First Investment Property

[Breanna Bobadilla]

Hi BP! 

I am in the process of buying my first property in Philly using an FHA loan. I found a 2 unit property I liked in an up and coming area of Point Breeze. The prices for rent in the area is lower than I anticipated, but the area has been developing more and hopefully in the next year or so we will be able to increase the rent as the value of the area starts to go up. Would it be a poor investment to start off with a negative Cash on Cash return? I am very new and trying to navigate the waters, so any insight would be great!

Thank you!
Breanna 

[Eric Greenberg]

I wont add to alot of the good comments above as I agree you most likely wont cash flow loving in a unit in Point Breeze. That being said Point Breeze has been ‘coming up’ for the last 10+ years so I wouldnt put a huge emphasis that rents will dramatically go up in the next 3 years (if I were to go out on a limb).