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How to Figure out the Net Proceeds after Selling Your Home

Are you clear on your potential bottom line if you decide to sell your house? It is a good idea to understand your net proceeds before you sell your house to avoid surprises near the closing date.

In this video, I will break down how to figure out how you will make after selling your house. We will review the major line items included in closing costs to calculate your net proceeds.

[0:00] Intro and overview of understanding your net proceeds
[1:33] Starting with the final sales price
[2:32] Subtracting outstanding mortgage balance
[3:20] Why it is best to learn about outstanding liens early
[4:35] What paying the broker’s commission covers
[6:00] How are transfer taxes calculated
[7:12] Wrap up to maximize your bottom line

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Greater Philadelphia Home Seller’s Checklist-Important Paperwork Required to Sell a Home

In order to sell your home in PA, you will have to either complete or provide a lot of paperwork, whether you decide to use a realtor or not. If you do not complete the required documents in a timely manner, it can cost you money or risk the entire transaction.

Watch this video to get a head start of the paperwork you will need when you are ready to sell.

The documents discussed in this video are:

Seller’s Disclosure document in Pennsylvania
Preliminary Title Report
Mortgage Payoff Document
Power of Attorney Agreement

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West Philadelphia Real Estate Market Update July 2019

Do you want to know the West Philadelphia real estate market trends that could affect you as a buyer or seller? In this video, Veronica Woods of Daniel Woods Real Estate shares statistics on homes sold, pricing and inventory for the neighborhoods of West Philadelphia, including Cobbs Creek and University City.

This Philadelphia Real Estate Market Update uses data from July 2019 from Bright MLS.

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Buying a Multi-family (Duplex or Triplex) as a real estate investment

In this video, I will focus on the benefits of investing in small multi-family properties- duplexes, triplexes, and quadruplexes.

Watch this video for tips to about how you can buy a duplex or triplex to start your investing career.

[1:35] More financing options
[2:40] Revenue opportunities
[3:16] Tenant risk
[4:05] Economies of scale
[4:50] Less competition
[5:55] Challenges to investing in duplexes, triplexes


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Selling your home while you live out of state

Selling your home while you live out of state

You can sell your home while living out of state without stress. Whether you have relocated before selling your home or inherited a home out of state, it is possible.

Watch this video for tips to sell your house when you live in another state from your property or hundreds of miles away with the right support.

[1:05] Get eyes and ears on the ground to examine the property before you put it on the market.
[2:00] Think about how you will communicate from a distance.
[2:43] Getting help to prepare the property
[3:23] system in place to monitor the property
[4:25] Picking a realtor
[5:55] Bonus tip about an accountant


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Should I downsize or stay put in my home after retirement?

If you are a senior, you have many things to consider to help you decide whether you should stay put on downsize. In this video, I will review how to ask good questions to help you rightsize.

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Why You Should Add a Multi-Family Property to Your Portfolio

Have you thought about adding a multi-family property to your portfolio? The property in the photo above is an example of a current opportunity (as of 5/8/18) of a 5-unit property for sale for $315K with over $4,300 in monthly cash flow.

If your goal is to build up your real estate income stream, multi-family investing is a good path to get there. This blog post covers some benefits of buying a small multi-family and shares some sales trends in the Philadelphia metro area.

Often, new investors equate multi-family investing to owning a large apartment building that requires a full-time maintenance staff. That is not always the case. The definition of a multi-family property is much broader. Real estate professionals break down the multi-family asset class into three general segments:

  • Plexes (2 to 4 units)– Most small investors get started here. These properties are considered as residential properties by the banks when evaluating financing options. Municipalities tend to impose similar rules for landlords of plexes and single-family rentals.
  • Small Apartments (5-50 units) – Some small investors (by themselves or with investment groups) move up to invest in small apartment buildings. These properties require commercial financing which require more detailed cash flow projections. Municipalities place more requirements on how these buildings are operated and where they can be built.
  • Large Apartment buildings (Over 50 units) – These properties are most often owned by larger real estate investment companies or institutional investors. The commercial financing and municipality requirements generally get more complex.

