5 Ways to Find Inventory

The market is tight. It is hard to find good rentals investments.

Finding deals that turns into rentals with good rates of return are even harder.

Fight the temptation to give up searching and pay more. Here are 5 ways to help find the deals when the inventory is down.


1. Check the County Tax Records

-Identify what your ideal property is coded by in the tax record.

-Find properties that have sold a certain amount of years back. Likely things will have changed for owners over the years, and they may be ready to sell. People who bought in years 2006-2008 likely had negative equity for a while, but now have recovered and may want to sell to get out of the property.

-Send a letter letting them know you would be interested in buying. The tax record has the mailing address of owner.

2. Develop or Convert

In a low inventory environment like current market, creating units is a need in the marketplace.

-A easy place to look is along busy road, where the zoning likely allows a greater density and more flexibility. Find larger homes and convert to several units.

-Find vacant land and build economically. Most builders will charge a premium to supervise a build job, making the numbers to high for a good return. This can be avoided if you have the knowledge to supervise it yourself. Be prepared to deal with very busy contractors, as they are all in high demand.

3. Predictive Analytics

Realtors use a a method called ‘Predictive Analytics’ to digitally watch for cue signs that a sale might be taking place soon. If a person goes online and searches ‘Home Painter’ or a similar term, that data can be purchased. The statistics show that someone who searches for certain key words will likely sell within a short period of time.

Match up with a realtor who uses this marketing, and they can match your criteria to any coming inventory in the marketplace, to get you in a first priority.

4. Go Farther

Be willing to look in a more rural area. Because of the high demand, many renters are looking in more rural areas to find rentals. These properties can be purchased at lower prices and make better returns possible.

For the renters coming from more urban higher priced areas, these rentals look like a bargain, but still cash flow healthily.

Look at the areas within a reasonable commute to major employment draws and attractions.


Know someone who is retiring and selling portfolio? Your investor buddies can pass on deals to you that they may not have the resources to take on.

Let your sphere know that you are an investor. Before you know, people will be coming to you.

In conclusion, making an effort to explore all options will yield you a portfolio that will love you back for years to come.  Call us for a consultation on how to build your strong portfolio. Naomi 717-819-2825


Rentals in Condos Communities?

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If you are looking to add to your portfolio, town homes and condos are a likely target. Most non-single family homes that are newer (1980 or younger) will be in a town home community.

Many investors buy older housing stock, and avoid this issue. Older housing is not subject to HOA’s the way newer housing is. However, the the older stock takes a great deal more upkeep. They also may not attract high quality tenants.

If you go looking for newer attached housing, navigating the issue of where rentals are allowed in these communities can take a lot of time.

Home owner associations must follow guidelines from Fannie Mae and Freddie Mac if they desire to keep up the ability for owners to obtain traditional financing.

Their guidelines include

-No more than 10% can be owned by the same entity

-More than 50% must be owner occupied

-The Homeowners Association is not involved in a lawsuit

-No more than 25% can be commercial space

Communities that meet these guidelines are called ‘Warrantable’, and ones that do not are ‘Non-warrantable’.

Because of these guidelines, the Associations will limit these factors to ensure their owners have access to financing.

It is in the best interest of a Landlord to buy in a community that is warrantable, and meets these guidelines. The property values take a significant nosedive if conventional financing cannot be secured on the homes.

While the rental rate may be the same, the future value is inhibited by the lack of financing options. This may provide a attractive price up front to an investor, but it is important to think about your exit strategy when you buy.

If the community does not have access to traditional financing, there will likely be many more foreclosures and distressed sales. Coupled with the downward pressure from lack of financing options, it keeps appreciation temped down, and may result in depreciation.

For these factors, it is generally better to look for warrantable condos or town homes where the fees are reasonable.

The exception to this is if the investor intends to purchase a large chunk of all the homes in a non-warrantable community. This allows you as the owner to monitor upkeep and help to uphold the integrity of the community for all the owners.

If you are looking to add to your portfolio with a keen eye on value, contact us for local information on communities on both sides of this spectrum.

Naomi Brown 717-819-2825

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Little or Big? Which investment is best?

When starting out as an investor, most will purchase single units at a time, until a large portfolio is built.

Once a portfolio is built, is it better to transition to a large group of rentals in one property/location? Or is holding the single units the best way to maximize the return?

The Cap Rate for the small units in York County (1-10) is 8%, which is in contrast to the Cap Rate for large rentals (10-200) at 7%.

In Lancaster County, 1-10 unit owners enjoy a 7.3% Cap Rate. The larger owners with 10-200 units have a 6.3% Cap in contrast.

