West Philadelphia Buy and Hold Deal

[Efi Shabtai]

Hello BPers, 

I have a property under contract in West Philadelphia (Carroll Park 19131) and was hoping to get your opinion on this deal. Any West Philly investors willing to give their input?

This is a 4/1 1200sf SFH on Allison st between W. Master & West Thompson that I will BRRR.

In a nutshell, I'm at the 1.6% rule and 22% Cash on Cash.    

Any thoughts on the area? Would you not buy in this area because of the crime rate or any other factor(s)?  Does anyone have rentals in the immediate area that have done well or not so well? How is it dealing with tenants? For me, this is more of a cash flow play than appreciation - the numbers seem to work, but I want to make sure the "headache factor" is reasonable here versus the return.       

Purchase Price: $28K 

Rehab Cost: $25K Mainly cosmetic rehab major pieced are: gut/redo the kithchen and bathroom and install new systems, refinish existing hardwood floors

Holding Costs: $5K

ARV: $70K

Using a HELOC to purchase and rehab @5% interest

Closing Costs $2K

Refi into a 30yr fixed mortgage @5% interest with a 75% LTV

Refi Costs: $2.5K

Gross Rent: $950/month

PITI: $430/month

Maintenance: 5%

Capex: 12.5%

Management: 8%

Vacancy: 10%

Any input would be greatly appreciated. Thanks!