Rental Markets outside Philly

[Ray Realdine]

With the prices of real estate soaring in and around South Philadelphia, what markets do you guys recommend for the buy and hold investor?  Does anyone have experience with the rental markets in South Jersey? Runnemede? Glendora? Deptford?

[Mike Bonadies]

@James Masotti @Trevor Deeter - Love the respectful disagreement neighbor! There is most definitely areas you can do a successful BRRR in South Jersey for both Multi and SFH but I do understand the turnoff of some of the tenant pools. I will say most good deals are not found on the MLS in South Jersey. Maybe I can convince you there is possibility, even in our own backyard. Here are a couple examples that I've worked with.

Example 1 - South End of Sewell - BRRR Duplex (2/1 & 2/1)
Acquisition and Rehab was $200k
ARV: $240k
In the deal for $20k
Rent Roll : $2800 a month(1400 a unit)
Mortgage: $1400 a month (200k @ 7 %)
Taxes: $516 a month
Insurance: $100 a month
Licences/Sewer/Gas: $20 a month
Vac/Capex/Repair: $316 a month (that's a lot but lets be safe)
Cash Flow: $448 + you have 40k in equity and a fat safety net each month due to an accrual rate of $316 a month

Example 2 - Lindenwold SFH - BRRR 4/2
Acquisition and Rehab was $110k
ARV: $140k
In the deal for $5k
Rent Roll : $1700 a month
Mortgage: $700 a month (105k @ 7 %)
Taxes: $441 a month
Insurance: $90 a month
Licences/Sewer: $15 a month
Vac/Capex/Repair: $200 a month (that's a lot but lets be safe)
Cash Flow: $254 + you have 35k in equity and a fat safety net each month due to an accrual rate of $200 a month

The Sewell usually has ideal tenants and very little headaches. In Lindenwold will have lower quality tenants but I look at anything south of the WHP which has higher quality tenant pool vs the norm of Lindenwold. And Lastly, you are in these deals for a few dollars but with my business model I'm okay being 5-15k a deal as long as I create equity and solid cash flow with a fat safety net.