First time buyer looking to move to philly

[Ryan DeRobertis]

Hey everyone - probably your pretty typical new guy post so sorry if this (including this apology) has been done many times before:

My ask:

1. Guidance/advice on which of the neighborhoods listed below match my goals for my first home purchase.
2. Guidance/advice on if I can't find a home that matches my goals, should I purchase a plot and build or do a refurb?

Background/Finances:

3-year forum lurker and listener of the podcast, finally ready to make my first home purchase. For various reasons my gf and I have decided on Philadelphia, though since we work remotely we are not tied to a particular neighborhood. I have 75k in cash for a downpayment and would like to hit 20% down, so my ideal price range is 250-375k. No outstanding loans or debt, my credit is strong (750+) and I make roughly 3.3k~ a month after taxes, maximizing 401k, employee stock purchase, health insurance, etc. I have a family member who has done real estate in Philadelphia for 30+ years so I trust he will guide me well through the process, but I want to do all my research first.

Ideal purchase: 

I would like to find a duplex or larger, though I think that is unlikely for the price point. For the unit, we will live in 2 bedrooms is a must so we can make one an office. The other unit can be 1 or 2+. We are trying to decide on which neighborhoods to look in, soI put together a list of things I am looking for with a rating of 1-5 on a scale of importance:

-Safety: 4 (My GF has never lived in Philly, I know what to expect. She likes to go on runs, is attractive, and is a wholesome midwesterner - also smart/realistic and knows this is a major metro area.)

-Walkability/Bikeability: 4 (I have worked remote or lived next to my office for 5 years and really like the lifestyle of not having to drive often. We like the typical 20s/30s things like gyms, restaurants, bars, etc)

-Parking: 3/4 (we won't need to commute as we work remote, but will want to leave the city every few weeks to visit family in PA/VA)

-Appreciation: 2 (I would like to see some increase in equity, but this isn't a buy/hold for max turn around - we intend to be living there for 3-5 years and then would like to keep it and rent out for cash flow.)

-Cashflow/rental income: 4 (Based on 20% down for 250k-375k if the property's monthly expenses are 1300-1800 /mo I want to cover half or more by renting the second unit, and then cashflow when renting both units after moving out)

-2 bedroom in our unit: 5 (We will need an office, and a place for friends/family to stay, but we don't need a third bedroom)

-Access to green space: 3 (I realize this is philly and this is lacking, I went to college here. This is the main reason brewery town is on my list because of the proximity to Fairmount park)

-Roofdeck/yards: 3 (Hey I can dream)


With this in mind, a few areas have stood out to me (loose ordering of which seem to best fit my goals):

-Brewerytown (Positives: I went to school at Temple and can only imagine how awesome this spot could become situated between campus, center city, and the only big park in the city. Concerns: Safety? Parking? Market is already "too hot"?)

-Manayunk/Roxborough (Positives: Nice houses, safe, 'main street' vibe [were moving from Madison, WI which is an awesome place], access to greenspace, easy to leave the city to get to NEPA. Concerns: Not in the city proper[My gf is interested in getting the 'city experience'], lack of inventory, especially duplexes)

-S philly (Positives: looks like lots of inventory, cheaper houses, known for being safer than N philly. Concerns: too much neighborhood, not enough activities/parks/nightlife? Parking?)

-Mantua (Positives: low prices, close to center city, close to zoo. Concerns: Still dangerous? I had one friend tell me it is ok, another tell me no way)

-Norristown/Olde Kensington/Fishtown - I know I am generalizing these areas too much (Positives: There is inventory and the area is appreciating. Concerns: I've been told small properties, worst parking in the city, increasing hard drug problems?)

Summary:

Based on the information I have provided, do you think I am looking in the right areas? Also, what are the general feelings towards refurbing or building on a plot of land as opposed to buying a finished house? I have no strict/pressing timeline to move, so if that is probably the best way to meet my goals and still within my budget, I am very open to it. Thank you all so much for any advice you may have, this is an awesome community sharing great information with the world :)

[Joe P.]

A lot to take in here, man. Here's the deal...figure out your actual price range because there is a massive difference between 250 and 375k.

At your price point, you have to sacrifice something. Most Philly-proper homes have no yard or a small concrete jungle. Want parking? Need to move to a low-pop area where you're missing the hustle and the bustle. Want safety? Move to Jersey or adopt the get-the-&%(^-out-of-my-way look at that personally, at 5'4", I've had to adopt for a platitude of reasons.

I think you'll need to decide if you truly want an investment property, or a I'm-young-in-my-20s-and-looking-for-a-vibrant-neighborhood property. 300k can buy you a duplex in South Philly, likely shoddily done, 2 blocks from Broad. Nice and close to Broad Street Line and a brisk 15-30 minute walk to Center City, and a 10 minute walk to Passyunk Bars/Restaurants. Unless you're in a tough neighborhood, though, you won't hit a 4 on your income scale. Maybe you can rent out an updated 2 bedroom for 1500ish, and each neighborhood is different, but it won't cover all your expenses -- that's OK. You're already ahead of the game is someone is taking care of 50-75% of your home expenses (I wish someone was doing that for me!)

Also, RE: the girlfriend. Is she your partner? Is she part of the financial stake in what you're doing? Is it love everlasting? If the answers to these are NO, then buy for YOU. Based on your list you're twisting yourself to make her happy as part of this, and if you're not going to put a ring on it and she's not going to slap bills on the table for this, then make your moves and she can decide if she wants to be a part of it.

Finally, I can give some neighborhood advice but any smart investor or agent here will tell you it is BLOCK by BLOCK and that's the absolute truth. I'm in the Whitman/Pennsport area and if you go 2 blocks to the west, its a tough neighborhood. But my block? Really nice. Quiet. No parking. Neighbors are mostly cool. We're talking the difference of 1000 feet between my block and the next bad block...that's Philly. But, what I would do, if you can...Airbnb different neighborhoods and come visit. Decide what neighborhoods you like and don't like, and then you can check inventory to see if it meets your criterion.