks to get started.

Here’s what I’ve seen trip up remote investors:

• Not knowing how to choose a contractor (by price, by Google review, by asking on FB . . .)

• Working with retail GCs who aren’t used to investment-grade renovations

• Struggling to identify the neighborhoods that are investment opportunities— not just “cheap”

• Not understanding the maze of compliance requirements   

This is a market that peaks the interest of many investors, so how are you guys seeing remote investors create successful foundations in Philly?

 How did you build your local team, find reliable team members (GCs, agents, property management...)

What would you do differently if starting over?

I am building tools for folks wanting to break into the Philly market remotely — so your insights are appreciated!

@Jorge Morales  

Your total predicted rent of $3,600 assumes $1,800 per unit. If Unit 2 remains at $1,200, you're leaving $600/month or $7,200/year on the table. Over just a few years, that becomes a significant loss.

It’s critical to determine whether the cost of rehabbing Unit 2 will allow you to get to $1,800 rent. Working with the right contractor can make all the difference. A contractor who understands the rental market—not just construction—can help design the scope efficiently and avoid unnecessary upgrades that don’t drive rent growth. It's a skill set that comes only with lots of experience.

Keeping current tenants at below-market rent may seem like the easier path, but it can limit your returns and delay your ability to refinance if you're using BRRRR.

Bottom line: Whether it’s worth rehabbing  depends on the rehab-to-rent ratio. Make sure to work with a really good contractor - it can make all the difference. Avoid any temptation to go with the cheapest estimate. Been there, done that.

People market their off market properties all the time in FB groups. Go to in person RE mtgs and meet people in the areas you are looking.