Long Distance Buy and Hold | PA

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Long Distance Buy and Hold | PA

Jeff LamothePro Member
Member since 2019 · 91 posts · 66 votes

Hello BP,

   Just finished reading David Greene's Long Distance Real Estate investing book, which got me motivated.  I am based out of Connecticut and looking for out of state, buy and hold properties.  I have looked into several different markets throughout the country, including the South, Mid-West, and West Coast.    Based on my preliminary analysis, the Mid-West appears to be the way to go.   

But since this will be my first out of state market, I would prefer to find something within a couple hours driving distance (2-3 hours), that has balanced landlord/tenant laws.   My search has led me to Pennsylvania, where I've read some good BP forum discussions for Allentown, Harrisburg, and Scranton.  I would've been interested in Philly, but it is my understanding that the city leans towards tenants or even hostile towards landlords.   

I would be interested in getting feedback from other investors in the Pennsylvania (non-Philly) market and let me know how they are doing with rentals.   

Below are some of my key criteria for a long distance property:

1) Total acquisition and repair cost $100K (assuming single family).   Willing to put in more for a duplex.  

2) Meets the 1% rule of rental income / purchase price.  Key target would be 1.25% to 1.5% rental income. 

3) Balanced landlord/tenant laws, but I wouldn't mind landlord friendly regions.  

4) At least 4 to 5 Property Management companies, with google ratings of 4.5 and higher.  

5) No warzones.   Will accept some moderate petty crime, but no major violent crimes.  

6) Stable job market.   (5 to 10% job growth in last 10 years).  

Thanks in advance.  

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Anthony Angotti
Real Estate Agent · Pittsburgh, PA · Member since 2015 · 1k+ posts · 846 votes
5y
Originally posted by @Jeff Lamothe:

Hello BP,

   Just finished reading David Greene's Long Distance Real Estate investing book, which got me motivated.  I am based out of Connecticut and looking for out of state, buy and hold properties.  I have looked into several different markets throughout the country, including the South, Mid-West, and West Coast.    Based on my preliminary analysis, the Mid-West appears to be the way to go.   

But since this will be my first out of state market, I would prefer to find something within a couple hours driving distance (2-3 hours), that has balanced landlord/tenant laws.   My search has led me to Pennsylvania, where I've read some good BP forum discussions for Allentown, Harrisburg, and Scranton.  I would've been interested in Philly, but it is my understanding that the city leans towards tenants or even hostile towards landlords.   

I would be interested in getting feedback from other investors in the Pennsylvania (non-Philly) market and let me know how they are doing with rentals.   

Below are some of my key criteria for a long distance property:

1) Total acquisition and repair cost $100K (assuming single family).   Willing to put in more for a duplex.  

2) Meets the 1% rule of rental income / purchase price.  Key target would be 1.25% to 1.5% rental income. 

3) Balanced landlord/tenant laws, but I wouldn't mind landlord friendly regions.  

4) At least 4 to 5 Property Management companies, with google ratings of 4.5 and higher.  

5) No warzones.   Will accept some moderate petty crime, but no major violent crimes.  

6) Stable job market.   (5 to 10% job growth in last 10 years).  

Thanks in advance.  

 I'm an investor and Realtor in Pittsburgh. 

Most of these are fine but two notes. 

4) At least 4 to 5 Property Management companies, with google ratings of 4.5 and higher.

Don't even go on google ratings. Property management companies get trashed by tenants and hardly ever get positive reviews. I would join whatever area you chooses facebook groups for investors (if they have them) and ask for recs there. Be warned, there's really no such thing as an exceptional property management company. At least not in my experience unless you find someone with a niche in a submarket in whatever larger market you invest in. I'd prioritize finding someone for a specific neighborhood vs a good city wide manager. The larger ones tend to be more quantity versus quality driven. 

5) No warzones. Will accept some moderate petty crime, but no major violent crimes.

