Is Pittsburgh market good for investors?

24 Replies

Hi

I am considering to invest/build large portfolio of SHF and thinking about the Pittsburgh area due to the Hi return and other strong economic factors.

I recently read contradictory views on the feasibility of investing in Pittsburgh, despite very good economic factors in the area.

I would love to have the opinions of those who know the Pittsburgh market very well.

Thanks.

LIved here my whole life and watched the City change and grow.  And I work in the industry...happy to share if you wish via phone.

@Alon Gilmore I'm making money here so it gets my approval. Cash flow is solid and there are a ton of gentrifying areas seeing some good appreciation. City is reinventing itself. Lots of neighborhoods are very street by street but if you know the areas there is a lot of opportunity for sure. 

I moved here from Denver (crazy hot and crazy expensive market) 3 yrs ago. Before that I lived in south FL...I am a remodeling contractor and haven't had to advertise for the past year and a half. There is so much construction going on in what seems like every area in Pittsburgh. It's very affordable to live here, it's the friendliest place I've ever lived, and we fully intend on buying rentals for long term cashflow once I get more educated. There are alot of tech companies setting up here too, which means a higher income demographic. 

Originally posted by @Aaron Froggatt :

@John Theriault

Wabash, PA? That’s interesting. Is that an actual independent jurisdiction?

AF

Haha I don't know where Wabash is, not sure why it shows that as my location! I live in Upper St Clair though, and generally my projects are in the south hills, north side, and within 10 miles radius from downtown.

 

We have a SFR in McKeesport, just outside of Pittsburgh. It has decent cash flow, and it was at a low enough price point to purchase as a way to jump into the game of OOS investing with some upside and not much risk. Now we are on the lookout for more!

Originally posted by @Dennis M. :

the friendliest place you ever lived ? Geez where were you from before that ? Detroit ? Compton ?South side of Chicago ?

Haaa not quite. But compared to where I grew up in CT, then living in south florida, then denver, yes Pittsburgh is absolutely friendlier than those places. Drivers actually have some courtesy here too, esp with the insane curvy roads that lead to tunnels and bridges. It's nice that people actually let you merge. Except for the Port Authority bus drivers, they dont follow any kind of rules or laws

 

Originally posted by @John Theriault :
Originally posted by @Dennis M.:

the friendliest place you ever lived ? Geez where were you from before that ? Detroit ? Compton ?South side of Chicago ?

Haaa not quite. But compared to where I grew up in CT, then living in south florida, then denver, yes Pittsburgh is absolutely friendlier than those places. Drivers actually have some courtesy here too, esp with the insane curvy roads that lead to tunnels and bridges. It's nice that people actually let you merge. Except for the Port Authority bus drivers, they dont follow any kind of rules or laws

 


I go through those bridges once a month probably . I have found the opposite to be true in fact every time I’m in Pittsburgh I say “ who on earth would want to live here?” Lol but in all fairness I am a country red neck who dislikes any city  

 

Originally posted by @Aaron Froggatt :

@Dennis M.

We all know the holy water of Lake Erie canonizes all its residents, but most of us “Yinzers” do try to keep the faith.

AF

Haha I live right between Erie and Pittsburgh . 

 

Originally posted by @Trevor Demel :

@Jesse Rivera

Read your blog and looked at some properties in Pittsburg. I found a couple of duplexes for $90000. I am not familiar with the Pittsburg market. Are these prices for units that are in dangerous or risky areas?

It depends. You can definitely find some great cash flow duplexes in that range, in great working class neighborhoods (not the hood), but I couldn't tell you unless I knew the addresses. Pittsburgh changes from neighborhood to neighborhood, from street to street. 

I'm actually in Pittsburgh right now checking on our projects and doing a lot of networking. Every time I come here I get more excited about the investing possibilities.

 

@Jesse Rivera

Thank you for this article and reaffirming my decision to invest in Pittsburgh! I just got my preapproval letter today on a duplex in McKeesport and working on the process of getting the first of many properties in the Steel City.

I have a property in Cleveland that I bought in 2017. It was a great bargain at the time and now, I can’t find anymore like it. It’s fully rented out and appreciated by close to 40%. Buffalo was also on the radar but again, 2 years too late. I decided to look south and Pittsburgh, which I never considered, popped up. I did my research and decided to invest at least one property there. However, the more I researched on Pittsburgh’s future, the more I felt confident I made the right decision.

Hopefully, I’ll close on this property by the end of the month and by next spring, have some funds for another. My cousin and sister are both interested in real estate and we are going to make a trip out there when I return to the East Coast.

@Alon Gilmore I am considering investing in large multifamily in the Pittsburgh area currently. Prices have rallied 37% in Allegheny County (Pittsburgh) since their 2010 'fair valuation' levels. The city has experienced one of the strongest price performances in the Northeast this market cycle.

In spite of that the city is though undervalued at -8% as of Q1 2020 based on historical price-income relationship. It is on my list of out-of-state markets to invest in.

For those who commented on McKeesport (or maybe for OOS investors considering McKeeport), I wanted to give some perspective as a Pittsburgh native. I live about 15 minutes away and have attended a church there for twenty years. Most of it is a pretty rough area: drugs, violence, etc. There are better parts (especially bordering White Oak), and a few pockets that are very well maintained, holdovers from McKeesport's heyday when the steel mills boomed, but the good areas are definitely the exception now.

I have a close family friend with about 20 units in McKeesport who has done okay there, but definitely has to deal with the issues that come with lower-income renters. Finally, another guy from my church who has lived in one of the better parts of McKeeport for probably 30 years recently told me that he's considering selling his house and moving now while the getting is good, noticing the expanding creep of the bad parts of the city.

So, just be careful and know what you're getting into if you're looking to invest there.

Originally posted by @Alon Gilmore :

Hi

I am considering to invest/build large portfolio of SHF and thinking about the Pittsburgh area due to the Hi return and other strong economic factors.

I recently read contradictory views on the feasibility of investing in Pittsburgh, despite very good economic factors in the area.

I would love to have the opinions of those who know the Pittsburgh market very well.

Thanks.

 The hardest thing for people out of state is building a network I think. I work with a lot of out of state investors and the ones that do it best have a good handle on their expectations. Most of the property management firms are average at best, so it's good to find someone local to whichever part of the city you select to work in. 

Additionally the vast majority of the homes are very old. So if you don't have a good handle on what you need to fix from your inspection versus what you are OK leaving as is you could go broke trying to update them to be the same as a new house. Many markets see an old house as a 1990s build. Close to the city in Pittsburgh the newer construction is 1950s/60s. So when renovating you need to make a lot of cost effective decisions without gutting the place, but still keeping it safe. If you're the kind of person who wants new plumbing, new electrical, new HVAC, newer roofs on everything, then I don't think it's the right call. 


However if you can manage those expectations it can be very profitable. I see a lot of out of towners want to update everything from their inspections and they either terminate a lot of deals, or go way over the top in the renovations


We also have no qualifications for contractors as far as exams or anything. You just need to get insurance and submit a license application to the state. So if you don't work with someone that has strong contractor connections or work on building them yourself your projects will not go smoothly.