🇺🇸 Downtown Philly Comeback, the Dream is Still Alive, and VictoryBase

Home of American Independence Resurges

Two hundred forty-eight years ago, 56 badasses met up in Philadelphia and signed a document that basically told the world’s most powerful empire to go eff itself.

When those delegates from the 13 US colonies decided to break with the British Empire and sign the Declaration of Independence, the total US population was some 2.5 million. The city where they declared their freedom was the country’s largest with about 40,000 people. 

Today, US Census data puts the population of Philadelphia at about 1.6 million, and the story about the city’s downtown is one of revival and resurgence, contrary to some other major cities. The Philadelphia Business Journal recently reported that the population of the Greater Center City region increased by 26% to 188,741 from 2011 to 2022, and housing units rose by 24%.

Lisa Seligsohn, 65, is one of those people who has moved into town, in her case to Rittenhouse Square, next to a 7-acre oasis first laid out in 1683. She and her husband sold their suburban home in Merion Station where they raised their children and bought a 2,200-square-foot apartment for $1.2 million on the 12th floor of Rittenhouse Plaza back in 2020. (A year later, they traded it for an apartment on the 11th floor that had been renovated.)

Nicholas Florez, 31, is another. He and his wife, who both work as recruiters, lived in Center City before moving to a neighborhood in the southwest part of the city called Graduate Hospital. They bought a 3-bedroom, 3-bath townhouse with a roof deck for $690,000 in April 2023 and recently had their first child.

They are part of the influx into downtown. Over the past four years, the residential population grew by 3% over the past four years and 7,429 new housing units have been created.

Urban v. Suburban Life: Walking v. Driving

Philadelphia’s growth has defied the trend that has seen cities lose population. New York today has some 550,000 people less than it did during the April 2020 census count. San Francisco saw a 5.3% decrease in population between 2020 and 2022. Part of this is linked to affordability, and part can be traced to the rise in remote work.

“I grew up in New York and loved that experience and I wanted something like that for my son,” Florez said. “We have a lot of friends in the city, and there’s the convenience factor.” 

His walk to work takes 23 minutes. 

For Seligsohn, it’s about a lifestyle change.

“I love not being in the car so much,” she said. “I got tired of the suburban shuttle, that mom taxi thing.”

She feels safe walking around her neighborhood at night, and credits the new mayor, Cherelle Parker, with working to improve public safety. The everyday interactions she has with strangers in her neighborhood are mostly positive and “have restored my faith in humankind.”

Seligsohn lives in Rittenhouse Plaza, a stately building from 1925 with many older residents, and appreciates how they can comfortably age in place, with easy access to restaurants, cultural activities, shopping, and world-class health care.

Florez, who lived in Chicago for a few years after he graduated St. Joseph’s University in nearby Merion Station, has noticed big changes in Philadelphia since he first arrived 13 years ago. Development is going all over his Graduate Hospital neighborhood, and he’s seen refugees from high-cost housing markets like Boston and New York relocate to Philadelphia.

“There’s a lot of start-ups popping up around here,” he said.

It’s not lost on Seligsohn that Independence Hall, where the Declaration of Independence was signed 248 years ago, is only about a 30-minute walk for her.

“People have been living in this city for 200 years,” she said.

Policies That Spur Downtown Development

Philadelphia has taken an aggressive approach to office-to-residential conversions, capitalizing on tax incentives. It has some 1,000 units in the pipeline in 2024, and it’s a way to combat the rise in occupancy rates at office buildings, which is running at about 23% this year. 

Nationwide, 2024 is a record year for repurposed office spaces, with 55,339 units currently under conversion and expected to enter the market in the coming years. From 2021 to 2024, the number of apartments scheduled for conversion from old office spaces increased from 12,100 to 55,300 nationwide. Washington, D.C. with 5,820 units, leads the way, followed by New York with 5,215 units, and Dallas with 3,163 units. Philadelphia ranks 14th on that list.

Greater Center City is relatively affordable compared to other major cities like Manhattan, where the median rent more than doubles that of Philadelphia, which was at $1,996 as of November 2023. 

Why This Matters to Real Estate Investors

Investing in dense downtown real estate has historically been a winning strategy over the long term because of scarcity of available land and steady demand from renters. Redevelopment, repurposing, and air rights of existing properties is crucial to success. 