If you're investing cities there's going to be a mix of neighborhoods . . . warzone is a harsh term and probably not fit for 95% of neighborhoods out there. Drugs are omnipresent today. Violent crime can happen anywhere. And mostly you can find good tenants anywhere. It just takes longer in lower income neighborhoods because less people meet the financial criteria. Just be wise with the streets you are on within specific neighborhoods versus the neighborhood as a whole. Just my two cents, by "warzone" is quite a rough term that I wouldn't say applies to most places. It's not like there are drive by shootings daily in even the rougher neighborhoods. . . 

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  • Charlie Cooper
    Investor · Lehigh Valley, PA · Member since 2021 · 33 posts · 23 votes
    5y

    I think your best bet for the cheaper properties more fitting to your criteria would be the Wilkes-Barre up to Scranton along I-81. The market there like everywhere else is hot, but there are lower-priced SFHs & multi's (with low but not crazy low rents) and most of those areas are cheaper taxes. It's much more of a blue-collar type environment. I can't speak to any management companies in that area but I'm sure there are some. 

    3Reply
  • Jeff LamothePro Member
    OP
    Member since 2019 · 91 posts · 66 votes
    5y

    Thanks for the feedback @Charlie Cooper.

    0Reply
  • Rich O'Neill
    Contractor · Chadds Ford, PA · Member since 2015 · 567 posts · 460 votes
    5y

    @Jeff Lamothe I am a big fan of Delaware County. Just outside of the city, public transport is easily accessible, values make sense, 1% rule is no problem (though taxes are relatively high, so work that in), and courts are balanced from my experience. This year has been crazy with the courts but that's to be expected everywhere. I would hope it gets back to normal soon. 

    My PM is great in the area. There are a few other options as well. Worth checking out this market! 

    1Reply
  • Lawrence Ratliff
    Investor · Otay Ranch-Chula Vista, CA · Member since 2013 · 32 posts · 41 votes
    5y

    Hi Jeff, I have similar rental criteria and I am looking to invest in the mid-west, would you mind sharing some of the cities you found that meet your criteria in the mid-west?  Thanks in advance!  Lawrence

    0Reply
  • Jeff LamothePro Member
    OP
    Member since 2019 · 91 posts · 66 votes
    5y

    Thanks for the feedback @Rich O'Neill.  I will certainly look into Delaware county and see if I like what I see and the numbers make sense.  

    1Reply
  • Jeff LamothePro Member
    OP
    Member since 2019 · 91 posts · 66 votes
    5y

    How's it going @Lawrence Ratliff.   Some the midwest markets that appears to meet my criteria includes Columbus Ohio, and Milwaukee, WI.   The only exception for Milwaukee is that it didn't have that 5 to 10% job growth based on Bureau of Labor Statistics.   I can imagine Cleveland would be a good ideal as well, but I have to dig into it and find the desirable working class neighborhoods.   

    0Reply
  • Lawrence Ratliff
    Investor · Otay Ranch-Chula Vista, CA · Member since 2013 · 32 posts · 41 votes
    5y

    @Jeff Lamothe Thank you! I like those cities as well! I live in San Diego and my first few properties are in Dallas. I needed to be really far from CA to find my $100k Sale Price /$1k rent properties. Most of my property management is via text and email so distance plays less of a role I feel. Dallas has really jumped up so I am moving into other markets. I am looking at Cleveland, Indie, Birmingham, Montgomery, and Cincinnati as well. I really like NE Indie Devington & Lawrence. Thanks again for sharing, and much success to you!

    2Reply
  • Austen Mueller
    Real Estate Agent · PA · Member since 2021 · 240 posts · 131 votes
    5y

    Check out Slate House Group. We manage all over central PA. Right now our team is doing a lot of deals in York/Harrisburg/Lebanon/Lancaster market places.   

    0Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    5y
    Originally posted by @Jeff Lamothe:

    Hello BP,

       Just finished reading David Greene's Long Distance Real Estate investing book, which got me motivated.  I am based out of Connecticut and looking for out of state, buy and hold properties.  I have looked into several different markets throughout the country, including the South, Mid-West, and West Coast.    Based on my preliminary analysis, the Mid-West appears to be the way to go.   

    But since this will be my first out of state market, I would prefer to find something within a couple hours driving distance (2-3 hours), that has balanced landlord/tenant laws.   My search has led me to Pennsylvania, where I've read some good BP forum discussions for Allentown, Harrisburg, and Scranton.  I would've been interested in Philly, but it is my understanding that the city leans towards tenants or even hostile towards landlords.   

