All Forum Posts by: Erica Gordon

Quote from @Marlia Stone:

@Erica Gordon Hi Erica, this was a great thread to read. I am currently in your position in the Philadelphia area as well and I would love to hear about your journey in Philadelphia for a Duplex. Let us know how it goes!

Hey I just stumbled across your comment again and figured I’d give an update! So I closed on a multifamily last year in June! By using an FHA 203k loan I accrued instant equity of almost $100k in the property. I am going to refinance, pull some of the equity out, and do the process all over again sometime this year. I’m interested to know how your real estate journey is going as well! (: 

Hey bigger pockets community, 

I’m having a bit of a dilemma. I have been searching for a quality tenant since January.

(If you do not want to read this entire post, please scroll down to my questions at the bottom labeled “These are my main questions”.)

Firstly,I am new to this process! I am renting a newly renovated, 2 bedroom, 2nd floor unit in the North Philadelphia area. I have promoted the unit on multiple sites, with Zillow being the most useful. 

The problems I keep coming across include: “no call, no show”, bad credit, fake paystubs, etc. The winter time was pretty slow (as expected), and inquiries have picked up since spring has begun (also expected).. but I am still running into the same issues. I am getting more inquiries but not more viewings. Most people will contact me very interested, some even submit applications, but do not show up for the viewing or respond when I reach out to them. 

I have gotten to the point where I have began contacting management agencies, but guess what!? Even they suck at responding! 

I’ve also had situations where the applicant would show up for the viewing and submit an application, but because I have not considered them because of their credit score and they do not make 3x the rent. This makes me wonder are my qualifications/ standards too high for the area I am renting in..?

Well here I am.. back on bigger pockets, hoping that someone here will be the answer to my prayers.

These are my main questions:

• If the applicant’s background check and eviction record are both clear, should I still hold the credit score so highly? Especially in the North Philadelphia area? 

• Any pointers on screening tenants as a private landlord? Would you decrease your qualification standards for a C class area? 

• Can you refer a Philadelphia based agent or property management company to assist me in finding a quality tenant? 

Please leave a reply if you have useful information to share.

Thank you for reading! 

@Kahleah Manigault hey I just came across your post and thought I should reach out to you being as though our paths are similar. I am 24 & I just closed on my first duplex on June 24th in Philly. I also used a 203k loan, and I am currently getting renovations done to both units while occupying one of the units. I am in the stage where I am getting my licensure together (hence why i landed on this post), and I’m soooo ready to start getting this mortgage paid for by a tenant! So just wondering, how was/is your experience finding a tenant?
Btw it’s so refreshing to come across another young woman in Philly who’s investing in real estate! 

Originally posted by @Maritza Pedlar:

@Erica Gordon Hi!  So their current rent doesn't cover everything. I kept the existing lease agreement with the tenant I inherited, however, I plan to raise it in the future since the unit can yield and extra 100-200 a month (which would cover the entire payment).  But even with coming out of pocket a bit each month it has allowed me to save substantially more and plan for my next investment.

  My offer was accepted over the weekend & I am currently on contract for a duplex in the 19140 area as well!! (Yayyy) This is the property I was saying I might have to put a little bit of money towards each month.. So getting a response from you about your situation makes me feel even better about my decision. these house-hackers on YouTube be talking about how their tenant covers everything PLUS they’re making profit, but that just doesn’t seem realistic in this market lol. 

Originally posted by @Maritza Pedlar:

@Erica Gordon Thank you!  Also, I would also adivse to look at how quickly units get rented out in the areas you are looking at if you are debating whether or not to go all in on a property.  I would go on apartment search websites and see how long units were listed, proportion of inventory that was occupied with renters, etc.That helped me make some decisions as well.  My rationale was, just because buyers were competing didn't necessarly mean that renters were prioritizing a duplex-type apartment when searching for housing.  

Happy searching, and look forward to seeing you settle!

