Help in Evaluating Philadelphia Real Estate

[Alex Schukin]

Hi BP Community!

I'm a new investor based in NY, looking for my first property. I've done some extensive top-down research on attractive cities for single-family or small multi-family (duplex, triplex) buy & hold rentals and Philadelphia has come out on top.

I'm looking to understand what would be a reasonable gross cap-rate to expect when investing in Philadelphia given a budget of $150K - $200K. Using online data bases such as (Zillow, Trulia and Redfin) come across as unreliable or inconsistent in terms of evaluating comps. Any areas I should be focusing on in particular?

Additionally, what are some good sources to find reliable input assumptions (rental rates, tax rates, vacancy rates, growth rates for rents and house prices) for modeling a deal?

Am I missing something in how I am thinking about my approach? If someone has a few minutes for a phone call, I would love to find some time to chat about your experience in the Philly market.

Thanks,

Alex

[Joseph Scorese]

Hi @Alex Schukin,

Welcome to BP!

There are a few things you need to consider when evaluating Philadelphia based on that price point, asset class and return on your investment. What neighborhoods are considering in Philadelphia. Philadelphia is made up of Neighborhoods and there numbers vary neighborhood to neighborhood. Have you considered some Due Diligence attending some CDC or RCO meetings here in Philadelphia. Ecspecially a zoning meeting to that designated neighborhood. Rents, Values will change in a matter of one or two developments approved alone. I can refer you to some seasoned real estate professionals that you can work with to place offers and they can verify your prequalification. Otherwise, I would suggest attending more Philadelphia based real estate events in your future to determine your number's.

Regards,

Joe Scorese