    I would be interested in getting feedback from other investors in the Pennsylvania (non-Philly) market and let me know how they are doing with rentals.   

    Below are some of my key criteria for a long distance property:

    1) Total acquisition and repair cost $100K (assuming single family).   Willing to put in more for a duplex.  

    2) Meets the 1% rule of rental income / purchase price.  Key target would be 1.25% to 1.5% rental income. 

    3) Balanced landlord/tenant laws, but I wouldn't mind landlord friendly regions.  

    4) At least 4 to 5 Property Management companies, with google ratings of 4.5 and higher.  

    5) No warzones.   Will accept some moderate petty crime, but no major violent crimes.  

    6) Stable job market.   (5 to 10% job growth in last 10 years).  

    Thanks in advance.  

     Columbus, Ohio meets a lot of those requirements

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
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    0Reply
  • Chris K.
    Attorney · Nashville, TN · Member since 2015 · 1k+ posts · 1k+ votes
    5y

    @Jeff Lamothe

    A few thoughts: 

    1. Most tertiary markets like Harrisburg and Scranton/Wilkes-Barre should meet most of your qualifications except maybe number 6. I just don't know what the job growth data in the past 10 years is. 

    2. Except for Philadelphia and Allegheny County, most landlord-tenant laws in Pennsylvania is the same. So there's no meaningful differences outside of those two areas. 

    3. You should be able to meet the 1% rule in Pennsylvania. Most properties should meet the 2% rule. 

    4. I would note that Pennsylvania areas outside of Philadelphia and Pittsburgh rely heavily on cars to get around. For example, my guess is that most people in Luzerne County will have a 20 to 30 minute commute in non-city-traffic to get to work. So you often need to look beyond a specific city limit when you are evaluating a market. 

    Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

    3Reply
  • Jeff LamothePro Member
    OP
    Member since 2019 · 91 posts · 66 votes
    5y

    Thanks for the feedback @Chris K.  

    1.  The job growth at those areas are a little mixed.  It appears as if Scranton is at negative 5% loss over the past 10 years and Wilkes-Barre is showing 6% growth.   

    2. Thanks for mentioning Allegheny County.  I know that Philadelphia has differences in their landlord-tenant laws.  

    0Reply
  • Travis Sterner
    Rental Property Investor · Pittsburgh, PA · Member since 2018 · 39 posts · 18 votes
    5y

    Westmoreland County is a 30 minute commute to Pittsburgh and has worked well for me. 

    0Reply
  • Jeff LamothePro Member
    OP
    Member since 2019 · 91 posts · 66 votes
    5y

    Thanks for reaching out to me @Lizbeth Vaquero.   I am looking to check around the area pretty soon and would love to meet with realtors that understands the market.  I will send you an email. 

    0Reply
  • Jeff LamothePro Member
    OP
    Member since 2019 · 91 posts · 66 votes
    5y

    Thanks for the tip on Westmoreland Cty @Travis Sterner.  I also heard some good things about Pittsburgh as well.   

    0Reply
  • Gary Swank
    Real Estate Agent · Pittsburgh, PA · Member since 2014 · 822 posts · 255 votes
    5y

    @Jeff Lamothe Pittsburgh is a good option for many investors, both local and remote. Though finding the right property is very tricky here as neighborhoods change, sometimes dramatically, street by street. Yes there are war zones to avoid but that's just like any other major city. Best to get with someone that really knows the area and can help you find the property that works with your numbers and can offer cash flow and strong returns. Inventory is still considered low as we remain in a seller's market. But deals can still be found in this amazing city. 

    Pittsburgh has really seen a dramatic transformation over the years. With development initiatives, many neighborhoods are going through a renaissance, if you will. It has for some time now attracted major corporations into the area and is now considered the "2nd silicon valley" leading in technology accompanied by it's already stellar medical reputation. This translates into many professionals looking for places to rent/buy. But again, you really have to know the area to invest successfully here. Glad you are reaching out and I wish you the best in your endeavors. 

