All Forum Posts by: Chris Pelc

I would start by networking with wholesalers and realtors that specialize in investment property. 

I agree with Grady, in that you really want to define what your criteria you are looking for. Though i think its just as necessary for you to figure out how you would go about financing, because obviously you are limited to what your buying power is. If you're looking to fix/flip, hard money is a great route. Typically you can finance construction costs, and if it is a lighter rehab, you may be able to get a decent LTV on the loan say 85%-90%. With hard money, depending on the amount financed i would say generally speaking $50k minimum liquid cash on hand is a decent starting point. This would give you enough for the downpayment and cash on hand for holding costs on an all-in cost around $150k-$200k. Obviously experience, total net assets, and credit score have a big factor in what loans you would qualify for. Some investors that i work with in the Philly area like to purchase in cash and finance the rehab themselves, and depending on their strategy, will either flip the house or cash-out refinance for rental. There are other alternatives too.. If you own a home with a lot of equity, you could look at getting a HELOC. Let me know if you'd like to connect to talk a little more about this!

So from what i understand in Philadelphia, the approvals are considered on the lot square footages. The amount of units allowed require 360sq/ft of the total lot. So for instance if the square footage of the lot is 720sq/ft, you should be allowed a duplex. If the square footage of the lot is 1080sq/ft you should be allowed a triplex. And once it gets up to the quads, i believe they require something like 480sq/ft of the lot space per unit. I am no expert in this, so i am open to correction! Hope this helps.

Hey Laura, just curious if you've looked into the Philadelphia market for investment property? Considering you are somewhat local, and know the area that might be a good start for you. Philly is certainly a good city for good rent/value ratios. If you are able to put up with rehab of distressed properties, what might be a good route is looking into RM1 properties. If for instance you got into an RM1 and converted to a duplex or triplex, you can still follow the BRRRR method and there is some room for cashout in the refi. if you were able to appraise for higher and the LTV comes out higher than your all-in costs.

Yeah i would definitely second this. I have been seeing a lot of investor activity in the Point Breeze area. And if you're into Section 8 rentals, high opportunity rents are great in 19146. The new pay schedule was just released a few days ago, and for a 3 Bedroom in this area you're looking at $3,120/month. Which is killer if you're getting into something that is sub $200k which is not hard to do in this area. 

I think that some of the most notable areas as far as up-and-coming would be Brewerytown, Norris Square, and olde Kennsington. Brewerytown is already pretty established but the property values have risen almost 15% in the past year. There are still tons of opportunity with all of the new development in this area. Norris square has many new development projects taking place. Olde kennsington has recently been converting its industrial space into large condo and loft space. Hopefully this helps a bit!

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $225,000
Cash invested: $335,000

This is a multi-dwelling property in Folsom PA. A great area for rental, as the school district is Ridley SD. This was a very unique deal, and the investor that i sold this plans to rehab both properties. The numbers came back around $55k per house, and they expect to be getting around $2,500/month from each dwelling. So a total of $5,000/month for an all-in price around $335,000.

What made you interested in investing in this type of deal?

The area is great for renters because of the good school district.

How did you find this deal and how did you negotiate it?

New Western in Philadelphia. The property was direct to seller, so was not advertised anywhere other than through the exclusive inventory of New Western.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $89,000
Cash invested: $130,000

This property was a fantastic buy/hold opportunity for section 8 rentals in the Philadelphia market. This house has 5 bedrooms which sets its estimated payout from PHA Section 8 in the Group 3 schedule is $2,201/month. With a mild rehab at just around $40k, our all in price is going to be $129k which smashes the 1% rule.

What made you interested in investing in this type of deal?

Knowing that rents are backed by the government makes me feel secure in my investments for long term holds. Getting such a great rent to value ratio is a lot harder to achieve, especially on the retail market.

How did you find this deal and how did you negotiate it?

This deal was sourced through New Western. They are firm on the prices, and it was first come first serve.

How did you finance this deal?

All cash. Will be re-financing when rehab is finished.

How did you add value to the deal?

Updating house with new flooring, fixtures, and a heavy cleaning.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

New Western in Philadelphia.