Applying tried and true buy-and-hold principles can be highly effective, particularly if an investor can capitalize on emerging trends.

According to Crexi, the average closed cap rate over the past 12 months was 6.5%, with indications of a slight expansion. Philadelphia, in particular, offers a compelling case for investors:

• $84k median household income

• 40% population growth over the past decade

• 42% of the population hold a bachelor’s degree, 20% higher than the U.S. average

• Strong university and healthcare network, including University of Pennsylvania, Drexel University and Temple

• Home to multiple diversified Fortune 500 companies such as Comcast, Campbell Soup, and Toll Brothers

Philadelphia's population resurgence, highly educated workforce, diverse job market, sophisticated restaurant scene, rich cultural and historical offering, combined with moderate purchase prices ,make it a prime market for investment today.

American Dream Dead? Real Estate Still Offers a Path to Wealth Generation

The American dream of owning a home has evolved over the years and looks different than it did to previous generations. Our position is that the best time to buy was 20 years ago, the next best time is today.

Total home equity for US mortgage holders in the first quarter was over $17 trillion, according to CoreLogic. This is a 9.6% increase from the previous year, and an average gain of $28,000 per borrower.

Recent news about the home-buying market seems relentlessly negative, but we at proptext.co are as optimistic about real estate as we have ever been. Some potential buyers feel priced out, with rates and listing prices putting average monthly mortgage payments at nearly double what they were in January of 2020, according to Zillow. Current homeowners express frustration that upgrading to a bigger home feels impossible since they cannot handle the higher monthly payments.

That’s life. Adjust expectations. Compromise. Move a few towns over where property is cheaper. Give up the garage. How many times are you going to entertain in that dining room?

“Be creative in how you reach for that dream,” said Wade Shoop, an Austin-based real estate broker with 19 years of experience. That dream might not be a single-family home in a close-in suburb, Shoop said, but may require some “house hacking,” or taking on roommates to help cover the monthly payments.

“That property might be in a commercial area” or farther from town, he said, urging folks “to be open to it. The dream is going to look different than it did to your parents and grandparents.”

Andrew Carnegie, the 19th century industrialist, said this about real estate: “Ninety percent of all millionaires become so through owning real estate. More money has been made in real estate than in all industrial investments combined. The wise young man or wage earner of today invests his money in real estate.” 

But he made his billions in steel, shipping, railroads and oil. So we’re not sure how he came to that conclusion.

Real Estate Is as American as … You Know

The bottom line is that real estate is inextricably tied to the founding of our nation, and it has played an outsized role in American history. The US Constitution, adopted in 1788, was pushed along by the Federalist papers. In that collection of 85 articles and essays written by Alexander Hamilton, James Madison, and John Jay, they were clear that property rights were as important as personal rights.

In Federalist 54, James Madison stated: “Government is instituted no less for the protection of the property than of the persons of individuals.” He later explained that property rights are as important as personal rights because the two are intimately connected. (This happened 12 years after the Declaration of Independence, which was mostly written by Thomas Jefferson in 1776.)

But further steps were taken to protect property rights. The Fifth Amendment of the US Constitution, ratified in 1791, provides that “[n]o person shall be ... deprived of life, liberty or property without due process of law; nor shall private property be taken for public use, without just compensation.”

Betting on property values to rise is as patriotic as it gets. A 2013 paper by Edward Ludwig Glaeser, an American economist and the Fred and Eleanor Glimp Professor of Economics at Harvard University, was titled “A Nation of Gamblers: Real Estate Speculation and American History.” Here is one passage:

The first and most obvious lesson of this history is that America has always been a nation of real estate speculators. Price and construction convulsions have been common in both rural and urban areas. Real estate is a particularly democratic asset that attracts the mighty, like George Washington and Benjamin Franklin, and the modest, like the small farmers in Kent, Connecticut, who were buying and selling land parcels rapidly in 1755 (Grant, 1955). Real estate speculation was an integral part of the ―winning of the west, the construction of our cities, and the transformation of American home life, from tenements to mini-mansions.  

Source:https://www.hks.harvard.edu/sites/default/files/centers/taubman/files/Glaeser_Ely.pdf

Buy Property Remotely, and Rent It Out to Build Wealth

In today’s market — where homes are listed with 3D floor plans and online real estate video walkthroughs are available — more and more Americans are getting comfortable with investing in real estate remotely. During the height of the pandemic in 2020, Redfin reported that some 63 percent of offers on homes were made by buyers who had yet to visit the property. 