    1Reply
  • Matthew K.
    Investor · Pittsburgh, PA · Member since 2020 · 36 posts · 16 votes
    5y

    Pittsburgh (city) just swung badly in favor of the tenants with a no eviction policy, which includes holdover tenants and a $10,000 fine per eviction if you evict someone.  I would be careful if you invest there. 

    1Reply
  • Gary Swank
    Real Estate Agent · Pittsburgh, PA · Member since 2014 · 822 posts · 255 votes
    5y

    Allow me to say something about the eviction moratorium here in Pittsburgh. First off, it's not just Pittsburgh, but nationwide in many cities. 2nd of all, I just posed this topic here as well as in other places and I've seen several investors offer advice, ranging from the CARES act (although it is cumbersome and not everyone qualifies for rental assistance). Some investors stated that their tenants have used grants or other ways to pay up their rent. Some of stated that because they have strong property managers who have vetted their clients, invest in A & B areas and have worked with their tenants, that they have managed just fine through this crisis. Still others have used these tools, or not, and are still struggling because of the moratorium. This is very unfortunate as yes, mortgages still need to be paid. It's also become somewhat of a deterrent to invest in our area as well as other areas that have similar eviction/rent moratoriums.

    Good news and some glimmer of hope, is that in life everything passes. Once the pandemic subsides and it is slowly, I'm sure we will see a return to some form of normalcy. How long, I have no idea. My crystal ball is cloudy at this moment. lol. But when it does, rents will be due in full or evictions will resume. But in the immediate, there is an upcoming meeting scheduled for March 26th to discuss exemptions and "good cause" applications that Pittsburgh investors could use when they believe that their tenants are NOT going through Covid hardships and still NOT paying the rent. Nothing is of course set in stone, and the aforementioned are a combination of my opinions and the opinions/situations of others. But I can't stress enough how important it is to be diligent about getting the latest information because I do believe that Pittsburgh is still one of the best cities to invest in. This is just an abnormal time that we share with many other cities. 

    0Reply
  • Matthew K.
    Investor · Pittsburgh, PA · Member since 2020 · 36 posts · 16 votes
    5y

    @Gary Swank The city decided to create a legislation to handle it themselves and it is killing landlords and property managers.  The legislation goes well above the CDC memorandum to include holdover tenants with a huge fine if you find some way to get them out.  I can tell you personally that landlords are loosing their homes in Pittsburgh and apartment complexes are either looking to sell or are considering going out of business.  We need help and we need this law to change.  If you want proof of this, Pittsburgh just made the top 40 cities in the nation for active forclosures.  We need help, badly.  

    0Reply
  • Gary Swank
    Real Estate Agent · Pittsburgh, PA · Member since 2014 · 822 posts · 255 votes
    5y

    @Matthew K. And yet many are surviving. Foreclosure lists often include many factors not just a segment of those in real estate. Please kindly share the link that shows the ranking. I think it would be beneficial for all to see.  I agree Investors need help and the law needs changed. That's why solidarity is important and hopefully Pittsburgh investors will come together to help that change. 

    0Reply
  • Matthew K.
    Investor · Pittsburgh, PA · Member since 2020 · 36 posts · 16 votes
    5y

    @Gary Swank - Thanks for the feedback.  I hear what you are saying, but I am seing friends loose their homes becuse of this local law while others are selling since they dont want to deal with this any more.  I am surprised that our local government is choosing who fails and who survives too as I was in the understanding that the government should be helping those in need.  Below is one link from a quck search.  Feel free to reference any of the others at this point too. 

    Again - Landlords within the city limits of Pittsburgh have some of the strongest laws being applied in the country at the moment.  We need help as organizations are failing here!  


    https://finance.yahoo.com/news...

    0Reply
  • Jim K.
    Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
    5y

    Pittsburgh is an insular city and very often deeply unkind to long distance investors.

    1Reply
  • Anthony Angotti
    Real Estate Agent · Pittsburgh, PA · Member since 2015 · 1k+ posts · 846 votes
    5y
    Originally posted by @Jeff Lamothe:

    Hello BP,

       Just finished reading David Greene's Long Distance Real Estate investing book, which got me motivated.  I am based out of Connecticut and looking for out of state, buy and hold properties.  I have looked into several different markets throughout the country, including the South, Mid-West, and West Coast.    Based on my preliminary analysis, the Mid-West appears to be the way to go.   

