All Forum Posts by: Alex Uman

@Priyanka Singhania While I do believe that values will continue to rise in Gray's Ferry it sounds like your strategy is more based around rental income. We can always estimate that an area will appreciate but at the end of the day, you can never guarantee value of a property or neighborhood in 10 years. Regardless, I still think that $400k is pretty steep for an investment property to only gross $2k in rent at the higher end. Even if it sells for $650k in ten years, you've tied your money up where it could be earning more with value add projects.

@Jared Forman I appreciate that sentiment. At the end of the day these are properties for investment, not for your primary residence. Many investors I have worked with have decided against purchasing lucrative properties in great areas after going to see them in person and imagining themselves living there. Taking emotions out of the equation helps to move quickly on solid investments before the opportunity passes you up. That being said, I do understand the fear of purchasing properties without proper understanding of the condition. For newer investors I would recommend seeing the property before making any firm decision but for those investors who have been buying-fixing and holding for a while now, buying sight-unseen gives you the upper hand in speedy acquisitions.

@Priyanka Singhania I tend to agree with @Joe P. on this one. For a buy and hold in South Philly, that is rather expensive and typically the price point that an owner occupied home would sell for in that area. I'd look more toward smaller value add projects there for more "bang for your buck". You'll be able to lower your costs significantly, tax abatement or not. For investors that I have worked with, the tax abatement is most lucrative for those who intend to either develop from a lot up or demo/new build. I wouldn't focus your strategy on a newly built property that you cannot recoup your investment from for years to come. Even at the higher end of $2000 in gross rent per month, it would take at least 16 years to recoup your full investment. By then the tax abatement will have ended and you'd be hemorrhaging more of your net income from the property. 

@Daniel C. When it comes to research on Philly’s neighborhoods, Google is your best friend. Google an area and see what you find. Googling Fishtown will give you all positive things along with articles about “How it became the hottest neighborhood in the city”. This should show you that that area will have a higher entry cost and has already appreciated past the entry point for most newer investors. Google Brewerytown and you’ll find a ton about places to buy and rent and articles about how the neighborhood is growing. That should show you that the area is in fact up and coming. Then try googling Mantua and see what you find. Areas around this town are constantly changing. Google is your best friend when attempting to really figure them out for yourself.

Hey @Daniel C. congrats on your first success in real estate investing. Philadelphia is a great market to buy in right now and my team has had plenty of success moving properties in those areas you mentioned (Brewerytown/Mt Airy). Good luck on your journey and feel free to reach out if you have any questions!

@Vincent Brunetto It really all depends on the situation and risk tolerance of the investor... For a first time flipper who doesn't have any experience under their belt it may be best to just save up the cash and not have to pay off the interest. On the flip side, hard money opens up the gateway to those who don't have just enough money to start out on a first project. For those who work with a lot of volume and have established relationships with their lenders, Hard money allows for continual work on multiple projects but does eat out of the profit as you mentioned. At the end of the day it really does depend on experience and individual strategy.

Does anyone in this thread work from home? I find in real estate, we tend to work either on the road or from traditional offices despite the lockdown/work from home trend. I currently work from an office but have worked from home in the past. Additionally my SO currently works from home.

Most everyone enjoys working from home intermittently or when the circumstances dictate it but most do not want to work from home indefinitely. News of pushing back the return to offices has been met with mostly negative emotions by many that I know. Even the most introverted people are social creatures and miss the interaction with coworkers they once had pre-COVID. I enjoyed my first few weeks working from home and appreciated the opportunity to do so while finishing my undergrad. Overtime I found myself enjoying my ability to get out of the house more and more, and even a short ten minute commute to school or an office helps to break up the monotony of sitting at home working all day.

While the outlook may look bleak for returning to offices right now, I feel that the all the hype surrounding the mass exodus from cities is rather overblown. Take that as you will, I am young and work and interact with other young people who do not have any plans to leave cities anytime soon. I think this sentiment is a symptom of COVID, which like the virus will come to pass in the long run. The suburbs will rightfully grow in this next year or two but I do not think everyone plans on leaving the city just yet!

@Liliya Patton South Philly is hot right now! Everything we've gotten there from full guts to cleaner projects has moved very quickly in the last few weeks. I would invest there or in other similarly appreciating areas around the city.

Hey @Liliya Patton. Great question. On this front I like to think more long term. Is there more opportunity for immediate vacancy due to online classes? Absolutely. Do students still need a place to live near campus? For the most part yes. Is this pandemic going to completely alter the way in which Universities educate? I highly doubt it. As a recent college grad I can tell you that much of the learning experience still comes from personal relationships with professors and fellow students. Once things start to return to normal, students will return to in person classes and will still need a place to live near campus regardless.

From what I have seen from my own investors, the Temple area is still a highly desirable part of the city that keeps appreciating. We sell rehab properties in that area very quickly as the demand is likely to remain in vicinity of the school.

@Frank Nouma It is a great area. We have plenty of investors who only look to buy in West Philly, Cobb's Creek in particular.