All Forum Posts by: Mike Rash

Thanks J,

Since this is my first, I am trying to be cautious and therefore investing CASH, giving me an opportunity to absorb any make mistakes that I might make :)

I am a bit concerned about abandoned properties on the near by street... but this is 'up and coming' area so I hope they will be rehabbed in the future...

I am purchasing my first rental in Philly and need your opinion(s).

Here are the facts:
Location: ZIP- 19125 - Kensington / Fishtown
Single Family - 2 Bedroom / 1 Bath - 900 square feet.
Completely Rehabbed in 2007 (all appliances are very basic, nothing fancy)... The house was sold in 2007 for $125k and then went into foreclosure 1.5 years later... The bank took possession and then eventually dropped the price to 75k, which I negotiated down to $58k.

So the final price is $58k (plus $3k in closing and etc) for 900sf which will rent @ $700 a month. The TENANTS will be responsible for ALL utilities. I will be responsible for taxes (only $300 a year) and insurance..

I am paying CASH for it, so there is no mortgage involved...

My main concern are the following:
1. Do the numbers make sense to you guys (they do to me - seems to yield about 10% ROI after all expenses)?
2. There are 2 abandoned houses on the other street... This seems to be common in the lower income neighborhoods in Philly... I just hope it does not spread to my street...
3. There is a house near-by being sold as SHORT SALE for 70k - but it is INCOMPLETE rehab and will require substantial investment (another 20k)... However it is much larger - about 1500sf.
4. Should I buy a fully completed house for $58k or try to buy a shell (abandoned house) for $10k and try to renovate it? ( I think it would cost about $40k to completely renovate).

Any advise is really appreciated!