Decided to focus on investing in Philadelphia

[Annwar Matani]

Hi everyone

I have been researching markets and I had mentioned in my previous post I was interested in investing in the mid west. I live in Northern NJ and as I mentioned the barrier of entry for me in NJ is too high. However after speaking with my husband (who is totally on board and supportive) I feel it would be better to pick a market in my "backyard". That "backyard" I was looking into is Philadelphia. I am only 1.5 hours away and I want to be hands on- my strategy is to scale quickly so I am looking to BRRR. My first out of state rental would be "safer" buying turnkey however I won't be able to scale quickly. Anyway if you are an investor in Philly I would love to connect. Trying to establish my team so any recommendations for realtors, contractors, lenders, etc will be appreciated!

[Patrick Drury]

@Annwar Matani
If you are looking at investing locally (even if it's 1.5 hrs away) try and carve out some time to go to meet-ups and meet other local investors in the Philly area and network with them and vendors. 

[Kevin Paulk]

@Annwar Matani

In addition to some very good advice @Patrick Drury gave. I suggest you take a few trips out to Philly and explore the different neighborhoods to determine where in Philly you want to invest and what areas you want to avoid. It definitely helped me. I found out very quickly that Philly was really a block by block situation. 

Good Luck!

[Jonathan Greene]

We have several Northern NJ investors who have invested in Philly, mostly with success. The one thing you have to know about Philly is that you have to go there multiple times and learn every block. A 2-block difference could be the difference between appreciation and loss. It is a very block-by-block market. Do not focus on cash flow first in Philly or you will end up in a C-/D+.

You HAVE to work with an agent who has been in Philly for a long time to have success and who owns properties there. We have investors in some neighborhoods that are doing better like Harrowgate, Temple area. I like Cobbs Creek for price vs. value.

[Chris Pelc]

Philadelphia is a great market for investing. But i would certainly suggest doing some due diligence into all of the neighborhoods, pockets, and nuances that go into that. 

It sounds like you have already defined your investment strategy using the BRRRR method. This is great to scale quickly. But have you thought about your rental strategy? Would you be targeting regular long term tenants, section 8 tenants, or possibly STR?

It might be of your benefit to take some tours of the neighborhoods. Attend some local meetups, and expos. Meet other investors, and figure out what your buy box is. 

I work with a lot of out of state investors. One of the first things i advise them to do take a few days of driving around the city and getting to know it. There is so much material at your disposal for doing due diligence into a neighborhood online. But you will never fully get a feel for it, unless you actually step foot into that neighborhood. 

I would love to connect if you would like some assistance with doing so!

[Greg Kasmer]

Quote from @Annwar Matani:

Hi everyone

I have been researching markets and I had mentioned in my previous post I was interested in investing in the mid west. I live in Northern NJ and as I mentioned the barrier of entry for me in NJ is too high. However after speaking with my husband (who is totally on board and supportive) I feel it would be better to pick a market in my "backyard". That "backyard" I was looking into is Philadelphia. I am only 1.5 hours away and I want to be hands on- my strategy is to scale quickly so I am looking to BRRR. My first out of state rental would be "safer" buying turnkey however I won't be able to scale quickly. Anyway if you are an investor in Philly I would love to connect. Trying to establish my team so any recommendations for realtors, contractors, lenders, etc will be appreciated!

 Annwar - There is a large real estate investing group called "DIG" in the Northern suburbs of Philadelphia.... They are one of the largest REIAs in the county I believe. I would suggest looking up their monthly calendar and going to one of their monthly events in conjunction with a visit to the area. I invest in the Philly suburbs so happy to connect on that as well if you are interested. Good Luck!

[Ronald Isgate]

Hi Annwar,

I am a real estate attorney and broker/realtor in the Philadelphia area. There are some great areas North of Philly as well. 

Happy to chat with you

[Alan Asriants]

Hey Annwar, Bucks county and NE phila are good markets to consider and are closer to you relatively than others in the Phila area. 

Competition is high, but rentals are in high demand. If you want to connect about investing in the area, I am happy to do so!

[Rich Davis]

My college rental from the early 90's is currently for sale!

35th & Hamilton.

I thought of buying just for nostalgia sake.  

[Mohammed Rahman]

Hey @Annwar Matani - if I'm in your shoes I would recommend going out to Philly and attending a couple of networking events to brush shoulders with other investors in the city. 

That will give you the quickest way to figure out whether or not the logistics will work for you as well as quickly expand your network to include realtors, contractors, etc. 