    But since this will be my first out of state market, I would prefer to find something within a couple hours driving distance (2-3 hours), that has balanced landlord/tenant laws.   My search has led me to Pennsylvania, where I've read some good BP forum discussions for Allentown, Harrisburg, and Scranton.  I would've been interested in Philly, but it is my understanding that the city leans towards tenants or even hostile towards landlords.   

    I would be interested in getting feedback from other investors in the Pennsylvania (non-Philly) market and let me know how they are doing with rentals.   

    Below are some of my key criteria for a long distance property:

    1) Total acquisition and repair cost $100K (assuming single family).   Willing to put in more for a duplex.  

    2) Meets the 1% rule of rental income / purchase price.  Key target would be 1.25% to 1.5% rental income. 

    3) Balanced landlord/tenant laws, but I wouldn't mind landlord friendly regions.  

    4) At least 4 to 5 Property Management companies, with google ratings of 4.5 and higher.  

    5) No warzones.   Will accept some moderate petty crime, but no major violent crimes.  

    6) Stable job market.   (5 to 10% job growth in last 10 years).  

    Thanks in advance.  

     I'm an investor and Realtor in Pittsburgh. 

    Most of these are fine but two notes. 

    4) At least 4 to 5 Property Management companies, with google ratings of 4.5 and higher.

    Don't even go on google ratings. Property management companies get trashed by tenants and hardly ever get positive reviews. I would join whatever area you chooses facebook groups for investors (if they have them) and ask for recs there. Be warned, there's really no such thing as an exceptional property management company. At least not in my experience unless you find someone with a niche in a submarket in whatever larger market you invest in. I'd prioritize finding someone for a specific neighborhood vs a good city wide manager. The larger ones tend to be more quantity versus quality driven. 

    5) No warzones. Will accept some moderate petty crime, but no major violent crimes.

    If you're investing cities there's going to be a mix of neighborhoods . . . warzone is a harsh term and probably not fit for 95% of neighborhoods out there. Drugs are omnipresent today. Violent crime can happen anywhere. And mostly you can find good tenants anywhere. It just takes longer in lower income neighborhoods because less people meet the financial criteria. Just be wise with the streets you are on within specific neighborhoods versus the neighborhood as a whole. Just my two cents, by "warzone" is quite a rough term that I wouldn't say applies to most places. It's not like there are drive by shootings daily in even the rougher neighborhoods. . . 

    4Reply
  • Jeff LamothePro Member
    OP
    Member since 2019 · 91 posts · 66 votes
    5y

    Thanks for the input on the search criteria @Anthony Angotti.  

    For item #4, I did notice that some of the poor ratings did come from tenants and can accept that if they are being evicted or being penalized for breaking lease rules they would post bad ratings.    But then I see complaints about Management companies not responding to phone calls or responding to maintenance requests, it does raise a red flag for me.   I am fine with adding a step to verify the quality of the Property Management company by connecting with other investors operating in the area.   

    Item #5 "Warzone":   It is true that that term can a bit harsh and scare off folks.    I am trying to avoid a situation that I experienced in my latest property, where it took me over 2 months to fill a vacancy due to the perceived reputation of the neighborhood. I certainly can appreciate that a city/town comprises of a mixture of different neighborhoods where some areas can see more criminal activity that others. 

    0Reply
  • Jeff LamothePro Member
    OP
    Member since 2019 · 91 posts · 66 votes
    5y

    Great discussion @Gary Swank and @Matthew K. This pandemic is definitely making things ugly.  Is it true that this new ordinance forces property owners to renew rental agreements with tenants, although the tenant is behind on rent?  

    0Reply
  • Matthew K.
    Investor · Pittsburgh, PA · Member since 2020 · 36 posts · 16 votes
    5y

    Below is the bill.  In short, it makes it so that any verbiage in your lease (including end date) does not apply. 

    https://pittsburgh.legistar.co...

    0Reply
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