My Second Investment Property: An Affordable Flat in Philly (Philadelphia, PA)

Whenever I tell people that I purchased a property in Philadelphia, they always ask me, "why Philly?"

In addition to Philadelphia being an appealing location in terms of proximity to universities, hospitals and an international airport, I wanted to buy in a place that was out of my comfort zone. I knew absolutely nothing about Philadelphia, and I had never been to Pennsylvania. That is, until I got into contract on my condo there.

The goal of the Philly purchase was for the property to serve as a stepping stone to eventually investing overseas. I wanted experience managing a property from a different time zone, in an area that I was unfamiliar with.

"The goal of the Philly purchase was for the property to serve as a stepping stone"

When I got into contract on the Philly condo, it was a similar story to how I came to buy my place in Arizona. I found the property on Zillow, sent it to my realtor, wrote an offer below the list price, negotiated a little bit, and then entered into contract.

The condo was originally listed for sale in October of 2017 for $175,000, and it was on and off the market for three years. By the time I got into contract on it in December of 2020, the price had been reduced to $159,998. But after our negotiations, the final contract price was $145,000 ($15,000 less than what the seller originally paid for it in 2007).

My realtor actually advised me against buying this property since the building was old and had a poorly run HOA. In addition, 2/3 of the units were owned by one investor, which made it extremely difficult to get a loan. But I ignored her and bought it anyway because I thought the numbers looked good.

When I bought my AZ condo, my main goal was to prove to my dad that I could manage it from afar without having to set foot in the state. And even though I was able to accomplish that goal of not visiting the property after closing, it took a very long time to get up and running. If I had removed my ego sooner, and simply visited the property in person to prep it for rent, I could have avoided paying $3,000+ for the three months of vacancy.

I could have just flown from California to Arizona, bought and assembled all of the furniture myself, and it would have gone a lot faster than ordering it all online and delegating everything to a not-so-great handyman. Luckily, one of my Phoenix friends (who also owned a STR) offered to help me finish furnishing the place. Because of him, I was able to get the place rented when I did. If I had stayed with the original handyman (who incorrectly assembled some of the furniture, which my friend had to take apart and reassemble), it would have taken even longer to list on vrbo.

"I didn't want to dilly-dally and waste time getting it rented"

So in an effort to not repeat the same mistake, I flew to Philly the day after I closed on the condo. I didn't want to dilly-dally and waste time getting it rented like I did with AZ.

After having my AZ place on vrbo as a short-term rental (STR) for over a year at this point, I saw how unpredictable and fluctuating the income was, which is why I decided to list Philly as a long-term rental. Also, it is expensive to furnish an empty place - even if it is only 396 square feet. By not furnishing the space, I was able to save a few thousand dollars in up-front costs, compared to AZ, which cost me about $7,500 to fully furnish and decorate.

While I was in Philly, my virtual assistant (who lived 15 minutes away) became not-so-virtual. We got to meet in real life, and she was an integral part of the process. She helped me not only physically prepare the property, but she also found the tenant through her network on Instagram. And while we were in contract, she even knew the owner who was selling the condo! She was the best teammate I could have ever asked for in this fun, Philly-based adventure. In fact, part of the reason I bought the property in Philly was because of her.

She had an interest in real estate, but she wasn't sure what specific component of the industry appealed to her the most. So I figured we could both use this property to learn more about the real estate investing and property management aspects of the business.

During the 5 days I was in Philadelphia after closing, she and I painted, added peel-and-stick wallpaper, changed the locks, fixed a few things, and most importantly, we met with the prospective tenant and her mom.

They were the only people we showed the property to while I was there, and they ended up signing a contract for a 1-year lease. It was a very efficient, well-spent 5-day trip.

Since that trip, the condo has been rented to the same, wonderful tenant. I'm very thankful that she has been there for almost three years now, and that she is so great. She never complains, and she pays her rent on time. What more could I ask for?