What are realistic Cap Rates in Philadelphia?

[Nathan Flanigan]

Hi, I'm putting together financing and doing research for my first investment purchase. I'm in Philadelphia, my realtor told me that a 5%-6% cap rate is what most properties here see. That seems a good bit lower than the 10% outlined here...

http://www.biggerpockets.com/renewsblog/2010/06/30...

I'm wondering if anyone has any specific experience in Philly and what kind of numbers I can hope to expect.

Thanks for your time!

[Chris Clothier]

@Nathan Flanigan -

When you are reviewing the possibility of going Turnkey, be sure and read some of these BiggerPockets.com blog articles.  Know what to look for and what to ask and you may find that Turnkey is a really good option.  Sometimes an 8% consistent return may be better than the initial 12% you were quoted on paper.  Just for the sake of education, read before you go the Turnkey route.

http://www.biggerpockets.com/renewsblog/2014/12/17...

http://www.biggerpockets.com/renewsblog/2014/05/02...

And this one has more to do with management than actual Turnkey investing, but more turn key properties come with some form of management in place.  Property Management will the the difference in your property performing and not performing up to your expectations.  There will always be ups and downs, but bad management can kill a great investment.

http://www.biggerpockets.com/renewsblog/2014/03/12...

Best of luck to you - 

Chris