Well, finally something that’s been touted here at this blog site for several years is proving to be true, although it comes to no surprise for those of us seeking, wholesaling and purchasing cash flow real estate investments in Philadelphia and the region. 

Based on a Zillow “Home Value Index”, a slideshow released last week on CNBC’s website has two Philly zip codes coming in at second and third place in the U.S.

Philadelphia homes in the South Philly zip code of 19145 (# 2) has seen a “year-over-year price growth of 19.1%“, while the zip code of 19148 (#3) has seen a “year-over-year price growth of 16.9%”. 

At sellphillyproperty.com , we have wholesaled and purchased ourselves cheap investment houses in these zip code areas over the years.  We presently have an investment property in 19145.    They have become great cash flow investments for our real estate property investor client base.  There is also a spill over effect from these zip codes too.  With Philadelphia Zillow’s one year home value going down only .1%, there have been pockets of Philadelphia investment homes being purchased at great values resulting in cash flow and equity. 

These are the zip code areas neighboring 19145 and 19148.  The various neighborhood growth developments being acted out in the Philadelphia Northern Liberties, University City (19104 # 14 with 13.5% growth), West Philadelphia, South Philadelphia, Temple Univ. – North Philly, Nicetown/Logan (Temple’s newly opened medical school)  and parts of northeast Philly, are undeniable.

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$211 million – that’s the number that will go to urban areas of over 200,000 population in Pennsylvania from the $27 billion Federal stimulus funds.  $ 30 million is for mandatory “transportation enhancements”, which include projects such as sidewalk repairs, bicycle paths and beautification projects, according to a Philadelphia Business Journal article.

As the article states, these projects “don’t involve vehicle or mass transit related items”.  As we seek investment properties, we have seen the resurfacing of streets and repaving of sidewalks already.  These projects have been attractive to property investors looking in Philadelphia for the past several years and add to a neigborhood’s value.

Areas in Philadelphia such as the Market Street El corridor have already been worked on.  Arch Street and a good number of the smaller streets running north and south have have been repaved (Arch with even a bike path) with new sidewalks.  After many years, the Market St. el project is in it’s final stages.

Cash flow investment properties are available on the north side and south side of Market St.  At the present time, we have an investment property in the 57th & Market Sts. area.  It can be acquired under $ 30,000 and about $ 25,000 in rehab work.  After improvements, equity will be about $ 20,000, with positive cash flow every month after refinance.

On the south side of Market St., we have a property available on the 200 block of S. 57th St. The ARV will be $ 120,000 after rehab - it can be purchased for $ 42,000 and needing $ 38,500 in improvements. This property will also translate into positive cash flow and equity of $ 30,000.  We also have one available in the 60th & Chestnut Sts. area.

There are many that would say that this stimulus package will not create jobs or really help the economy.  I’m not here to argue that.  What I am saying is that the stimulus money is coming - like it or not.  Position yourself to take advantage of it and help your personal economy and financial future.

If you’re a real estate investor, it’s been a tough go in the last few months when it comes time to refinance your investment property.  But things have changed in the last 2 months that can increase an investor’s cash flow rental property.

The investors that we have wholesaled our investment properties in Philadelphia, as well as our own properties, have seen the rates come down to nice levels.  The cash flow potential as increased with these lower rates and terms.  On top of that, effective March 1, 2009, Fannie Mae has lifted the 4 property financed property limit to 10.  Although the qualifications are still a bit tough, as Skip Lucas comments from Creative Mortgage Broker.

One of our financial sources, MAC Investments,  has a refinance program of 4.87 %, 30 year with 1 point.  MAC Investments has both hard money and refinance programs. Of course it depends on your own situation, credit score, income, etc. 

To have seen rates like these just 2 months were unheard of.  When we refinanced two of our properties in late December, our rate was 6.7% for 25 years.  That was great!  Back then.  How things change in two or three months.

In all, for those that are active real estate investors, these terms will be able to add to your monthly cash flow – your bottom line.  The best thing to do is contact SEVERAL finance sources and see what they have.  Check out our website for some sources to start with.  Click on the “Refinance” and “Hard Money” buttons on the left.

One of the things we’ve seen over the years is that an investor will call ONE bank and get a lousy rate quote or strict qualification limits and then say that they can’t refinance.  It’s like shopping for a TV – you go to several banks (preferably small ones), call several financial sources, and see what’s available.   AND DO THIS WHILE YOU’RE LOOKING for an investment property, not when the rehab is done.

Last Friday, Fannie Mae rolled-back one of its least popular mortgage guidelines updates of the last 12 months.

Effective March 1, 2009, real estate investors can once again own and finance up to 10 individual properties.  The restriction reversal does come with new minimum requirements, however. 

Homeowners buying a 5th, 6th, 7th, 8th, 9th or 10th home must meet the following standards, as set forth by Fannie Mae:

1. 720 credit score
2. 25% downpayment for a 1-unit (30% for a 2-4 unit)
3. No mortgage delinquencies in the last 12 months
4. 6 months of reserves for each investment property

In other words, Fannie Mae is re-opening the lending spigot for real estate investors with good credit, a sizeable downpayment and ample reserves. 

According to Fannie Mae, the change rationale is that experienced investors can “play a key role in the housing recovery”.  Until now, foreclosure auctions have gone at less than full speed because investors unable to pay cash have been halted by the existing 4-property Fannie Mae limit. 

Going forward, expect a more expedient foreclosure liquidation nationwide which should, in turn, provide further support for the housing market.

And lastly, not to be forgotten, homeowners with more than 4 properties can finally participate in the ongoing conforming mortgage Refi Boom. Until now, they’ve been stymied by the 4-property restriction, too.

This decision gives confidence to the real estate investors out there whose goal is to build a portfolio of properties and a substantial passive income.   Contact us at Sellphillyproperty.com and take a look at the real estate investment properties we have available with positive cash flow.  Some can enter or add to their portfolio with limited or no cash of their own.  Call or email us.

Investing in Philadelphia residential real estate? Despite news reports about a downturned real estate market, it seems that Philadelphia is bucking the trend.

   In a Philadelphia Business Journal article from January 7, 2009, ” the Philadelphia area bucked not only a national trend but a Northeast trend as well, as activity in the Northeast region fell 7.2 percent from October to November, and was down 14.6 percent in November compared to a year earlier.”  The index used “increased 24 percent” from October to November.

When considering purchasing investment property – consider the Philadelphia area.  It has one of the country’s lowest percentage of real estate taxes and with it’s business growth and the uniqueness of having four medical colleges within the city limits.

Philadelphia is one of those unique and best kept secrets for finding real estate investment properties.  We specialize in finding and wholesaling investment properties that show a monthly positive cash flow and in many cases, extra cash back at refinance.  To see our current list of available investment properties, go to our website.