All Forum Posts by: David Ribardo

John, it all depends on the listing. I use very different approaches for "hot" properties, stale listings, and off market deals. For Allentown I have recently sold duplexes in the 75-85k range that cash flow nicely. Though she is correct that most properties will trade at 95% or asking price or higher, there are plenty that trade lower. For the most dramatic examples, 313 N 14th was listed at 110k and finally sold for $76k, and 624 W Gordon was listed for $100k and sold for $60k. It can be done, but for each one of these kinds of deals I generally will get shot down about twenty times first. Don't give up! 

For any properties that are under heavy competition, such as new listings, you want to come out with your highest and best up front. You need to move quickly on them, generally I get good ones under contract within the first 48 hours. For stale listings, that's where you can send out the low-ball offer and see who bites. Finally, how is your access to off market deals? These are the least competitive, but also can come with some unique headaches for your agent to deal with when the seller chooses to represent themselves.

The other question is to look at the numbers you are using to project cash flow and rate of return. If you are being overly conservative on these you will find yourself getting beat by others who are more realistic. Most of my clients find Allentown 2-units with a property manager will cash flow nicely all the way up to the $95k range.

@Kevin Charles - most of my clients are in your similar position, NY / NJ based investors that are looking for something with a lower price point, lower taxes, and better landlord / tenant laws. The downside of going with a turnkey is that those companies have squeezed all the value add out of the property, and you can miss an opportunity for an easy profit by raising rents or doing some light rehab.  If you have the time to educate yourself and work on your first deal, a good investor friendly agent will educate you every step throughout the process. This includes discussions and recommendations on working with lenders, insurance, contractors / rehab, and property management. 

If you do go the out of state turnkey property route, you will have the least time investment, but generally will still get a decently performing property. Either way you will be making money!

Hey @Daniel Gengaro, welcome to the forums! It's a great place and there are a ton of people to help you with any of your investing needs. 

I live and work in the Lehigh Valley market - let me know if you have any questions about the area. It's a great market for NJ/NY based investors that are looking for lower taxes and more favorable landlord / tenant laws. We've recently been getting some Philly based investors coming up here, since that market has gotten pretty competitive lately.

NOLA is a pretty interesting city. Price points are crazy, but the AirBNB market in the french quarter is killing it there. I took a look at adding a few of those into my Louisiana portfolio, they have such consistent occupancy but the taxes are pretty rough compared to the rest of the state. 

Let me know if there is anything I can help you with!

Glad you decided to join up! Let me know if you have any questions about the Lehigh Valley market, or getting started here!

@Vidit S. I work the Lehigh Valley market here. Let me know if you have any questions about the area or investing in general!

@Sean Vitale, welcome to the community. If you can swing it, owner occupying a FHA 4-unit will get you the best cash on cash return since you will have very little money invested in the property. There are a few good ones on the market now, and I just sold one off-market last week. If you have any questions about the Lehigh Valley market or getting started, let's hear them!

@Amul Sutaria Thanks for reaching out! Let me know if you have any specific questions about the Lehigh Valley market. If you want recommendations for Philly, Lancaster, or Reading I can point you in directions for some other skilled investor agents and team members to support you in those markets as well.

Let me know if you have any questions about the Lehigh Valley market (Allentown, Bethlehem, Easton). Compared to the others, it comes with the unique advantage of being able to see your properties and meet your team face to face with a very reasonable drive. 

What criteria are you using to evaluate your markets? Are there any economics or statistics that you are using to drive your decision? Based on my own personal out of state investing experience (former military, have investments in GA, LA, PA, and NJ) the biggest deciding factor will be the people on your investing team. There are great deals in all neighborhoods, but you will need a good agent to dig them up for you and a great property manager to keep them running for you. For me, these people are more important then any numbers on a spreadsheet.

Hi @Nicholas Santangelo, welcome to the forums. Bethlehem is an awesome area, with some trendy neighborhoods, great attractions, and reasonable price points. It works both as an owner occupant and as an investor, since rent / purchase price ratios are still pretty reasonable. Let us know if you have any questions about the area - there are a ton of experienced investors that can chime in here.

@Andrew Major Chiming in here - former Army, my first rental property is in Fort Benning, Georgia, and I learned a lot of lessons turning a distressed portfolio into a performing one at lovely Fort Polk, Louisiana. 

It sounds like you have a solid approach and have definitely done your homework. I definitely recommend utilizing your VA loan at your earliest opportunity to owner-occupy, it's awesome to be able to buy a house with no money out of pocket. I did this for one of my former SFHs - bought it with zero down (full seller assist), put about 3 weeks worth of work and $5k into renovations, lived in it for two and a half years, and sold it for a tax-free $35,000 profit. It was intended to be a SFH rental, but when they sent one of the Brigades away, 3500 families went "poof" and market rents dropped 30%. I bailed out by selling it, but still made a profit since I bought low. Sticking to the larger "joint bases" and having multiple exit strategies will help protect you from this happening.

Most of my clients are out of state investors, and the ones that have self-managed have had mixed results. Some worked through the growing pains and are saving themselves that 10%. On the flip side, all it takes is one contractor taking advantage of your absentee status, and you could lose more money than a years worth of the property managers cost. I live here in the Lehigh Valley and still use a property manager for my rentals - I know what my time is worth, and that frees me up to do the important tasks for my business.

Lastly - if you are looking in Bethlehem / the Lehigh Valley, don't forget about the SFH market. You can typically buy SFH's here at slightly better cap rates. The 2-4 unit multi market is flooded with new investors getting into the game, agents that don't understand investing, and limited inventory - thus those deals have dried up significantly over the past two years.

Best of luck, and I hope you have a good deployment!