Since most small real estate investors start with 2-6 unit properties, we will cover some of the top benefits of investing in this smaller brand of multi-family property:

  1. More revenue opportunities  – Beyond rent, you can collect revenue from providing other services to tenants such as coin-operated laundry machines, storage units, private parking spaces, and other concierge services.
  2. Spread risk over more units – When your cash flow is dependent on one tenant paying their rent on-time, there is more risk that your property’s income. When you own a triplex, one bad tenant does not wreak havoc on your cash flow as long as you have two other good tenants.
  3. More favorable financing terms – One unique opportunity for investors with a duplex or triplex is get more favorable acquisition financing by agreeing to live in one unit for a period. Not only is your tenant helping you pay your mortgage but you are able to put less money down than the traditional non-owner occupied investment property.
  4. Economies of sale – Labor and material costs for maintenance items can be spread over more units. If you have three single-family properties with bad roofs it will be more expensive to repair than one triplex. It is also easier to get contractors to view problems at one address vs. single-family homes scattered across town.
  5. Less competition – In general, there are fewer people looking at multi-families in most markets. You are also less likely to get into a bidding war to acquire the property. Your competition is likely other investors who are equally-motivated to secure a good financial deal vs. a new homeowner who may bid using more emotional factors.

If you want to pick buy a multi-family property, you have to target the neighborhoods that have the most inventory (and favorable zoning). The tables below show the areas with the most transactions from 2017 in Delaware County and Philadelphia.

2017 Multi-Family Settled Transactions (Source Trend MLS)

2017 Delaware County, PA Multi-Family Sales

 Units Sold
Upper Darby26
Drexel Hill23
Clifton Heights17
Ridley Park8

2017 Philadelphia Multi-Family Sales

 Units Sold
19121 (Brewerytown)95
19111 (Northeast)81
19124 (Northeast)71
19139 (West Philadelphia)62
19144 (Germantown)58
19149 (Northeast)58
19104 (West Philadelphia)57
19143 (West Philadelphia)57
19135 (Northeast)51
19120 (North Philadelphia)50

Top Delco Multi-Family Sales Details

 # of Sales% DuplexesAverage Sale Px per UnitMin Sales Px per UnitMax Sales Px per Unit% Cash Sales
Upper Darby2685%$56,979$22,555$80,00046%
Clifton Heights1776%$51,719$23,750$87,50053%
Drexel Hill2396%$69,544$48,500$95,00026%

What about investing in single-family properties? Of course, there are plenty of reasons to invest in single-family homes, including 1) lower price entry point, 2) Multiple exit strategies, and 3) Better price appreciation. I am pro single-family investing, too.

However, I think more investors should consider BOTH single-family and multi-family investment opportunities on the quest for more financial freedom.

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Defining Real Estate Investment Criteria-Part 3

So far, I have covered Location, Property Type,  and Type of Tenant in Part 1 and Property Condition in Part 2  in my series on defining real estate investment criteria.

In this post, I will cover the fuel to wealth creation, FINANCIAL METRICS. A grasp on the financials is what separates investors from traditional home shoppers. As a fellow investor, I know that it also helps you sleep well at night after a deal. I encourage my clients to get better at crunching more numbers on paper before even viewing a house.

There are many potential ratios and estimates to calculate, but I will start at two that are critical for the determination of profit.

It is common for seasoned investors to say that you make your money on the buy, not the sell. When you estimate the ARV, you take a view on the future value of the property when you are ready to sell or refinance. The conservative approach is to base your estimate on recent sales with similar size and rehab condition and only modest appreciation. It is hard to make up ground after making too lofty an assumption later.

Once you understand the ARV, you can begin to determine a purchase offer strategy.  Many investors shoot for a 70-80% discount off the ARV in the Philadelphia area on rental properties and an even deeper rate for a flip to allow room to finance the expected value-added repairs. Similarly, a motivated seller targeting an investor buyer would be wise to consider an asking price strategy that leaves some of this value on the table.

In the end, you have to make sure that your rehab costs plus your purchase price don’t exceed the ARV.  Your profit wiggle room can quickly disappear if you don’t factor in a worse case scenario in your more detailed rehab estimate that includes both labor and materials. Fortunately, the older housing stock around Philadelphia allows for many opportunities to profit with value-added repairs.

