WHY should I invest in Philadelphia (PA), Baltimore (MD)?

Question

Hi everyone, I'm moving to the east coast soon. I'm looking at 2 markets right now for BUY - FIX - HOLD. The pros at these markets are the housing price is very affordable and job growth is +. However, there are many cons which make me concerned:

Philadelphia, PA: population growth rate is slowing down, high crime rates, low median household income, etc.

Baltimore, MD: the population is decreasing fast, high crime rates, negative home appreciation the last 10 years, etc.

I have a saving about 100K - 150K to invest. My strategies will be buying 2 properties under 50K each, rehab, rent out, and refinance. My questions are:

1) Is it possible to get B-class properties in these areas with the money I have right now? How? Can anyone recommend any zip codes?

2) Should I still step into these markets? Any other pros and cons I did not see yet?

3) I would love to connect with investors, realtors, wholesalers, contractors, lenders in these markets. Let's hang out and learn from each other.

4) Which other markets on the east coast I should take a look beside these 2? Why?

Thank you so much!

Etienne Martel · Answer

Hey Vee,

I'm currently using the BRRR strategy in a few states right now so I have some experience. I know in Philly, one street can be a completely different market than the next one. I would cold-call some agents and get a better understanding of where you might want to invest your money.

1) I was looking into North Philly, since there is a new bullet train scheduled to be build through North Philly.

2) There is money to be made in every market, regardless of anything. Someone is making money in every market. You will have to do research and make a table of each city to compare and decide which route to take.

3) I am from California, but I do have knowledge about the BRRR strategy and passive income investments.

4) Watch out for the winter seasons!

Thank you

Nicole B. · Answer

There are many areas of the city and county you could buy at that price.  It just depends on what type of property you're looking for.  For example, Buy and Holds might be more appropriate near colleges, hospitals, and parts of the city with a lot of activity (you can look up online for "hot spots" or "best places to go out" in baltimore).  Places that might attract a younger crowd and renters.

Nicole B. · Answer

I can only speak for Baltimore, as that's where I work and live. Average sales in the Baltimore metro area since 2009 are...

2009 $277,038

2010 $274,199

2011 $262,375

2012 $275,880

2013 $285,402

2014 $281,801

2015 $277,789

2016 $289,284

2017 $299,690

Yuriy Skripnichenko · Answer

@Vee Vu

1) I do not think it's would be an easy find in Philly. You can definitely buy a property for $50k and under but it won't be in a B area. Philly is the city of neighborhoods and in most parts goes block by block. You can see properties go for $30K on one block and a block away they go for $150k...

2) I've been in Philadelphia market for a few years and it's been good so far. Haven't had any issues with renting my units.

3) Feel free to reach out if you have any questions or need some help.

4) I'd say it depends on where you are moving.  There is some good opportunities in NE PA as Scranton - Wilkes Barre areas from what I see. The prices are lower and rents are still good. But they are about 2-3 hrs away from Philly.

Vee Vu · Answer

@Etienne Martel Thanks for all the advice. Do you help investors in Philly too? Or you just looked at the market for your own buying?

Do you have any recommendation for a good realtor in Philly?

Vee Vu · Answer

Hi @Ola Dantis , I just visited the 2 cities. Both have their own pros and cons. For my own lifestyle, I prefer Baltimore because it's a big city where I can find anything I want, and it's not too crowded. Like you said, the city also has many future potential projects and big employers. However, its population is decreasing which makes me concern. But if I look outside the city, there are many counties are gaining people.

With my own research, I feel like the housing is more affordable inside of the city. I think I need to talk more to investors, and realtors who understand the market than me. Thank you, @Conor Reilly

Just like @Brendan Markle mentioned, both are cities of neighborhoods. But Philadelphia population is still growing, even with a slower growth rate. Do you guys think both cities have room for appreciation? What are main factors for appreciation? I think population growth is a very important factor.

Conor Reilly · Answer

Hi @Vee Vu

I can only speak to the Baltimore area, my suggestion would be to look just outside the city itself in areas like Dundalk, Essex and Townson. I have see a decent amount of deals for your price range. My question to you is what is stopping you from looking outside of Baltimore, say to areas closer to DC, if there were a deal for your price range?

Brendan Markle · Answer

Philadelphia is a great market to invest in-  there are many opportunities to buy MFH's that cashflow very well, and have room for appreciation.  Like other people have said, it is a city of neighborhoods, but as long as you do your research it is not hard to find a good deal, at least in my experience.  I'm a real estate agent in Philadelphia, and have my own investment properties.  Let me know if you have any questions or would like to connect !

Ola Dantis · Answer

@Vee Vu As a big proponent of Baltimore, I agree that my counsel might be skewed towards my city. Yes, some parts of Baltimore aren't doing great. However, Baltimore is poised for growth as John Hopkins Hospital ramps up activity and Amazon also has a distribution center.

In addition, there is a geographical advantage that Baltimore has over Philly, especially when the 45-min train project to Washington DC completes in the nearest future. All these are qualitative thoughts, yes, but when you visit Baltimore you can also see cranes everywhere too.

So, are you thinking of visiting these two cities?

Thanks! - Ola

WHY should I invest in Philadelphia (PA), Baltimore (MD)?

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