All Forum Posts by: Chad G.

Good thing I'm not interested in center city.

I'll stick to A/B class as I mentioned. Thinking about targeting around the hospital for medical professionals.

Thanks, that post looks like what I should focus on in phase twoof the analysis.

I do not have access to MLS yet (other than Zillow, et al.)

 Thanks, I'm just not sure what else to consider before choosing a neighborhood.

We're looking for cash flow first and foremost, but won't be disappointed if it appreciates :-)

I'm glad to hear you are successful there. I'm looking for guidance on my analysis. Did I do a thorough enough job? An i reading it right? What else should I be looking at/for?

We live in NYC, which according to BP 2015 Market Analysis Report is the third worst place in the country, so my wife and I are looking at nearby markets to invest in instead. Since I have family in Allentown, PA and it is only about 2 hours away, we are looking into the Lehigh Valley as a potential location to begin our portfolio. I just finished a fairly high level analysis of the region and I am interested in getting feedback on whether it should be considered promising or not (either entirely or the specific neighborhoods) as well as any additional guidance/suggestions that can be offered.

My research is as follows:

Population

The region is located within 300 miles of several large metro-politan areas of the eastern United States, including Pittsburgh, Boston, Baltimore and Washington, D.C. and is particularly accessible to Philadelphia and New York City. Population growth has generally been increasing steadily (~8.1%) since 1980 although at a more rapid pace from 2000-2010 (~11.8%). It is the third largest MSA in PA (~650K residents, ~875K projected by 2040), 68th in the entire USA.

4.4% Seasonally Adjusted Unemployment Rate in January (Decrease of 1 percent over the year), which is better than the total USA.

Jobs and income

Job growth was 0.9% over the year.

Job growth in the past 5 years has been particularly high in Healthcare & Social Assistance (5,758 jobs or 12% growth) Transportation & Warehousing (4,567 jobs or 32% growth), and Arts, Entertainment & Recreation (3,877 jobs or 54% growth) according to the Lehigh Valley Economic Development Corporation (LVEDC).

Job growth projections by 2040 are expected to be highest in the following sectors:

Healthcare - 75% (Lehigh Valley hospital is considered one of the best in the country and is the largest employer in the region with ~13000 employees, St. Lukes has about 10000)

Professional & Technical Services - 85%

Construction - 85%

Transportation & Warehousing - 46% (FedEx is expected to begin construction of a 1 million sq foot megahub in the next 30-60 days, adding about 400 jobs, Amazon also has a major distribution center here)

The median household income for both Lehigh ($54,923) and Northampton ($60,097) counties exceed the median income estimate for Pennsylvania ($52,548) and the USA ($52K).

Potential Neighborhoods

I am interested in areas surrounding Allentown and Bethlehem. For instance:

Whitehall (18052)

Median Income: $69,029

Poverty: 5.3%

Crime rating: A+

Schools: B-

Bethlehem Township

Median Income: 80,901

Poverty: 3.6%

RealtyTrac data conflicts with Lehigh Valley Planning Commission (due to Bethlehem vs Bethlehem Township not being separated in the former), so the following is likely inaccurate:

Crime rating: B+

Schools: B

Thanks,

Chad

Sources:

http://www.lvb.com/

http://www.lehighvalley.org/

http://www.realtytrac.com/statsandtrends/pa/lehigh...

Is anyone aware of any financial planners/advisors in the greater NYC metro that are also active real estate investors? I recently got married and will be starting a new job that puts my wife and I in a higher tax bracket. I would like to discuss our situation with a financial planner as we ready ourselves to make our first rental investment, get life insurance, etc.

I don't think an MBA is necessary. I have my MBA, but my technical undergraduate degree produced more than enough income to provide the necessary capital (if only I had found BP before getting my masters!). You need to figure that the debt added to your balance sheet for an MBA will be between $30K+ from an online school to at least $60K+ from a traditional school (non-Ivy League), which is in addition to the cost of the undergraduate degree. Those might be better deployed as a downpayment(s) on property. Otherwise you might delay your investment career.

Nice; thanks for sharing Ayad!

@Shannon Leahy

The "people who were over leveraged lost everything" in 2008 were speculators that were hoping to flip their properties as market values rose. They usually had ARM loans that ballooned so they couldn't afford the payment anymore. It doesn't really matter much if you are underwater on your loan if you are a buy & hold investor and your rents cover the mortgage and other costs. It will eventually work itself out in the long run, but this generally has more to do with "buying right" and making good decisions than extracting equity per se.

Another possible reason to take equity out of a property is as a legal deterrent. If you are sued, the first thing they are likely to look at are your properties with a high amount of equity. If you are leveraged, these will not be of much use to them.

I am not sure what your end goal is, but if you are not looking for a job (e.g. flipping, wholesaling) or a business (e.g. property management, landlording), you may want to considering looking into Turnkey providers. Their purpose is to manage the investments for you (of course you still need to verify their performance!), which should address your concern about investing in another city.