[Annwar Matani]

@Patrick Drury thank you yes I am looking into that. Would love to meet other investors and like minded individuals. 

[Annwar Matani]

@Kevin Paulk wow block by block! I'll keep that in mind. For sure thank you. 

[Annwar Matani]

@Jonathan Greene Thanks for sharing I'll look into those neighborhoods. 

[Bob Stevens]

Quote from @Annwar Matani:

Hi everyone

I have been researching markets and I had mentioned in my previous post I was interested in investing in the mid west. I live in Northern NJ and as I mentioned the barrier of entry for me in NJ is too high. However after speaking with my husband (who is totally on board and supportive) I feel it would be better to pick a market in my "backyard". That "backyard" I was looking into is Philadelphia. I am only 1.5 hours away and I want to be hands on- my strategy is to scale quickly so I am looking to BRRR. My first out of state rental would be "safer" buying turnkey however I won't be able to scale quickly. Anyway if you are an investor in Philly I would love to connect. Trying to establish my team so any recommendations for realtors, contractors, lenders, etc will be appreciated!

 Philly really? My son lives there and I can't figure out why LOL. Give me some numbers, maybe I am missing something. All in on avg with rent of ? I have been doing all my biz in Cleveland for about 10 - 13 years, as well, its bee the best overall for rentals, but hey maybe I am missing something, Show me an example. If great numbers maybe we can collaborate. YA never know

All the best 

Thanks

[Bob Stevens]

Quote from @Jonathan Greene:

We have several Northern NJ investors who have invested in Philly, mostly with success. The one thing you have to know about Philly is that you have to go there multiple times and learn every block. A 2-block difference could be the difference between appreciation and loss. It is a very block-by-block market. Do not focus on cash flow first in Philly or you will end up in a C-/D+.

You HAVE to work with an agent who has been in Philly for a long time to have success and who owns properties there. We have investors in some neighborhoods that are doing better like Harrowgate, Temple area. I like Cobbs Creek for price vs. value.

 Show me some examples, as mentioned my son lives there and my daughter is in Lewes DE, so it would be great to do deals there and visit my kids 

All in , rent ? 

[Eric Greenberg]

Like others mentioned get to know Philly by visiting the areas you want to invest in so you can vet what an agent/wholesaler is telling you. Its easy to get burned here. 

When you say scale quickly using the BRRR strategy what is quick to you? Are you looking for small rehabs or full guts? Does that fit inline with the quickness for your scaling needs? Do you plan to self fund or hardmoney/etc? Budget? SFH/MFH? A/B/C/D class areas? Once you finish the property who is your target renter? All of these questions will start to give a frame work for what areas you should or should not focus on.

[Calvin Thomas]

Quote from @Annwar Matani:

Hi everyone

I have been researching markets and I had mentioned in my previous post I was interested in investing in the mid west. I live in Northern NJ and as I mentioned the barrier of entry for me in NJ is too high. However after speaking with my husband (who is totally on board and supportive) I feel it would be better to pick a market in my "backyard". That "backyard" I was looking into is Philadelphia. I am only 1.5 hours away and I want to be hands on- my strategy is to scale quickly so I am looking to BRRR. My first out of state rental would be "safer" buying turnkey however I won't be able to scale quickly. Anyway if you are an investor in Philly I would love to connect. Trying to establish my team so any recommendations for realtors, contractors, lenders, etc will be appreciated!

 Most of Philly is a dump and should be avoided. Temple and Downtown Philly aren't bad, but one still needs to be cognizant of the blocks, streets, and crime.  People go there because it's cheap. Operating in Philly can be a big problem if the laws and regulations are not followed to a T. I believe, you will also need to live in Philly or be forced to hire a licensed property manager in Philly.

Lastly, you cannot deny on credit alone; so it can be a very sticky situation. You shouldn't start in Philly as your first rental; you should stay in your own backyard so you can learn the ropes. Union City, North Bergen and some areas of Elizabeth are okay and you can still earn some profit.

[Lu Kang]

Insurance companies have any begun to charge more for Philly row homes, and the property assessment continues to increase year after year. 

It really depends if you can get a great deal on the purchase price, and yes adding value seems to be the smartest play. 

Back in the late 2010's, Philly had potentially due to the low tax vs the comparable rent. But now it seems taxes have increased, additional government fees, ie lead testing for any property built prior to 2017, and also increases in sewer / water rates. Philly also has 2% transfer tax, vs 1% across the other parts of PA

Other factors like the current investor loans charging at 8%. Not to say it can't be done, but it will be a uphill battle. 