Investopedia even has a step-by-step guide on how to buy a home remotely. It’s pretty basic information, but useful as a checklist. For those living in coastal cities where the price of admission for housing is prohibitively high, it makes sense to look to more affordable markets.

As the single-family residential (SFR) market, which rose out of the ashes of the housing crash in 2009-09, has become more of an asset class, big institutional players have become the competition for first-time home buyers and investors in some cities, but there are plenty of places that are in play.

“Get away from the major metros,” advised Shoop. “I would go to the secondary and tertiary markets. Anywhere there’s a college.” 

In Texas that includes Abilene, Lubbock, College Station, Waco and Longview. Next door in Oklahoma, that would be cities like Norman, Stillwater or Tulsa. College towns have new students moving in at regular intervals looking for rental properties and a built-in property management infrastructure.

“In Lubbock you can still buy a house for $100,000 and rent it out for $1,000 a month,” he said. “These markets aren’t sexy but they’re steady and with the colleges you’re going to have demand from students.”

Shoop, who worked as an investment location manager for two start-ups in the proptech sector, said real estate should be part of an investment portfolio. But he cautioned about getting “too wrapped up in cash flow.”

“The trick is you’ve got to be able to take the swings and the hits that come with owning a rental property,” he said. 

These include vacancy periods, maintenance and repairs, and other vagaries that can reduce cash flow or put it into negative territory. These are offset by all the positives of owning, which include tax advantages, appreciation, building equity and wealth creation.

“You’re not looking at the bigger picture,” Shoop said. “We’re not talking thousands of dollars, we’re talking a few hundred bucks.”

Beware of the real estate pitch that promises quick riches. Real estate investments grow over the long term, and cash flow improves as an investor approaches retirement when the money can make a big difference

“You need to look over the horizon,” Shoop added.

Advice for Those Looking to Get In

Keep these nuggets top of mind during the search:

• Over time, real estate pays. The St. Louis Fed crunched the numbers from 1870-2015. Real estate and stocks both averaged about 7% returns. https://www.frbsf.org/wp-content/uploads/wp2017-25.pdf

• Ignore the headlines. The media covers real estate the way it covers sports, or politics. Who won that day. Who’s up, who’s down. There is a deal out there. Trust us.

• Think long term. Making those monthly payments may feel Sisyphean, but after 10 years, 15-20 percent of the original amount is paid off.

• The buyer takes advantage of tax breaks and benefits from appreciation on the property over 30 years.

• Inflation is the investor’s friend. The monthly payment the bank gets 10 or 15 years down the road is worth less than that same payment today.

• Rates go up, rates go down. The historically low rates of 3% from 2020-2022 were once in a lifetime. (The all-time high was 18.63% in 1981.) A 5 or 6 percent rate is normal.

• Think outside the box. Like way outside. Consider buying a property remotely if housing is out of reach in your expensive coastal city.

Taylor, Texas

Taylor, Texas, located about 35 miles northeast of Austin, has been gaining attention for its potential as a market for real estate investors. 

Taylor is part of Williamson County, one of the fastest-growing counties in Texas. Its population has been steadily increasing, benefiting from the spillover growth of the greater Austin metropolitan area. The local economy is diversifying, with a blend of traditional industries such as agriculture and manufacturing, complemented by emerging tech and service sectors.

A significant boost came from Samsung’s announcement to build a $17 billion semiconductor factory in Taylor, expected to create 1,800 jobs and boost the local economy. This development is likely to drive demand for both residential and commercial properties.

A Rising Star

→ Median home price in Taylor is approximately $330,000, significantly lower than Austin's median of over $500,000
→ Taylor's proximity to Austin, a major tech and cultural hub
→ According to the US Census Bureau, the population of Taylor was approximately 17,405 in 2020, up from 15,191 in 2010
→ The city's is connected via major highways like US highway 79 and state highway 95, facilitating commutes to Austin and other neighboring cities

Future Appreciation

510 Glacier Point Trl

Nestled in Taylor's North Park subdivision, this charming one-story home offers three bedrooms, two bathrooms, and 1,244 square feet of cozy living space. The open layout seamlessly connects living, dining, and kitchen areas. Enjoy the neighborhood pool access just a short distance away and convenient proximity to the new Samsung campus, shopping, dining, and schools.

