All Forum Posts by: David Haynes

 I don't venture out that way. I'm trying to focus on Philly and its suburbs for now. But I have made some connections with investors in that area. Some have turned their attention to Philadelphia, but I don't know their motives other than diversifying their portfolio. Philadelphia is different in that it's in that convenient location in the middle of NYC, DC, Wilmington, and all of NJ. Every week I'm crossing paths with investors from these areas. But yes, regarding the market in Lancaster and Reading, I'm definitely not the expert.

Any investors in Lancaster or Reading that can provide some insight?

Bucks County PA is a nice area for sure. From my experience though, most have to pay retail prices for as-is properties. I've done a few deals in Bucks, I'd be interested to hear about yours. 

@Mary Joe Thanks for the question. 

I ran the numbers for a duplex I sold in Drexel Hill, PA. I consider it a B class neighborhood because of its less than pleasing school district, Upper Darby. Assuming you buy it for $200K and put $20K of work into it, the 2 two-bed units would rent around $1,500 each. I always factor in management at 10%, vacancy at 4%, and maintenance at 7%. Taxes were around $7,000 annually and I used the normal rates for insurance. You would net $1,690 monthly without a mortgage payment. With a mortgage payment, you netting $550 monthly with the refinance ARV set at $270K.

@Anthony Holloway Just like @Kenneth Williams, I'm biased as well haha. The Philadelphia suburbs are a great place to pick up a multifamily for under $400K with strong cap rates. In fact, I just sold a well-maintained off-market 9-unit in the nice part of Norristown, PA for $450K. A place like that would bring $8,300/month in gross rent easily. Recently, duplexes in B level neighborhoods have sold just above $200K with $3,000 in gross rent. It's worth checking out. 

PA is a tenant-friendly state, yet investing outside the city isn't too risky. Evictions have happened recently in Delaware County and Montgomery County PA within 60 days.

@Pamela L Assogba Congrats on taking that first step! I've been helping investors find rentals and flips around Philadelphia for a while. From my experience, here are some great rental neighborhoods that at or around that B level:

Sharon Hill, Germantown, Fishtown, Drexel Hill (multis best), Collingdale, Cobbs Creek, Port Richmond, Pottstown, Norristown (closest to the courthouse), West Oak Lane.

Of course, all of this is subjective and is by no means exhaustive. Keep in mind that Philadelphia has lower property taxes yet higher transfer taxes. Delaware County and Montgomery County have higher property taxes yet lower transfer taxes. Some B+ level neighborhoods in Delaware County make more sense if the property is a multi-family to counteract the higher taxes.

I'm a Philadelphia investor, real estate agent, and wholesaler doing business in Philly, Montgomery County, and Delaware County. I know that corporations benefit from establishing themselves in specific states (i.e. Delaware) because of their lenient corporate laws and tax requirements. Can the same be said for LLCs? Would it make sense to open an LLC in a state other than the one where you do the majority of your investing?

Investment Info:

Single-family residence wholesale investment in Philadelphia.

Purchase price: $66,000
Cash invested: $20,000
Sale price: $125,000

This was a perfect buy-and-hold opportunity that one of my investors picked up quickly. It came occupied with a tenant paying market rent at $950/month. The short-term play would have been to keep the tenant and refinance as-is for about $110K. The stronger long-term play would be to perform cosmetic updates on the property for about $10K, refinance at $125K, and find a section 8 tenant paying $1200/month. A home run deal, through and through. Many more to come.

I want to quickly share this article/research revealing the Philadelphia suburbs with the highest potential for foreclosures: Northeastern Housing Markets Remain Most at Risk of Economic Impact from Coronavirus Pandemic.

The top counties for the Philly area were "Burlington, Camden, and Gloucester counties in New Jersey, plus Bucks County, PA." I have worked with Philadelphia investors for a while, so I understand when Bucks County is on the radar, everyone zeroes in. Here's your heads up!

I appreciate the advice @Alex Uman and @Nick Brown. @Kevin M., thanks for the warning as well. Zoning and insurance may be difficult aspects to work around. 

A partner of mine is having a lot of success with his AirBnB business in Philadelphia despite COVID. Any BnB locations with shared community spaces have taken a hit, but separated units seem to be continuing very strong. It has convinced him to buy a couple more properties for the express purpose of converting them to BnB rentals. This is something that I myself want to dabble in. But where should I invest?

I think back to the time I used AirBnB for my trip to Rome and how I made my decision. There was a trade-off. The closer you were to the city, the more expensive the stay was. The further you were from the city, the more important public transportation was. However, if I had had a car, parking and traffic would have been key factors, not so much the distance.

Location is key. What do you think are the best locations for AirBnB in the Philly area? Assuming the customers are intending to spend time in the city, would they be willing to stay in locations as far as Delaware County, Bucks County, and Montgomery County? 

And then there are questions about zoning and the legality of running an AirBnB. Any input would be helpful.