For rental properties, the market rent defines your income ceiling. If your income forecast is based on fantasy monthly rental rates for the area, you can run into trouble. I recommend that you factor in the rent that the middle 80% of the tenants in your area are willing to pay.

Often, there is an opportunity to increase the rents from the previous owner. I have observed that many motivated sellers have tenants in place paying below market rents. One way to justify higher rents is through making cosmetic repairs. However, there are limits to the feasible rent boost based on the geography, as discussed in the first post in the series.

I encourage you to share your thoughts on your ideal targets for ARV and rents with your agent early. Instead of just saying “send me a good deal,” you can say that you say “watch out for homes in neighborhoods with properties worth $75K per unit fully rehabbed and rental rates around $1,200 a month”.

To wrap up the discussion on financial metrics and criteria, we will review two more real estate benchmarks in the next post.

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Real Estate Wisdom Update-12-21-17

Wealth. Legacy. Lifestyle.

Whether you are a reluctant landlord or emerging investor, this newsletter is for you. You can count on the Real Estate Wisdom newsletter to provide the inside scoop from talking to buyers & sellers, studying the market trends, and following what is going on at local city halls. 

If you think this info is useful, remember to share.

Action Inspiration

I have been impressed with the urgency of doing. Knowing is not enough; we must apply. Being willing is not enough; we must do. Leonardo da Vinci

Here are my latest 5 Points of Interest about the Philadelphia metro area and final November market statistics.

5 Points of Interest

1)The Philadelphia metro area needs more permanent housing solutions for veterans and their families.

The region’s handful of affordable housing earmarked for veterans, such as Buchman Meadows in Chester and the newly opened Spring Garden School project in Philadelphia, do not address the shortage.

On a smaller scale, owners can participate in the HUD-Veterans Affairs Supporting Housing program (HUD-VASH) that combines the traditional rent voucher with case management and clinical services provided by the VA.  Like the regular HUD voucher program, your property must pass an inspection. Once your unit is deemed eligible, you can promote your property to potential tenants through the VA and other affordable housing tenant networks.

Note, both the Delaware County Housing Authority and the Philadelphia Housing Authority administer this program, click here for the Veterans program Landlord fact sheet.

2)We are positive about Buy and Hold opportunities in 2018.

The demand for safe, affordable rentals is strong for working-class residents in the metro area for units at the $800-$1,200 price points. Within the older housing stock, there are great single-family and small multi-family rentals. Finding good tenants at that price point is just a matter of screening takers.

You don’t necessarily need to add high-end amenities to satisfy this group. Most importantly, the math may not work for you.  Many of the new construction units on the market go for more than the average Philly area renter to afford (or an average November rent for a 2 Bedroom Philadelphia apartment of $1,745, according to Rent Jungle).

The bottom line is that there is still money to be made serving the working-class market.

3)West Philadelphia is hot.

The recent multi-billion investment in University City (i.e., Schuylkill Yards near 30th Street Station, U-City Square near 36th & Market, and the 40th Street Trolley Portal project near Baltimore Avenue) will continue to drive home values up further and further west.

Take a look at the trend in sold prices between 2013 and 2017 YTD (source Trend MLS). We compared the low and high sales price from 46th Street through 56th Street between Chestnut and Spruce Streets.

Low High Average
2013 $20,500 $278,125 $142,908
2017 $58,005 $370,000 $198,784

4)We are keeping an eye on regulatory changes for short-term rentals (Airbnb).

Safety concerns, security, and lost tax revenue have been other reasons cities have been tempted to impose more boundaries around short-term rentals. Even though the last changes in the Philadelphia code was in 2015, it is important to track pending changes in other cities.

Recently, Seattle passed an ordinance that restricted the number of homes owners can operate as short-term rentals to two: their primary residence and one other. Seattle justified this change to protect the supply of affordable housing units for families who want to make the city their permanent home.

The Airbnb business model may remain an attractive revenue stream in the Philadelphia metro area in the short term until municipalities pass new restrictions.

5)You may be paying too much in property taxes in Delaware County.