The Investment Thesis

→ Close to the new Samsung chip factory
→ Close to Austin and will be part of the larger Austin Metro as it continues to grow
→ Affordable relative to Austin

 Property Details

 Financial Projections

Interested in Learning More?

*Appreciation based on 4.5% growth rate. 

Scott Bond - Mentorship at Scale

Creating impactful first impressions is an art, mastered by those who are deliberate in their actions, give selflessly, and strive to enrich the lives of others. Scott Bond, who offers career support and advice through Patreon, exemplifies these qualities. We are happy to welcome him as our inaugural guest writer.

Our request to Scott: enlighten our audience on the significance of mentorship. Here is his advice:

Edison’s Encouragement Helps a Young Entrepreneur

At some point today, you’ll likely need to leave your house, and you’ll grab your car keys and head out. Where you go, what you do, and why you’re doing it are irrelevant to this essay. What is meaningful is that you are driving a vehicle that Henry Ford helped pioneer. Ford’s invention of the Quadricycle, in 1896, was one of the first gasoline-powered vehicles on the road.

The Quadricycle morphed into the Model T, introduced in 1908 and rolled off  a moving assembly line beginning in 1913, an innovation credited to Ford that revolutionized the car industry. 

After working at the Edison Illuminating Company in Detroit, where he started in 1891, Ford devoted his spare time to experimenting with gasoline engines. He faced numerous challenges in bringing his vision of an affordable, mass-produced automobile to life. Early ventures, like the Detroit Automobile Company, failed, but Ford kept at it.

It took guts, determination, effort, and the ultimate X-factor: mentorship. That mentorship came when Ford met one of his idols, Thomas Edison, in 1896. Ford was working as a chief engineer at Edison Illuminating by then and was invited to a dinner hosted by the Detroit Edison Company. When Ford presented his ideas for a gasoline-powered vehicle, Edison offered words of encouragement. 

Edison said: “Young man, that’s the thing; you have it. Your car is self-contained and carries its own power plant.”

This endorsement boosted Ford’s confidence and fueled his dedication to his vision of the automotive industry.

Edison became a mentor, providing advice, support, and guidance. As Ford continued to refine his designs and business strategies, Edison helped shape the direction and urged Ford to keep at it. Despite numerous setbacks and failures, Ford remained committed to his goal of making automobiles accessible to everyone — and one of his early ideas was to pay his assembly line workers $5 a day, enough to afford the Model Ts they were building. (One cost $850 in 1909 but was down to $260 by 1924.) 

His perseverance led to the success of the Ford Motor Company and contributed to the widespread adoption of the automobile.

Mentorship in the Modern Era

Mentorship has evolved into a multifaceted and dynamic component of professional development. It transcends traditional boundaries and adapts to the needs of individuals across various stages of their careers. Whether it’s the ability to call a trusted adviser or seek opportunities through influential networks, mentorship is an ultimate tool for career development. 

Unfortunately, few people seek out mentors or take the time to network to find those who can support and shape their career paths. Many people believe they can do it all on their own, but the truth is, a career is long, stressful, challenging, and full of twists and turns that can often require the guidance and support of people who have been there before. 

I encourage you to build a personal board of directors or mentors that you can lean on. These are the people who prop you up when you need it most, or who encourage you to take risks along the way. They’re a safety net in times of self-doubt, and motivators when an extra push is needed. 

Today, I spend countless hours giving back my time, my experiences, and my knowledge to others. I believe it’s the most important thing one can do to leave a legacy that outlives contributions I will make in my corporate career. I wouldn’t be where I am today if it wasn’t for the support and mentorship that others were willing to give me, and I pay it forward daily the best I can by being open to connections, and discussions, and by giving my time. 

Without Edison, Ford may never have revolutionized automotive transportation. With Edison, he had the support and guidance from one of the most famous inventors of our time, helping him navigate the difficulties he faced along the way. The mentorship between Thomas Edison and Henry Ford was a defining chapter in American history. 

If you’re interested in learning more about the work I do outside of my corporate role, I write daily about all things career growth, development and support. I host a podcast, run a Discord community to dive deeper into the content, and coach and mentor. If you’re seeking ways to improve your career, or just need a little support, visit the site today. 

By Scott Bond

Leading by Example

We are grateful to Scott for contributing to our newsletter. He exemplifies leadership, actively connecting people in and around the proptech and real estate industries.

