All Forum Posts by: John L Desimone

Hey @John Rody

Welcome!

1.)The areas I see that are having the most rapid growth in terms of a buy and hold are neighborhoods like Brewerytown, Strawberry mansion, Olney and Germantown. I am also seeing a lot of activity in the far northeast and southwest Philadelphia (Kingsessing and Elmwood park)

2.)Best ways to find a good contractor would to be to connect with other investors and see if you can get a referral. I also know a few contractors in the area that have worked for a few of my clients. 

3.) I work with an exclusive group of investors to source off market inventory in Philadelphia and the surrounding suburbs and get some pretty good inventory at a high volume in the neighborhoods I mentioned above. Sheriff sales, auctions and looking for FSBO signs are always a good source as well!

@Robert Palladino to answer your question. Yes I do. Kensington is one of my favorite pockets, in terms of appreciation and am already seeing signs of it trending in the right direction. Neighborhoodscout.com has Kensington ranked #2 in appreciating neighborhoods behind only a small pocket in the east part of Northern Liberties(E Girard and N Del Ave). My office is out of Northern liberties and Im submerged by new builds and constant new construction. Think of what these areas looked like 10-15 years ago. 

 Section 8 is not a bad route to take considering the current condition that Kensington is. I think your head is in the right place and that is the appropriate play. You can always sit on it until you see more rapid growth and then rehab it up to market value. 

Hey Rob, 

I have a few years experiance working in investment real estate in philadelphia and here are just some pro's and con's I have found with not only investing myself, but what I have heard from my clients. 

Pros;

1.) Reliable on time payments

2.) High Allowable rent increases 

3.) Fill vacancies faster

4.) Lower vacancy and turnover rates

5.) Potential for Higher rents 

Cons; 

1.) The bureaucracy can cost time and money, and delay new Section 8 tenants moving in. Worse yet, local housing departments often require extra steps in the eviction process, delaying eviction of non-paying Section 8 tenants. Which, in turn, means months of unpaid rent.

2.) Delayed Initial Payments-Sometimes your first payment can be delayed 2-4 months so you should account for months with no cashflow even after you get a tenant

3.) Tons of Inspections-This is the top reason many landlords do not accept Section 8 vouchers. An entire year of cashflow could be wiped out from repairs you have to complete from the high number of annual inspections.

4.)Tenant Quality- Without being said, yu get a lower quality tenant when using section 8

5.) Property damage- This one stems from the point above. With a lower quality tenant, you are at a higher risk of them damaging the property. 

Hope this helps! Feel free to connect with me and ask any further questions you might have!

Hey Brett, 

I can definitely relate to your situation. I was a double major in finance and economics at west chester university and knew I didn't want the redundancy that came with most career paths my peers were taking. I can say from experience, you are definitely in the right space. To answer your questions; 

1.) The only disadvantage I can see investing in these areas is finding the right tenant. Especially if you are doing section 8. I would spend as little as possible in the rehabs to limit your risk. 

2.)Like I mentioned above. Not hard to find tenants, but may be hard finding the RIGHT tenants that will pay on time, keep the place clean and not be a nuisance. 

3.) In a way yes, If you look at and compare listing and sold prices in a pocket, you can begin to notice trends in certain areas. Keeping up with certain market trends on yahoo finance, Housing wire and even here on Bigger pockets will tell you where investors are actively buying. I can speak to areas like Cobbs creek, Germantown and the far NE that, IMO, that have and will continue to see rapid appreciation in the coming years. 

4.) Neighborhood and block appeal are a factor but this is fairly irrelevant if you just research comps in the area. 

5.)Section 8 is not a bad idea because its a guaranteed tenant but most definitely a headache with meeting requirements and let alone the level of tenant you would get. 

Hope this helps and feel free to reach out if you have any further questions! Always happy to talk about REI!

Hello Alyse, 

Sorry to hear of the problem you are facing with L&I. I too have faced some of the same issues with getting a property ready for the market. Though this was frustrating, time consuming and costly, I learned a lot from this experience and found it a lot easier the second time around as I knew what to expect. 

I do agree with @SteveBabiak 's advice to start with the 311 and to maybe team up with an experienced RE rental investor in Philadelphia to assist you and answer any questions that you may have. 

I can assure you are not the only person having issues dealing with Philly's L&I. 

Hope this helps!