All Forum Posts by: David Haynes

@Thomas Levy I work with a large number of investors in the area and have witnessed their success firsthand. A lot of it comes down to finding that perfect property at the right price. It sounds like you already have one in mind. It’s a numbers game really. Make sure to have those numbers right before stepping in. That purchase price should give you plenty of room and flexibility. Beware of the Philly transfer tax. Try to split that with the seller. Delco’s transfer tax is less than half of Philly’s but Delco often has higher annual taxes. I’m excited for you! I am here to answer any questions that you have. Feel free to reach out.

@Chris Fuhry

I’m sure most tenants would be irritated by the monthly pop-ins. If I were a tenant, I know that I would be. It shows a lack of trust. I would talk with the PM and ask what the logic behind the pop-ins is, especially if you have a long-term tenant who has never given problems.

I know many investors around colleges like to check on their place often if they’re renting to students. That seems reasonable. But not all age groups need constant check ins.

I’m also curious to know why you’re disinterested in Philadelphia. Are Delaware County and Montgomery County off limits for you as well? It seems many investors here are jumping at every property I present to them. I’m not seeing much hesitation from other investors.

@Henry Perez I’ll tell you this from experience. Investors are buying homes like crazy. Of course, you find one or two who are waiting it out. But overall, I and my office are seeing a huge increase in the purchase of investment properties.

I’m not saying it’s the right or wrong time to buy. I’m just saying that investors are buying properties faster than I can find them.

@Victoria Pham

I love this! I especially liked what you had to say about predicting the market. In the stock market, they have the efficient market hypothesis which states that any changes in the value of a stock are immediately seen in its price. There is no lag.

Taking this hypothesis to real estate is tricky because we do have so many investors and home-seekers who are unaware of all available information. However, if you look at the overall real estate market and ignore the random homes that were oversold or undersold, we should expect to see all the long-term effects of COVID in the current price of these homes.

In short, if the real estate market is efficient, all the negative effects of COVID (as we currently understand them) have already been seen. Only as more unexpected information becomes available will we see a change in the markets direction.

If you’re betting that the real estate market is going down, then you’re doing just that... your betting. It’s a gamble. We don’t know how long or how short COVID will last. But EVERYTHING we currently understand about COVID has already taken COMPLETE effect on the real estate market.

If investors want to wait. Go ahead. But they have a 50/50 chance of being incorrect.

@Ebony Calloway Yes, that transfer tax is surprising. In Philadelphia, that transfer tax is 4.278% but can be split between the buyer and seller at 2.139% each. What is even more surprising is that Delaware County (neighboring Philly) has a transfer tax of 2% which can be split at 1% each. Many of my clients prefer to invest in Delaware County for that very reason.

@Bobby Burks

Find a good hard-money lender for first-time flippers. Unless you’re wanting to invest in Strawberry Mansion, you’ll need access to good lending.

Also start learning the market. Pay attention to properties that are being sold and how much they are going for. Find out which areas are best for rentals and which ones are best for flips.

If you need help finding good investment properties, I’m here for you.

@Trey Knight

I have not gotten these emails, but I understand how it could be legitimate. These emails are most likely from stand-alone wholesalers who hunt down properties, get them under contract, and assign the contract to you for a fee. They basically sell the contract to you for $10,000. Some wholesalers can do a pretty good job, but I would say most are working by themselves with little-to-no credentials or experience. They are usually not licensed real estate agents, and therefore could screw up contracts and get you into a lot of trouble. I would steer clear of them unless they have a successful track record. 

@Sean Johnson

A hard-money lender typically lends you 60-75% of the purchase price and rehab. So let's say you are purchasing a $50,000 property that needs another $50,000 in rehab ($100,000 in all). They will lend you $75,000 (75%) and will expect you to bring the other $25,000 (25%). The subject property is the collateral they will claim if you become delinquent in your payments.

If you are wanting to invest with $0 down, you will need to bridge that $25,000 (the remaining 25%) with funding from a private investor, friends, or family. It is typically not a wise choice to do this. To be 100% leveraged is risky and somewhat irresponsible unless you have an amazing deal and/or are an experienced real estate investor.

@Tony Bermeo I and my team have done several deals in 19120. The closer you get to the boulevard, the worse it gets. I would check out rentometer and possibly the MLS. I love seeing deals in this area. The rental market appears to be pretty strong.

There are a few avenues you can take to get the funds that you need. 

It's cliche and possibly humbling, but start with family and friends. Depending on how much equity you pull out of your current home, they may have enough to cover the rehab costs until the property qualifies for a government-backed loan. Depending on the appraisal, you may be able to reward them for helping you.

Some investors have been able to get a line of credit at the bank. It's rare but possible. Your bank will be able to tell you whether you qualify.

The most popular route is to borrow from a hard-money lender. There should be several hard-money lenders in your area. You could also find some that operate nation-wide. These loans are typically for a year or less and charge higher interest rates than conventional loans. Competitive rates can range from 9-11%. They will often lend up to 75% of the purchase price and rehab. When you utilize these loans, you want to finish the rehab as quickly as possible so that you can refinance out and avoid the high interest.

Try to connect with investors in your area. They will be able to give you more specific guidance.