If you’re looking to build a real estate portfolio in Philadelphia, there’s one strategy that stands out for its power, repeatability, and ability to scale — the BRRRR method.
For those new to the term, BRRRR stands for:
Buy, Rehab, Rent, Refinance, Repeat
It’s a proven method that allows investors to recycle their capital, grow their holdings, and build long-term cash flow — all without constantly injecting new funds.
And if you’re working the streets of Philly, this method can be a game-changer — if you know how to navigate the local market.
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1. Buy: Find the Right Philly Property
The first step is securing a distressed or undervalued property — something with meat on the bone that you can buy well below its future value after repairs.
Where to look in Philly:
• West Philly (think: Cobbs Creek, Mantua)
• Germantown and Mt. Airy for larger homes
• Brewerytown and Port Richmond for active revitalization
• Kensington and Frankford for high cash flow
How to find deals:
• Sheriff sales & city tax auctions
• Wholesalers
• Off-market sellers
• Local investor groups and meetups
? Local Tip: Always run a title search. Philly homes often come with city liens, back taxes, or tangled ownership — do your due diligence.
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2. Rehab: Add Value the Smart Way
Philly is full of historic rowhomes, and many are long overdue for updates. Rehab is where you force appreciation by improving the property — and here, costs can vary widely.
Common repairs in Philly:
• Updating electrical (many still have knob-and-tube wiring)
• Plumbing and sewer line work
• Roofs and brick façades
• Opening up layouts while respecting structural walls
You’ll need permits for major work, and Philly’s Licenses & Inspections (L&I) doesn’t cut corners. A good general contractor who knows the city codes is worth their weight in gold.
Budget Guidelines:
Budget will vary depending on the size of the property, number of beds and baths, etc.
• Cosmetic/light rehab: $40K–$75K
• Full gut with systems: $80K–$150K
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3. Rent: Generate Consistent Cash Flow
Once your rehab is complete, it’s time to place tenants and start earning income.
Strong rental areas:
• Temple University area (student rentals)
• University City (young professionals, grad students)
• Fishtown/Northern Liberties (high-demand, trendy spots)
• Southwest and West Philly (Section 8-friendly and high demand)
? Note: You must have a Rental Activity License in Philly, plus lead-safe certificates if the property was built before 1978 (which is most of them).
Some investors prefer Section 8 for the guaranteed rent; others stick with market-rate for potentially higher ROI. Either way, tenant screening is key.
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4. Refinance: Pull Your Money Back Out
Now that you’ve increased the value of the property and it’s generating rent, you can go to a lender and refinance based on the After Repair Value (ARV).
Goal:
Refinance at 70%–75% LTV (Loan-to-Value) and pull out the cash you originally invested — ideally, all of it.
Lender-friendly banks in Philly:
• Firstrust Bank
• Univest
• Meridian Bank
• Local credit unions and portfolio lenders
You’ll need:
• Lease agreements
• Rent rolls
• Before-and-after photos
• Rehab invoices and closed permits
A successful refi means you’ve got your capital back and a cash-flowing asset — without leaving your money tied up.
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5. Repeat: Scale Up Your Philly Portfolio
With your funds back in hand, you repeat the process — acquiring the next property, building equity, and expanding your portfolio.
How to use the
Hot BRRRR zones right now:
• Point Breeze: South Philly’s gentrification zone
• Frankford: High cash flow, still affordable
• East Germantown: Strong rental demand and lower entry point
• Mantua: Proximity to Drexel/UPenn is a major plus
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Final Thoughts: BRRRR in the 215
Philadelphia’s diverse neighborhoods, strong rental demand, and affordable entry prices make it an ideal market for the BRRRR method — but this isn’t a passive investment.
Expect to deal with:
• Strict inspections
• City permits and bureaucracy
• Older homes with hidden issues
• Tenant screening in complex neighborhoods
Still, for investors willing to do their homework, build a strong team, and get their boots on the ground, Philly’s real estate landscape is full of opportunity.
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?♂️ Want to get started?
Build your Philly power team:
• An investor-friendly real estate agent
• A licensed contractor familiar with L&I
• A property manager
• A bank or credit union that supports investment lending
The BRRRR method isn’t just a strategy — in Philadelphia, it’s a long-term wealth-building plan that works.
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If you’d like help finding BRRRR-worthy properties in Philly, or want to talk shop about financing, rehabs, or neighborhoods — let’s connect.