Real Estate Investing In PA - Buying a Rental in the Philly Suburbs
Check out our vlog on our investment journey on buying a rental in the Philadelphia, PA suburbs!
What's up everybody! I don't know if you saw our series on buying a house in Florida, we did that and that's been going pretty well, so yeah we just got that rented from October to January 15th. We got renters coming in January 28th and then another renter coming in March 1st. So we're we're basically booked out until April right now which is great and we've been doing like the month long leases but we got five months, now three and a half months, a little over one month, one month, so it just varies. Anyway, it's kind of been a cool thing we're going down this weekend.
We're going to improve the property so redo some pictures, things like that, so i'm learning as I go, but yeah I think we can keep getting that rental income up. Anyway long story short, we've got that one now we're thinking about our next one and we're talking about doing maybe a short-term, medium-term, or long-term rental in the West Chester area. My wife and I are going to go check out a house today and maybe make an offer.
We've got to get our financing in place, we're a little behind the eight ball but i'm excited about our next investment. Hopefully we can make something that cash flows really nicely and works multiple ways either in short term, medium term, or long term depending on what we decide to do and what the township lets us do and all that good stuff. So stay tuned guys and check out our next series on buying a house locally here in West Chester, Pennsylvania for rental.
Video Transcript: What's up everybody it's Rob from Vanguard Realty Alliance, based out of West Chester, Pennsylvania and today i'll be talking about my investing in Pennsylvania journey and this is episode two so let's get into it. Okay so we saw a house we liked it was up for $375 but it got bit up and it just didn't feel like a good equity play to me anymore. i didn't really like that and we were able to find a loan but it was difficult. We ended up having to use a commercial loan, which is different than a personal loan and the terms are definitely worse.
So you know, like on a personal one maybe we'd be at like 3.25% on the commercial we're like 5.1% and we had to pay a point up front and if we sold it early we had to pay like a bunch of points. So like it was just like the terms were not fantastic on it and that also contributed us to not making an offer on that house because all the things just didn't really line up. The house was great but I think in this competitive market it just didn't work out. I'm also looking at a tiny house, checking that out maybe down in Delaware. It's kind of an opportunity just fell into my lap a little bit on that. We might be able to buy that one cash, we'll have to figure that out, but the financing that we're able to get right now is not great because our debt to income ratio is maxed on our personal income.
That has to do with how I did my taxes last year and how much income I showed on my taxes and how much real estate we already own. So anyway, the commercial loan did allow us to basically just say hey what's your credit score? What is the rent to debt payment ratio? As long as that was okay, I think they needed to be above 1.2, as long as that was okay then they would loan us the money. So at least we found some way to get the money but it's looking like we're probably not going to want to use a loan like that so probably keep our price point a little bit lower or try to go cash, one of those two. All right, so that's where we're at right now, it's October 12th. Come next year we're gonna have a lot more bandwidth on our personal debt to income ratio and that will allow us to get an easier loan or better loan terms.
Anyway the money is a big part of this and understanding how to get financing when you start maxing out your personal debt to income. So anyway it's cool we are able to find a commercial loan. If you need something like that feel free to reach out to me, i'll get you connected. That's what I got to say about investing in PA. See ya!
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