[Jonathan Greene]

Quote from @Bob Stevens:

Quote from @Jonathan Greene:

We have several Northern NJ investors who have invested in Philly, mostly with success. The one thing you have to know about Philly is that you have to go there multiple times and learn every block. A 2-block difference could be the difference between appreciation and loss. It is a very block-by-block market. Do not focus on cash flow first in Philly or you will end up in a C-/D+.

You HAVE to work with an agent who has been in Philly for a long time to have success and who owns properties there. We have investors in some neighborhoods that are doing better like Harrowgate, Temple area. I like Cobbs Creek for price vs. value.

 Show me some examples, as mentioned my son lives there and my daughter is in Lewes DE, so it would be great to do deals there and visit my kids 

All in , rent ? 

During the pandemic, investors from our meetups did about 40 deals in Philly. Long BRRR, quick BRRR, fix and flip, house hack multis, regular multis, so I have data on most and can connect you with investors who have the most units there. The numbers depend on the neighborhood, but the old Harrowgate (which is much improved) numbers were crazy - buy in around 60-70k, limited rehab 5-10k, and rent for 1200. As you go to more progressive neighborhoods, the numbers get better. We have several near Temple, in Cobbs Creek, Gray's Ferry.

[Tanner Lewis]

Happy to connect on the lending side! I'll shoot you a DM

[Bob Stevens]

Quote from @Jonathan Greene:

Quote from @Bob Stevens:

Quote from @Jonathan Greene:

We have several Northern NJ investors who have invested in Philly, mostly with success. The one thing you have to know about Philly is that you have to go there multiple times and learn every block. A 2-block difference could be the difference between appreciation and loss. It is a very block-by-block market. Do not focus on cash flow first in Philly or you will end up in a C-/D+.

You HAVE to work with an agent who has been in Philly for a long time to have success and who owns properties there. We have investors in some neighborhoods that are doing better like Harrowgate, Temple area. I like Cobbs Creek for price vs. value.

 Show me some examples, as mentioned my son lives there and my daughter is in Lewes DE, so it would be great to do deals there and visit my kids 

All in , rent ? 

During the pandemic, investors from our meetups did about 40 deals in Philly. Long BRRR, quick BRRR, fix and flip, house hack multis, regular multis, so I have data on most and can connect you with investors who have the most units there. The numbers depend on the neighborhood, but the old Harrowgate (which is much improved) numbers were crazy - buy in around 60-70k, limited rehab 5-10k, and rent for 1200. As you go to more progressive neighborhoods, the numbers get better. We have several near Temple, in Cobbs Creek, Gray's Ferry.

 Similar numbers to clev, but I do not have a team there. I also need to walk the areas to see how deep hood they really are 

All the best 

[Annwar Matani]

@Greg Kasmer Good to know I will look into that much appreciated. 

@Ronald Isgate thanks will reach out soon 

@Mohammed Rahman thanks for the input I agree I should be networking. 

@Eric Greenberg Good questions to think about, will reflect on it thanks. 

[Annwar Matani]

@Bob Stevens I was actually looking into Cleveland first. However I am considering Philly because I am nervous about managing a rehab so far away. 

[Travis Main]

Hey Annwar, 

       I'm a lender who services the Philadelphia area, if you ever would like to connect just let me know. 

[Bob Stevens]

Quote from @Annwar Matani:

@Bob Stevens I was actually looking into Cleveland first. However I am considering Philly because I am nervous about managing a rehab so far away. 

 Its all about your team. I live 1200 miles away in FL and do a lot of biz there.  But if you're getting the same numbers in similar neighborhoods then stick with philly. 

All the best 

[Stuart Udis]

@Annwar Matani There are certain transactional costs/ costs of doing business in Philadelphia to be mindful of, but I believe the fundamentals that exist in Philadelphia far outweigh this IF investing wisely. There's a lot of "investor friendly" realtors and wholesalers out there, and be mindful of who you work with. Very few actually understand the various nuances of investing in Philadelphia along with the zoning, licensing & regulations. This comes from someone who gets sent hundreds of opportunities each month with 99.9% of these deals a complete train wreck (and that's no exaggeration).  I also get referred to a ton of investors each month through BP who find themselves in trouble and the first thing out of their mouth is "but the real estate agent said....). In most cases these are not issues that can be easily resolved and typically the damage can merely be mitigated. Therefore be sure you have professionals looking over your deals and operations as the costs go up considerably once you make a mistake.