All Forum Posts by: Jonathan Dempsey

@Andrew T. @Tina Gao

I work in Jersey City but decided to start my Portfolio in Philadelphia. The market in some neighborhoods has been appreciating well and the numbers work as Philly has relatively low taxes to NJ.

It also feels better purchasing a home for $200K-$300K instead of a shoebox. Feel free to reach out to me if you’d like to chat!

@Clarence Johnson, from the consumer perspective it is fantastic.  The returns are also good for investors and can be passive if scaled and managed correctly

It may be tough to buy into Point Breeze or Brewerytown on that budget unless you want a bit of a project.  I would look more toward Mantua, Powelton Village, and Cobbs Creek as the prices there are still more in tune and the locations make sense to prosper.  A decent amount of development going on as well.  Point Breeze and Brewerytown are undoubtedly two of the hottest neighborhoods in Philadelphia right now, both moving fast with plenty of room to grow yet if you can stomach a higher purchase price or something needing some work. 

@Alex S.

What prompted them to suggest 3 months upfront (unless you mean first, last, security)?

This does sound like one of the scams found in other posts where someone volunteers to move-in and send a check. Then something “comes up” and they can no longer move. They ask you to send the money back or part of it (your money because their check turns out to be fake).

If something seems off to you then it probably is. Why would they want to move if the wife still works in another state and the husband can live anywhere?

@Tim Schroeder

Great to make pre-tax comparisons. Also, the issue with the ROI analysis here is that you have to either analyze on a cash basis or not.

Cash on cash return here will be determined by whatever profit was over whatever initial payment was made. So if he was all in at say $50,000 (clearly didn’t pay in full if theres that large a mortgage payment looming). $20K profit in a year would be some serious cash on cash return (40%).

If you would rather look at it a different way and ignore the financing to make apples to apples amongst properties, use cap rate of the net income over the purchase price. Which here looks to be $40K over $200K (20%), still solid. Numbers like these seem high as investment returns, partially because STR is more time investment, more risk, and less liquid than alternative non-RE options.

Hi @Andrew Burt, congratulations to you and your family so far.  Sounds like you are in a great position.  $3500 in rental revenue from $700,000 worth of property does not sound optimal.  If you are looking to turbo charge the business as you say, it would be optimal to sell these properties, retain the capital, and position yourself into more lucrative holdings.  How you move forward will depend on your stomach for leverage.  Even with no leverage you could find yourself in position to net more than $2500 a month on $700,000 invested.  

I have spent some time looking at Yardley and Newtown recently, this market is tough.  There were a few multis that had potential, one is now under contract.  The other is interesting but could use updating.  I am honestly not too familiar with the other markets you have mentioned.

I choose to mainly look at deals within 10-20 minutes of center city as it keeps the tenant pool large and it is possible to find properties that achieve the 1% rule or close to it.  Typical the lower class the area, the higher the returns, and in Philadelphia I believe the sweet spot is in B and C class neighborhoods.  For those interested in A neighborhoods only, it is possible to find deals, they just might be less frequent and need more elbow grease.  As a bonus and something to consider, many of Philadelphia's neighborhoods near center city are going through tremendous revitalization.  Rents and equity in these areas can rise after purchase, making decent or good deals phenomenal.  Certainly not something to bank on, but for me is a good tie breaker when choosing an area.

@Joshua McGowan

@Joshua McGowan Sounds like you already have the hardest part of real estate tackled in that you've done your research and saved up a down payment.  50-60% is in my opinion not going to elicit much response relative to your time.  Of course each property is different and has its own story, so maybe you could pull of 10-20% below list price.  

I do find many of the bigger pockets podcasts to be outdated in terms of market expectations.  Philosophically there is so much to learn from the podcasts, but it is definitely necessary to try to compare apples to apples.  

What areas have you been checking out in particular?  

@Paul Quinn welcome to the game!  Excited to see you prosper with all the knowledge you have been acquiring!

@Ashley Wolfe

What other platforms are you on? If not on all of them, you could try to do a search on google for platforms and get registered on each one.

You could also play with your pricing a bit. If you lower it slightly and start to see some action, then maybe your price is just a bit too high. Also compare to other listings to see if you are priced competitively. If you are kind of in the middle, you might have to wait for the lower competitors to go first.

Don’t sweat it though because most people will probably be making reservations in the next month or two.

I wish you the best with it!

Jonathan