Hi! Newbie excited to begin investing in Philadelphia, PA

[Garrett M.]

I'm excited to be a part of the BP crew! Thanks to Josh and the BP membership for making this such a great resource for those who want to educate themselves about REI.

Since I was a kid, I have always been fascinated by houses and neighborhood development. I suppose it makes REI a natural area of investment for me, but this is the first time I'm able to do something about it. I have hungrily listened to the first 12 podcasts and have been familiarizing myself with the forums. I have one problem though, the more I learn the longer my list of questions becomes!

I am a 7 year resident of the Fairmount neighborhood of Philadelpia and I feel like I know the downtown market fairly well with an understanding of relative values. I am considering tapping into the equity in my primary residence to begin investing in Philadelphia. Is that what BP members refer to as house-hacking? I was curious about opinions you all might have on home equity loans vs HELOCS... And more important is this a good idea at all?

I am interested in the long view of buy/hold. I plan to hold for 10 yrs or more and rent the units. Starting out I was planning on single family but I am becoming interested in 2-4 units as well. I will be looking for discounted properties in established areas that are walkable or close to downtown. I am also interested in properties in areas that are upcoming in value and quality of life.

I plan to attend the next local BP met-up at London Bar and Grill this Tuesday eve and I am also planning to attend the Philadelphia Sheriff Sale (as an observer only!) As I said, I have more questions than I know what to do with. But I'm excited to get started. Thanks for welcoming me.

[Troy Sheets]

Welcome @Garrett M. , I'm just up the street from you in Brewerytown! I live in my MFH at 30th and Girard and I'm currently working on a flip in Brewerytown as well. House hacking, at least as far as I understand, is what I'm doing with my multi family; living in one unit and renting the other three out, letting my tenants pay my mortgage, taxes, etc. and still leaving me with a few dollars in my pocket every month. 

I'd recommend you stay as close to home/what you know as possible to get started. Being comfortable in the area and close to your first property will be nice when you have to run there after work or stop by on a weekend. Trust me! It also helps your decision making process if you are familiar with an area. If you're unfamiliar with an area it could be tough to pull the trigger on a property or to know why it is/isn't a good bet.

As far as 5 properties, try one and see if you like it? You may hate being a landlord and decide flipping or some other REI related avenue is for you. If you get this first one and love it, you'll find a way to get the next four.

Fairmount is a great area but really tough to cash flow in. I'd look at areas nearby that you're comfortable in with lower property values. Maybe you drive through them regularly, have a favorite bar or restaurant there, etc. Pick an area and become an expert on it and the property values. Walk around on a Friday evening and a Saturday afternoon to see what it's really all about. Talk to people and ask them what's going on in the area. Any problems? What's good, what stores are opening, etc. Brewerytown is booming, Francisville is hot, U-City/W. Philly of course is excellent too. I'd also look at Mantua.