Thanks for the great advice! I am wondering does your tenant completely cover your mortgage PLUS whatever extra payments come with the mortgage such as home insurance, PMI (if you have that), taxes, etc.?? I'm trying to figure out if I should put in an offer for this property that would most likely require me to put $100 of my own money toward the monthly payment. that's not a lot of money, I would still be saving a lot more money each month, but just curious to know if you're monthly payment is covered completely?

hey I’m just getting started on my house-hack journey with a duplex.. I see this post is 4yrs old and I’m curious to know where you are in your journey. how many rental properties do you have now? 

Originally posted by @Maritza Pedlar:

Hi @Erica Gordon I purchased a duplex 19140 at about the price range you are interested in using FHA 3.5% down.

It took me about 3 months to find my first duplex, but I did put in about 3 offers until I landed with one! I viewed about 3-5 properties a week, but only if the numbers made sense. But I did a deep dive on the numbers for about 10 properties a week.

For my duplex, the seller listed it for a really fair price anticipating a cash buyer.  So I put in a offer with a 5k escalation clause which ended up working out.  I ended up not having to escalate the price, which was great so my original offer stood up and was accepted despite there being multiple bids. FHA did drive the seller crazy, and he almost wanted to pull out of the deal...but we made it!  

The escalation clause really worked out for me since I noticed my previous offers were typically beat out by a a few thousand... but I hated the idea of coming in too high for an offer just due to competition.  My only word of advice is to not be over zealous due to a competitive environment. I still drive by properties I liked and bid on, and think "what if." But honestly, what BiggerPockets taught me was to stick to the numbers and not get to emotional about things...this is NOT my forever home. 

This duplex checked all my needs vs. wants, and I have not had an issue with the house at all during my first year!  Tenant pays on time and every time (even during COVID), and this home is serving its purpose of relieving financial burdens through house-hacking & getting my start in real estate investing :-)

 Thanks for the feedback Maritza! We recently put in an offer w/ an escalation clause and we were still outbid 20k by a cash offer SMH. people are overpaying for these properties, but I’m gonna stick to my guns & remain patient. 

You are doing exactly what I am working towards! FHA, house-hacking an owner occupied duplex, escalation clause, in Philly, etc. It's great knowing that everything's working out for you, that gives me a bunch of inspiration!

Originally posted by @Shawn Mcenteer:

@Erica Gordon need to shop around around with the smaller banks... these loans exist. I wrote a blog post on it recently, that touches on the importance’s of finding this type of loan.

Are there any smaller banks that you can recommend?  

Originally posted by @Shawn Mcenteer:

Originally posted by @Adam Regos:

@Chelsea A. You were able to do conventional financing 5% down on a duplex? Lenders and local credit unions have been telling me 15% minimum for conventional owner occupied.

3% down conventional is my go to for owner occupied MFR... Great loan especially if you have cash and are willing to renovate. Keep the liquid cash and increase the value.

So Shawn you’re saying there’s a 3% down conventional loan for an owner occupied duplex? Where can I find that? 

Originally posted by @Elizabeth Cook:

I've not been looking in that area but I am having similar issues where I am looking - people are paying cash and/or well above asking price. This is the most competitive market I've ever been involved in, in the US (except in tertiary cities.)

With the extremely low inventory, it seems to me that your experience is frustrating but normal. While I appreciate the advice to look at 10-15 duplexes a month, I’d be surprised if you can find that many. I hope you do!

I am diligently looking in 2 different cities every single day and sometimes a week goes by with only 2 eligible properties. Like you, I have a very stringent budget. I am not willing to overpay, because I believe that R.E. fundamentals are skewed and I’d rather wait for a right property than rush into a wrong one.

 Yesss I saw someone say look at 10-15 per month, but I’m lucky if I get to see 1 property every 2 weeks!
Thank you for reminding me that the frustration I am experiencing is “normal” in this market right now. It’s refreshing to be able to relate to someone during this strenuous journey. Thanks for sharing Elizabeth!