All Forum Posts by: David Park

Not all parts of Philadelphia are in a bubble. In fact even when the market comes down it will do alright and cash flow. The infrastructure and basic pipelines are there so that it will be alright, not great but good enough to be able to hold, if bought right. There are good income earners living there and buying properties there because of commute time, public transportation, restaurants, coffee shops, it’s safe and fun.

However Point Breeze will not do alright, who ever is doing new construction or flipping there will get hurt badly.

Here’s my logic why Point Breeze over anywhere else is a bubble.

First, It’s not as safe as the other places. I didn’t feel too safe walking around those neighborhood. Random kids sitting on there porch smoking weed, and neighbors calling us out “Look at these guys looking like they gonna move here”, did not sit well with the vibe that I got.

The Red Circle is where most of the development is happening in Point Breeze area.

Second, why would I move here? If I have a job in Center City and I need to commute, I would not choose Point Breeze. There’s nothing there. If I want to get coffee, there isn’t even a good coffee spot I can go to. No coffee, restaurants, and shops. Other houses around the same price range has all of that and more. Also, the fact that I’ll be surrounded with working people with similar wants seems more appealing than to wait for the shops to come and become established, vs having stores that are already established with more looking to move in.

Where’s my coffee? I have to walk to where? And in this neighborhood.. (From Yelp, most reviews, coffee)

VS

VS

Third, there is no safety net. I understand that it’s cheaper and seems like a good play. But if you really looked at it with an unbiased eye, you would see that other areas provide more cushion even if means paying more. If you been there you know what I’ll be talking about. Down one street of 40 houses about 15-20 were in different phases of new construction. There were wide eye new developers and flippers looking at properties talking to wholesalers. I didn’t see anyone around that area that looked like they could afford the 400k+ houses. So what happened?

Guys started running out of houses to buy in other locations and didn’t want to pay up for the project. So, they started to go to point breeze after seeing couple people do successful flips there. ” Oh that guy bought it for 210k put 70k and sold it for 400k?” “I can do that”

If you compare all the houses sold especially good condition house vs a brand new flip. Then you can see the difference being the biggest in Point Breeze. Also the comparison of people in pre foreclosure vs new construction ratio is the biggest in Point Breeze.

Point Breeze Sold house discrepancy

Fishtown

Brewery Town

Hopefully if you are already invested in there you can get out fast or hedge your bet somehow. If you figured out how to bet, please let me know how I can put this trade on.

These are my opinions only, do your own Due Diligence

Check out more of my analysis at

http://m31fund.com/

@Eric Armstrong

I didn't consider what the listing agent listed them for. I'll send you the material that helped understand how to do comps. I used to just take the house and past prices around the area for the previous 6 months.

If any one else wants it, just PM me.

The number one thing for getting the right comps are the supply numbers to see if you should price it above/below/at comps.

2month supply= seller hot market

4month supply= seller good market (keep up with inflation 3%)

6month supply= 0 movement

8month supply=buyer good market(lose about 3%)

12 month supply= great buyer market

so if the comps are 6 months old, and the supply# are hot, then you price it above the old comp.

So it's been about a month for those 40 properties to sell in Delaware and Pennsylvania.

Out of the 40, 14 are pending.

12 out of the 14 went within 3% of my range.

The 2 that went out of the range.

one was 4% off, and the other one was 13% off on a lower price property. 

So, I think my goal of seeing how to price went according to plan.

@Noah Scott I took the CE Shop online, it did the job. 

@Dustin Verley You can, and that's what I did as well. Also took mine at Concord. Their review sheet at the end was pretty close to the test. 

Elizabeth,

That same bidder is the guy who is controlling the deal. The bidder will make multiple bids on himself to jack the price up, if at the last minute no one tops him and he wins the bid, and put it back on the market the very next day. Also they have a reserve $ they want. So they will try to push it up to that amount. Hubzu is good, also auction.com and xome is good as well. 

Auction.com has about 40% of their listings on the MLS, while the other sites have it mostly all on the MLS. Which is the reason why if you look up the address on some of the auction ones, you can see 0 views.

Hope that helped. 

Wouldn't the Flipper want to deal with their own VA, instead of my own?

Chris, 

I think there is still some disconnect on what I do.  

In the last 3 months in New Castle county and Kent County in Delaware there was about 300 cash transactions worth on average 175k. In Chester and Delaware county about 500. In Philadelphia about 1400 cash transactions. 

That's a lot of investors, not including sheriff sales.

A lot of the transaction are REO deals and auction sites that are assigned by the asset managers from the bank and asset companies. They usually go 90-95 cents on the dollar.

For the rest of the transaction which are 70 % or below, it's serviced by a lot of different agents servicing alot of different people.  

I noticed the market, and decided to have our team set up to have the infrastructure in place to meet flippers needs after they purchase from wholesalers, auctions, etc  to when they list.

So our core focus is below.

1) Priced right (Getting the best price the market can offer)

2) Fast selling (holding costs)

3) Execution( Staging, Photography, Contractors if needed during the flip, asset loans, marketing, etc)

Also in Delaware its an attorney state, so the chemistry has to be in place other wise deals can blow up if the team is not glued.

Our problems are different from the traditional realtors, as I believe in specializing in one type of client to meet their needs more efficiently.

If we miss other opportunities by not servicing others, I'm happy about that, because that means we stayed disciplined and sharpen our edge.  

FB marketing ads would be under our marketing plan, but thats a slice of what's we do. If you have any other suggestions on how we can help Flippers make more money, or take away their stress. Please feel free to comment.

Regards,

David

Thanks Chris for the input. I'm curious, are you talking about the work in terms of buying the house? 

If so, all of my focus and structure is set in place to help the flippers list their house and get it out of the market. There are things I could do to help them get to the process. But, I can add the most value by being on the selling side.

So if the flipper bought the house from (auction, wholesaler, etc) Then if they need any of my connections I could help them and use my infrastructure to eventually list the flip. 

We are set for speed, right pricing, and creating demand on the listing side. So great fit for flippers, not so much for others. 

Adding Contractors to contact that are verified for my clients to use would be a good value add. Looking for any other value adds I can bring to flippers.

If you have any suggestions or questions, please feel free to contact me or respond below.

Regards,

David