Looking at this number, it seems to make sense that a large portfolio of smaller units would be the better return. As an investor, the management of multiple properties in soft costs could start to lessen that. The accountant must track the depreciation and basis in many more properties, which increase the cost.

Calls for maintenance for properties spread out in many location may also affect the viability of the cap rate for these smaller units.

If financing is placed on these properties, the total effective cost of the financing should also be factored into the ratios.

For these reasons, we encourage investors to examine their soft costs in legal, finance and accounting before arriving at a final decision.

Before assuming an overall rate is reflected in the Cap Rate, we must also look at appreciate in value. Because investment value is tied directly to income generated, the increase in rental rate is a reflection of increase in value.

For large property in Lancaster, the rental increase sits as 2.7%. For smaller Lancaster Properties, they have a 1.9% growth rate.

In York, the large property owners have a 3.7% growth rate. The smaller units have a 2% growth rate.

This seems to indicate the larger properties will see greater appreciation in value from greater rental increase. Taking into consideration the overall picture of the investment performance with Cap Rates, rent growth rates and soft costs will help to form a wise decision.

If you would like a personal analysis of the overall picture of your investments, call for a no-obligation consultation.

Is Now the Time to Buy in Central PA?

Are you asking yourself  “Is now the time to buy an investment property?”

Money Crowing

That is a great question. Is the economy going to continue to grow as well?  Indication from GDP is that we continue to maintain a fabulous growth in our economy. The GDP grown was 3.2% in first quarter of 2019. A ‘Regular’ grown rate is 1.9%, so this number is well above the average.

What does this mean for investments? Well, it means rents are growing, demand is strong and your units will be easily filled, which results in the best cash flow.

If you wait to purchase until we have another recession, it may be a long wait. In the meantime, the low vacancies and higher rents provide a return that balances out any higher sale price.

Take these examples:

Scenario 1. If you purchase a four unit building for $250,000.

The building stays fully rented, so your Net Operating Income is a strong $25,000. This is a 10% CAP Rate.

Scenario 2. In a recession, you get a great deal on the same 4 unit at $200,000.

The building always has one unit empty, and rents are lower to keep the tenants you have. Your Net Operating Income is $13,800. This results in a 6.9% CAP Rate.

See the point? Purchase good deals in a strong economy, you will come out on top in the cash flow game.

The above scenarios are based solely on cap rates, which are an important measure of value. However, there is also the growth rate to consider as well. Buying in a downturn may mean that your potential for growth in value is much greater, which will grown in relation to the overall economy.

The Internal Rate of Return is a measure of how the property performs with both income and growth taken into consideration. In scenario #2 above, to really understand the outcome the growth rate should be added in as well.

Let’s say after five years, your income grows to $25,000. The value of the building has now increased to $250,000. You sell for a $50,000 profit. The overall rate with growth added in is 12.64%.

The growth rate now increases your return beyond just looking at income. Many factors play into what may be your best scenario. For some investors, the income stream is much more important. For others, it is the shelter from taxes. These factors may outweigh the benefits of just looking for growth in the investments.

If you would like to learn more, contact us for a consultation, and let us prove the value of professional service with results to your bottom line.

Opportunity Zone: Investments in Columbia, PA

Looking to take advantage of some local opportunity zone investments?

Columbia is experiencing gentrification with many signs of growth. Local census tracts have been designated as opportunity zones, which increases the return.


Focus on quality lifestyles have drawn attention here as well. With a large riverfront park and bike trail, local festivals, antique malls and new restaurants cropping up, many people have been drawn to the area. Easy commutes to both York and Lancaster make it a logical location for access to work.

All of these increasing signs of growth make it the perfect time to work on redevelopment projects in the area, while also taking advantage of tax saving with opportunity zones.

Here is a list of properties that could be high in potential.

  • 239 Poplar Street, Columbia:

A multi-use brick building with 7,500 SF and prominent location. Asking $424,900. High Density Residential.


  • 28 N. 2nd St, Columbia:

Three story multi-purpose building with 5,970 SF. Close to river and main shopping area. Asking $302,500. High Density Residential.


  • 360 Chestnut Street, Columbia:

Classic Victorian property, formerly a Bed and Breakfast. Approximately 5,000 SF, asking $350,000. Medium Density Residential, Light Business.


  • 411-413 Locust & 13 N 4th Street, Columbia:

Mixed uses with Warehouse, Retail and Residential units, 13, 225 SF. Asking                         $412,500. Downtown Commercial.


  • 401-417 N 3rd Street, Columbia:

Commercial and Residential mixed use, currently housing Antique Business with 13,500 SF. Asking $450,000. Downtown Commercial.