In some of the suburban communities, the owners are not only underwater with their mortgage, but they are also over-assessed in taxes. Some owners feel the pain worse than others.

In Delaware County, about one-third of owners are over-assessed, with the highest rates in Darby (taxes based on 216% of market value), Marcus Hook (tax taxes based on 203%), and Upland (taxes based on 226% of market value), according to the Philadelphia Inquirer.

Earlier in the year, the Delaware County courts voted to complete a reassessment across the entire county by 2021, the first since 2000. To make your case, you need to get an appraisal to prove your current market value.

November Key Market Statistics

(Statistics shown are for rolling 12 months)

(19143) West Philadelphia-Cobbs Creek/Cedar Park

 NOV 16NOV 17% CHG
Total Sales4204200%
Lowest Sales$10K$11K13%
Highest Sales$1,545K$949K -39%
Average Sales$141K$137K-3%
Days On Market354220%

(19104) West Philadelphia-University City/Mantua

 NOV 16NOV 17% CHG
Total Sales14016719%
Lowest Sales$13K$14K8%
Highest Sales$2,400K$1,250K-48%
Average Sales$268K$239K-11%
Days On Market5038-24%

(19139) West Philadelphia-Walnut Hill/Haddington/Mill Creek

 NOV 16NOV 17% CHG
Total Sales19325231%
Lowest Sales$7K$5K-29%
Highest Sales$775K$607K-22%
Average Sales$82K$91K11%
Days On Market6349-22%

Upper Darby

 NOV 16NOV 17% CHG
Total Sales913100610%
Lowest Sales$14K$17K21%
Highest Sales$425K$435K 2%
Average Sales$122K$130K7%
Days On Market8261-26%


 NOV 16NOV 17% CHG
Total Sales11917043%
Lowest Sales$6K$5K-9%
Highest Sales$165K$255K55%
Average Sales$45K$52K14%
Days On Market7455-26%
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Defining Real Estate Investment Criteria-Part 2

In the last post, we covered how investors evaluate where to invest and your options for the type of property and tenant before selecting properties. In this post, I will review how to define investment criteria and due diligence around the next criteria:


Unless you are considering investing in new construction (which has its own challenges), the property likely has some defects which can range from small maintenance items that the previous owner delayed addressing to major damages that may need immediate attention to pass local building code inspections. Smart investors know that repairs offer the opportunity to create value.

Here are the main questions to answer for yourself to evaluate which projects to pursue:

1)    How flexible is your repair budget? Your budget may look different if your strategy is to Buy & Hold, Buy & Flip or even Buy, Rehab & Refinance. Your budget must cover what your contracting team can easily identify as well as a buffer for more complex or harder to estimate repairs. Ultimately, you have to validate your repair budget against the estimated ARV (After Repair Value) and expected market rents to win on your investment.

2) What repairs can your current team handle? Quite frankly, many of the defect conditions I observe in homes were caused by DIY owners or low-skilled handymen. Do you have a general contractor that can manage the required specialists to rebuild a shell into a livable property? Or, do you just have a handyman that can handle mainly cosmetic repairs? The reality is that the best deals require the most rehab work. However, these jackpot deals could be out of your reach if you do not have a capable crew to complete the project on time and budget.

3) How does the condition of your target property compare with the other buildings on the same block? Real estate professionals rate both neighborhoods and buildings into a class from A to D that factors in the age of the properties and the included amenities. To maximize your return, a smart investor will match their rehab budget to the features available within the other existing housing stock on the block (i.e., put Class A amenities into a building in a Class A neighborhood). If you are an early investor on a block, you may have to rehab multiple units to justify putting in Class A amenities on a Class C block or risk a negative return on your investment.

In summary, these questions can help you:

  1. Be clear about your feasible repair budget. A mistake with your repair budget can lead to additional holding costs and reduced profit on your deal.
  2. Decide what kind of repairs to pursue. Your current team will largely dictate your decision. If you think you are ready to take on larger projects, you will need to add more experienced contractors to your team.
  3. Move through your due diligence faster. The goal is to put your negotiating chips on the table early and confidently head to the settlement table.

In the last part of this series, I will cover financial metrics.