Northeast PA advice

8 Replies

Anyone in the northeast PA region available to give me starting out advice? I will begin REI in the summer of 2016 and would like some advice on buying around my area. I want to start with a 4plex. Should I instead start with a duplex? You can assume I have the funds to buy either. I just want to make sure I'm not going too deep too quickly. I do have a full time job but I also have a partner so time isn't too much of a problem. Any advice as to where to begin buying around my area as well? I live in Scranton, PA thanks in advance.

get the four fam. There's more than enough good ones in Scranton. 

@Christopher Polanco A 4plex would be a great start but even for Scranton area most seem to be going at 'market' prices from what i can see in the last year but you might be able to find some deals here and there. 

You might have an easier time finding a good to great deal on a duplex but again this is just my observation. 

Where are you looking to start, Scranton or outside Scranton?

Good luck and welcome to Biggerpockets!

Drew Vukov yea that's what I was thinking. I was even thinking about going by the university and maybe getting a 6-unit but I feel that may be pushing it because the students there are pretty reckless. Florian N. Yea you're probably right. We'll see when the time comes. I'm looking inside and outside of the Scranton area. Anything that's max around 30 mins from the Scranton area. I'll still be a full time student for another semester and I'll be working full time so I don't want to dedicate too much time to traveling to and from my property. Any locations you know would be a good spot to start?
Drew Vukov and Florian N. Sorry if the formatting if my reply is horrible. I'm replying with my phone.

you can buy a 4 unit on residential terms in Scranton right now at market and cash flow. You should be able to find a few under market as well if you keep looking.  I've seen a few inexpensive 6/7 units but then you are talking 15/20 year loan terms and 30 plus percent down payment. You are basically at the same cash flow as a 4 unit. 

I'll move on to duplexes there once I'm out of conventional financing on 4s. 

Hello,

I am new to the scranton market and BP. I've enjoyed the podcasts. Are there any recommendations for real estate agents who work on multifamily properties like a 3 family up to a ten family in Scranton and surrounding areas?

Thanks,

Bill

Bill, I could probably type forever. Scranton is a unique market. It is loaded with inventory, but ironically enough the rents are substantial. Higher end units here are getting $800-1400 per month for two bedrooms.

The main barrier to entry is the licensing and inspections department. Scranton is notorious for condemning properties for minimal issues. Once a home is condemned it is very difficult to re-open it as a multi-family again. There are many code updates required. Oddly enough, any three unit or more that undergoes floor layout changes will require sprinklers and a full set of construction plans.

As a builder of many types of units, I have learned that residential re-development is more efficient than new construction. I use the bones of the distressed homes and bring them up to code as modern units. 

Coming from Brooklyn, you probably have many clients looking to reach out a little further into cities like Scranton to get much higher returns. If you have any clients that are looking to purchase any investment properties in Scranton, let me know. I have properties to wholesale and properties that are all up to code that have been stabilized with good rents for years.

Feel free to call me anytime

Our city needs more investors to come in and spend money. I can offer any recommendations you would need.

Thanks,

Medium synergy logo   large sizeAdam Guiffrida, Synergy Property Management Group | [email protected] | 18007204070 | http://www.SynergyProperyManagementGroup.com

Great information @Adam Guiffrida any investor going into that market should be aware of those items or would lose some big money. 

Regarding your question @Christopher Polanco whether it's a duplex or a quad I would say more units are better under one roof although, I would move forward on a duplex if I found one that was a good opportunity. The most important thing you need to focus on is education to make sure you are buying right. A few questions to consider, are you planning on managing yourself or hiring a management company? if you are managing yourself it will be easier if you go smaller at the beginning, but if you are using have a good management company the sky is the limit on the amount of units they just have to be bought correctly. Through education you will find the landlord you want to be section 8 or high end and then you can research the market to find the areas you want to be in. 

If you are using financing make sure to shop around different lenders for 4 units and under and specially for 5 and above which is considered commercial. Focus on community banks they have more flexibility. I would also call as many lenders to find those that have 25 year amortization periods most will not offer it. As @Drew Vukov stated most will have only 70-75% LTV and 20 year amortization schedules and under but if you dig deep enough some will offer 80% LTV and 25 year amortization which will give you more cash flow.

@Bill Douloumbakas Try to reach out to a general real estate agent in the area to find out who has sold most of the 3-10 units on the mls recently that person should be the person to talk to.

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