Today's job market is unprecedented. Every role attracts hundreds or even thousands of applications. Technology has made it easier than ever to apply en masse, putting recruiting teams on the back foot and causing excellent candidates to get lost in the abyss. However, one thing remains unchanged: your network is your net worth.

Scott's mission to help 10,000 people advance their careers is a noble one that he actively pursues. If you believe mentorship could enrich your career, follow Scott on LinkedIn. Be sure to check out his Patreon, where he offers a variety of services at unmatched value, including:

• Daily advice from his newsletter

• Monthly one-on-one coaching

• Weekly one-on-one coaching

• Á la carte coaching courses

Editorial Note:  Henry Ford’s well-documented anti-Semitism and his other controversial policies complicate his legacy, yet his role in automotive history remains indisputable.  

At prop.text, we are committed to providing context in all aspects of our newsletter.  

VictoryBase

VictoryBase is a fractional real estate investment company that aims to transform the relationship active duty military families have with real estate. Military families move frequently, and can spend time in fast-growing and expensive markets like San Diego or isolated, military-supported locations like Minot, North Dakota.  

The combination of not being in control of where they will be stationed, and the uncertainty about how long the assignment will be, makes it difficult for soldiers to achieve the American dream of homeownership. VictoryBase is changing that by providing an investment vehicle for a diversified portfolio, while easing the worry of location risk.

From Fighter Pilot to Entrepreneur

Tom Paquin, founder and CEO of VictoryBase, was an F18 pilot in the US Marine Corps for over 20 years, flying missions in Afghanistan after the Sept. 11th terrorist attacks. He went on to start several renewable energy companies before focusing on a problem he faced while serving — how to achieve home ownership.

According to Today’s Military, the average US soldier changes duty stations every two to three years. Over a 20-year career, this could mean 7-10 locations, not including specialty training or deployments. Paquin experienced this challenge firsthand, where making a commitment to buy his primary home often meant figuring out what to do with it once the next assignment arrived. Given the likelihood of duty station transfers in his career, it was a problem he had to figure out repeatedly, or rent until he retired from the military.

Insert VictoryBase, a Multi-benefit Solution

VictoryBase was formed to solve two very specific problems:

1. Give active service members the ability to partake in the American dream and benefit from real estate appreciation.

2. Maintain a location-free investment vehicle that removes the stress/risk of selling or managing a home.

They do both by first acquiring/developing prime real estate assets next to military bases, then lease them out to service members, with an emphasis on providing a positive experience for residents.

In turn, service members receive discounts on their monthly payments when they invest in the VictoryBase Corporation, which similar to a REIT, can grow in value if the real estate appreciates and generates cash flow over time. When the service member leaves or is reassigned they can sell their shares to realize gains, or decide to stay invested over the long term.

A Team of American Heroes

The team behind VictoryBase is stacked with people that inspire admiration. This includes Justin Allen, vice president of development, a former Green Beret who led teams on dangerous missions over multiple tours in Afghanistan.

John Sharkey, VictoryBase COO, was a US Army officer and Blackhawk helicopter pilot who did tours in Afghanistan and Korea. He spent nearly a decade leading teams in commercial real estate acquisitions before joining VictoryBase in 2019.

We spoke with both veterans at length about how they became involved with VictoryBase and what excites them about the future.

Allen said that if they are able to turn renters into partners, the ROI is undeniable. 

“We are not only creating returns for our investors during and post-occupancy,” he said, “but we are creating a great place to call home while they are serving.”

On the real estate side, the team is expanding their portfolio in and around active military bases, growing from their assets in Beaufort, South Carolina, and Sackets Harbor, New York.

How to Support the Mission

Does the sound of investing in a company backed by military heroes focused on helping other American heroes experience the American dream align with your goals? (trick question).  Invest in this team today.

Do you own or source real estate acquisitions in and around popular military communities like Jacksonville, San Diego, San Antonio, or other cities with a strong military presence?  If so, reach out to Justin Allen via LinkedIn, or email him directly at [email protected].  

Are you a military soldier or know of one that should be participating in the American dream of homeownership, but isn’t ready to commit to a mortgage?  Contact the team and sign up for the next available home.  

The VictoryBase mission was summed up by John Sharkey: “Folks protecting the American dream should be partaking in the American dream. It’s our duty to make that happen.”  

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