  • 185 N Front Street, Columbia:

Large development site right across from river and next to Olde 462 bridge. Asking $650,0000. Riverfront Commercial.


  • 309-315 Locust St, Columbia:

Formerly Hotel and Restaurant, Mixed Retail and Residential use. Building is in need of complete rehab, 23,000 SF. Asking $225,000. Downtown Commercial.

Not sure how the Opportunity zone works?

The summary is that there are tax savings that are offered to the investor who does a re-development project in one of these zones.

  • Much like a 1031 Exchange, the capital gain from current investment may be rolled into a new project. If left in for 7 years or longer, 15% of the original capital investment is excluded from tax. (The other 85% must still be paid)
  • If held for 10 years, there is no tax on the capital gain of the new investment. Your basis is ‘stepped up’ one time to current market value.
  • Investments must be in a ‘Fund’ that then develops and holds the real estate.
  • The property purchased must be ‘Improved’ by 50% or more of building value. (Land is excluded.)

As an Investment Realtor in this local market, contact us for detailed information on these properties, and information on opportunity zones. Naomi Brown 717-819-2825


Love Parades? Come see the Home Parade this weekend!

Love to see decked out model homes?

Come see a ‘Parade’ of them all over York County this weekend!

The Parade of Homes is a weekend event where many model homes from all the local builders are open for extended hours. Many offer prize entries, and staff is on hand to answer all your questions.

The Parade Main Page can be found here:  https://yorkbuilders.com/events/parade-of-homes/

September 15th & 16th, 10 A.M. to 5 P.M.

The Carr, Cleaver and Pendergast Team represent:

Jeff Henry Builders: https://yorkbuilders.com/home/jeffreylhenry2018-entry/

Dombach Builders: https://yorkbuilders.com/home/dombach2018-entry/

Come join us at these locations to see how easy building your dream home can be!


New Home: Development Options and Choices

This is part 3 of a series: New Home: Part 1, Luxury, Part 2, On Your Own Land,

Part 3, Development options and choices.

Many builders offer homes in developments where they are the exclusive builder.

A new home in a matter of months! Yes it is possible. Here is what you need to know.

  • Pricing: When looking through options, it may seem some builders have much better prices. The real question to ask is: What is included? ‘Pricing strategy’ varies from builder to builder.

Some will have very low ‘Base’ prices, but practically everything is an ‘Upgrade’ which adds $100,000 to the price.

Other builders will offer a higher ‘base price’, but include features that may the home attractive and comfortable even with no ‘upgrades’.

To compare apples to apples, ask them to price the same features in the same size home, so you can compare the bottom line.

Many communities have ‘Lot Premiums’ for the best lots, so make sure you select a lot you like before asking for a price.

  • Incentive: An incentive may be offered to entice you to buy. Sales strategy makes them ‘Limited time offers’ to get you to buy sooner rather than later. These may be reasonable, or it could be a bate and switch. Having a Realtor who knows the builders and their pricing strategy is helpful to ensure you get the best deal possible.

Many builders employ new home salespeople to sit in the model homes and sell. These folks are not Realtors, just salespeople for the builder. Keep this in mind before disclosing information that may hurt your negotiation.

Many Builders tie any incentive to using their preferred title company and lender. This can be fine for a buyer, but compare interest rate and terms with preferred lenders before committing to ensure you are getting a reasonable rate and terms.

  • Locations: When looking for a new home, you may be set on a certain school district or area.

Think about your taxes and resale value before settling on a location. Having a local Realtor pro can ensure you know all your options within your target area. We may be able to suggest options you may not have entertained on your own.

On a new home, taxes have not been established, so make sure you know what property taxes will reasonably be, before committing to a mortgage.

  • Quality: Not every home is created equal!

No one wants to buy an inferior home. Do you know what features to look for in a new home? Many higher standards can be easily achieved by minimal costs. Selecting a builder who gives a higher level of quality will be well worth it in the end.

  • Resale value and stability: Protect your investment!

Make sure the builder you are purchasing from is established and has a history of satisfied customers. Nothing can be worse than buying a new home, only to see the builder slide into bankruptcy or chaos. Financial stability is essential to honor the new home warranty you will receive and provide a quality product.

  • Time: If you are not familiar with the market, you can spend many hours figuring out all the above items. Our new home experts know the market, know the lots, and know how to match you with the best options based on your needs. The best part? It does not cost you anything. As a buyer, the compensation your Realtor receives comes from the seller, but their duty is to represent your interest and serve you.

If you want to get started on the fast track to your new home- contact us today for a free consultation. Save time and fast track to your dream home!