A Breakdown of Philadelphia Neighborhoods and Values

[Jimmy O'Connor]

Hey Everyone! 

One of the obstacles I've been working to overcome is learning to speak the same investment language as both the people I buy from and sell to. Below, is my opinion of neighborhood breakdowns on how I define values for your standard row in the "City of Brotherly Shove."  These are rules of thumb that seem to be on par with today's market. Let me know if you guys are seeing different values on the rehabs or what you are defining as A/B/C/D Class neighborhoods! 

(I apologize if the copy and paste screws up the format of the post)

Standards for Philly Neighborhood and Rehabs

Parameters:

This is a rough estimate on homes that are between ~800 to ~1200 sf homes that are set up as SF 3 bed 1 baths. This is the metric typically used on row homes or twins, detached structures usually add landscape or more siding and a higher likelihood of pitched & shingled roof.

Definitions:

Full Gut

• Full demo and clear out down to the studs
• Reframe Property
• Completely New Mechanics (HVAC, Electric, Plumbing)
• New Windows
• Full drywall and paint
• New Kitchen
• Redo Existing bathroom and likely add a full bath in basement and/or ½ bath on 1st floor (comp dependent)
• Finish basement
• Replace flat roof
• New Flooring down to subfloors
• Break, Flatten, Pour new Basement concrete
• This assumes no underpinning or structure is needed. If needed add a minimum of 15k

Moderate Rehab

• Can save at least two of the following- Electric, Drywall, Flooring, Plumbing (likely touch ups in the other two)
• Redo Kitchen
• Redo Existing Bathrooms
• No framing or architect plans needed
• Paint
• Finish Basement
• Add a split unit to existing duct work (prevent from tearing up existing plaster/drywall)

*Think of a grandma home that does not have knob and tube and has been on top of roof/windows so we aren’t as worried about mold/water damage*

Light Rehab

• Comps do not need a finished basement or basement is finished to comp standard
• Comps do not need HVAC or you can just add split unit to existing ductwork
• Kitchen
• Bathroom
• Floors
• Paint
• No major rehaul of mechanics needed (aka do not need to rip out walls)

Lipstick

• Paint, Floors, appliances in the most basic sense

ARV Range	Full Gut	Moderate	Light	Lipstick
+450 (A+)	150-300	N/A	N/A	N/A
380-450 (A)	90-120	70-75	N/A	N/A
270-400 (B/B+)	85-100	60-70	N/A	N/A
210-270 (B-)	75-80	60-65	45-55	N/A
170-210(C/C+)	65-75	50-60	40-50	15-30
140-170(C-)	60-70	50-60	35-45	10-20
120-140 (D)	55-65	40-50	25-35	5-15

Philly Neighborhoods Breakdown:

A+ : Obvious Prime Real Estate. You can feel the money in the air.

• Anywhere between Washington Ave to Spring Garden between Delaware and Schuylkill River
• U-City/ Spruce Hill (19104)
• Chestnut Hill (19118), Historic West Germantown (19144), Historic Mt. Airy (19119)
• Girard Estates (19145)
• Fairmount (19130)
• Northern Liberties(19123) & Fishtown(19125)
  
  

A: Only new construction and rehabs, with very very few shells and opportunity left, young trendy bars and coffee shops on every other corner.

• · East Passyunk by Passyunk Ave (19147)
• Manayunk (19127)
• NE Philly past Pennypack Creek (19114, 19154, 19116, 19115)
• W Philly: Cedar Park (19143), Wynnefield (19131)/Overbrook by St. Joe’s (19151), Powelton Village (19104), Squirrel Hill (19104)
• East Falls (19129)
• Francisville (19130)

B+: Ton of flips, new construction SF being sold, still a couple teardowns on the block, trendy bars and coffee shops starting to open.

• Majority of South Philly-Newbold (19146/45), Point Breeze (19146/45), Wharton/ Dickinson Narrows (19147/48)
• Brewerytown (19121)
• True Temple - 11th to 19th, Cecil B Moore to Diamond, most investors may be stuck on Broad-18th (19121/19122)
• West Oak Lane Closer to Cheltenham Ave (19126)
• Port Richmond SE of Aramingo, SW of Allegheny Ave (19134)
• East Kenzo (19125)/Old Kenzo (1923)/Norris Square (19123/33)
• W Mt. Airy closer to Germantown Ave, the more north the better (19119)
• Garden Court (19143), Cedar Park (19143), Walnut Hill (19139)

B: New construction going on but mainly as multis, few SF build and sell, most action are in flips rehabs, no bars or restaurants yet.

• Grays Ferry close to 25th and Washington (19146)
• West Sharswood closer to 25th and Girard (19121)
• West Mt. Airy (19119) and West Germantown (19144)
• Allegheny West that is west of Hunting Park Ave (19132/ 19129)
• Cobbs Creek right by 52nd Street (19139, 19143)
• Mantua and Haverford North that is SE of Lancaster and 42nd Street (19104)

B- :Plenty of Flip action, very few new constructions on the block, if it is, it is a buy and hold.

• S. Philly: Grays Ferry (19146), Lower Moyamensing “LOMO” (19148)
• East Sharswood, further away from Girard Ave (19121)
• West Kenzo between Front Street and American (19133)
• West Passyunk (19145)
• W. Philly: Cobbs Creek between to 55-59th (19139/43)
• North Kingsessing right by Baltimore or the railroad tracks (19143)
• Port Richmond between Aramingo to Weikel (19134)
• North East Philly from Cheltenham Ave to Pennypack Creek (19152, 19111, 19136, 19149)
• E Mt. Airy (19119) and W Germantown closer to Germantown Ave and up north (19144)
• Southern Eastwick (19153)

C: Mix of buy and holds and flips, typically a BRRR neighborhood.

• West Side of Cobbs Creek this one is rapidly changing (19143/39)
• South Haddington (19139)
• Lower West Oak Lane (19138)
• Mid Kingsessing (19143), Pockets of Elmwood Park (19142) down to Parts of Eastwick (19156)
• East Germantown further away from Germantown Ave (19144, 19138) or closer to Wayne Junction (19144)
• Rest of Port Richmond (19134)
• Olney (19120), La Salle Area (19141, 19144) , Most of the neighborhoods that are adjacent to Broad, north of Roosevelt Blvd all the way to ~Godfrey (19141, 19126)
• Strawberry Mansion from Cecil B to Diamond (19121)
• Allegheny West North Of Cambria (19132)
• Eastwick (19153)

C-: Mainly rentals with some low end flips.

• Elmwood Park (19142)
• Southern Strawberry Mansion from Diamond to Lehigh (19132)
• Allegheny West between Somerset and Indiana Ave (19132)
• NE Harrowgate (19134)
• Carrol Park/Heston Ville (19131)

D: Almost exclusively rentals with home depot style flips.

• Mill Creek (19139)
• Most of Elmwood Park, especially the tinier and narrow streets (19142)
• Parts of Strawberry Mansion by Lehigh Ave to Somerset Ave in Allegheny West(19132)
• Pretty much all of 22nd Street to Frankford Ave between Lehigh and Roosevelt Blvd (with some exceptions for properties bordering Roosevelt Blvd) (19132, 19140, 19133, 19134)
• Good Chunk of Frankford (19124)

F: Higher Crime and objectively Philly's center for its opioid epidemic. Inexpensive properties with higher rent.

• Kensington and Allegheny Ave (19134)