Starting out with first BRRR in Pennsylvania

[Shahadat Reza]

Hi everyone,

My partner and I are just taking the first steps towards our real estate investment journey. We have our stable day jobs but we envision a different lifestyle that we currently have. For about 6 months we have spent time educating ourselves, reading a lot of books and mapping out our real estate and personal goals. We feel like we are finally ready to take the next step and purchase our first investment property. We have decided BRRR as our strategy of choice, so we plan to purchase distressed properties, force appreciation by remodeling and refinance to take out our capital. We are focusing on Delaware county of Pennsylvania, especially interested in places like upper Darby, prospect park etc. We decided to choose these locations based on our own market research of steady income and population growth in these areas, and other investors in BP seem to also consider these locations investor friendly. However, we are not strictly restricted to these areas and are open to other locations in southeast Pennsylvania and greater Philadelphia region.

We have taken the first step and have gotten approved for a HELOC on our current residential property that we plan to use to purchase and rehab our first distressed property in cash. We are contacting banks regarding getting pre-approved for cash out refinance, although this seems a bit tricky due to COVID-19 policies, a lot of banks require 6 months seasoning period for cash-out refinance.

We are analyzing properties using MLS that we have gained access through a mutual friend who is a real estate agent, but said friend is not experienced in working with real estate investors.

So at this point we are looking to connect with other real estate investors, agents, property managers and contractors based in Philadelphia and southeast Pennsylvania. We realize that we are new to this but we will try very sincerely to bring values to each and every professional relationship we build, as a mutually beneficial professional relationship lasts the longest. We live in a growing Philadelphia neighborhood and our friends and neighbors are always looking for professionals for fixing up or selling their homes. If we meet a great professional we will happily refer them to our friends and neighbors. We are very excited to start out and looking forward to meet other investors and professionals at Bigger Pockets!

[Rich O'Neill]

Hey @Shahadat Reza, sounds like you are taking all of the right steps! Nice work! 

I have had a great experience with Philadelphia Federal Credit Union on refinancing BRRRR properties. 2 caveats they have are: they need the tenant to verify in writing that they are still working and have income from their job. You also need to qualify as a "member" of the CU. To qualify, you have to live, work, or do business in the city of Philadelphia. I do business in the city so that was my ticket, but they never verified anything. Other than that, they have the best rates and terms I have found, and I have called A LOT of banks.

I can put you in touch with my loan officer there if you would like. 

As for buying properties off the MLS, I have found lately that anything that hits the MLS is not a good deal. Obviously there are exceptions, but I have not found a good deal on the MLS in over a year and a half. All of my deals in that time frame have come from wholesalers.

My company Fleming Project Management also does work exclusively for real estate investors. If you check my other posts, you will see I have done quite a bit with the BRRRR model, so we would be happy to help you with your project when you get there. Send me a DM and we can connect more on any of those concepts.

Best of luck!