All Forum Posts by: Adam Garner

It would be speculative to purchase that lot. 

Right now, there is momentum pushing up towards Lehigh Ave. There are also a couple of commercial development projects near Kensington Ave in Harrowgate. I think we have a long way to go for new construction to reach the area that you are looking in.

Depending on the price and zoning, the parcel you are looking at could still be a decent buy. 10 years is a long time. There are some investors that "land bank" vacant land in anticipation of appreciation over time. 

As you all know, there are dozens of large multifamily projects (100 unit+) being built in the city.

Do you believe that developers are taking into account the number of units that are under construction before starting their projects?

Once many of these buildings are complete in the next 1-2 years, there should be a noticeable increase in the supply of rental housing. It is also my understanding that a sizable portion of this new housing is going to be luxury.

Do you believe that there are enough people migrating into Philadelphia to support the large increase in rental housing that is coming?

Some food for thought:

-Philly is more affordable than NYC, DC, and Boston

-More and more people are beginning to work remotely

-Projects may be funded by 1031 exchanges in Qualified Opportunity Zones

-In 2018, the homeownership rate in Philadelphia was 52.7% according to the United States Census Bureau

-Currently, inventory for Single Family houses in Philadelphia is low

-In 2019, the average household income in Philly was $64,838 according to Esri

Leo,

1. I think that finding a property with value add opportunities is not a bad idea. I wouldn't go for something that requires major repairs considering you aren't handy and like someone previously mentioned, you haven't worked with contractors. Contractors can take advantage of you if you don't know what you're doing. 

2. If I were you, I would make sure to leave some "cushion" in your bank account in case something goes wrong. For example, if the water heater goes or you need to replace an oven in one of the units. Also, if you purchase a multifamily, you should have enough reserves to cover the mortgage if a tenant is not paying. The eviction process can be long in Philadelphia. If you want to shoot me a PM, I can tell you my process for screening tenants.

3. I would definitely go multifamily.

4. If you could still cash flow positively while only putting down 3.5%, why wouldn't you?? I would put the least amount of money down possible. Use the FHA loan to your advantage. Run the numbers and make sure that your calculations are realistic for prospective rents, operating expenses, etc.

@Maricruz Romero

If I were you, I would look to certain sections of Kensington. Some areas are still up and coming.

You could also check out Brewerytown.  

Have you made a trip to Philadelphia yet?