New York, NY · Member since 2016 · 23 posts · 5 votes
Hello,
Looking at properties at the moment within Wilkes-Barre, Scranton, Pittston and Nanticoke. I have a few on my radar. Anyone that has had success in flipping in these areas? The properties I’m looking at are below 35k. I had an opportunity to drive around these towns about 3-4 weeks ago. Any input is appreciated.
I live in a suburb of Wilkes-Barre. I would say Pittston is the best area out of the 4 that you mentioned as far as crime rate and school district are concerned.
If you take a quick look at the MLS in these areas, you'll notice that there are many properties listed for under 35k, so just make sure to check your comps to validate that you're truly getting a good deal on the buy side. On the rehab side, again just check the comps to make sure you're not over-improving for the area. For example, buyers in these areas typically aren't expecting granite countertops and floor to ceiling tile in the bathrooms.
If you're looking for a more moderate or higher end flip, or just areas where the demand is higher, I'd suggest expanding your search to a few surrounding suburbs including Mountain Top, Dallas, Shavertown or Clarks Summit.
New York, NY · Member since 2016 · 23 posts · 5 votes
8y
@Dan Marriggi
I am looking to buy and flip. Pittston looks like a decent market and in much better condition then the other towns I've mentioned. Do you self manage your rentals? Any contractors that you can recommend?
I've seen some interesting ones in those areas. Mountain Top and Dallas are a bit out of my price range at the moment but I will definitely keep them in mind.
I am looking to buy and flip. Pittston looks like a decent market and in much better condition then the other towns I've mentioned. The only issue is that population is actually declining based on some reports I have read. Do you self manage your rentals?
Lehigh Valley, PA · Member since 2016 · 144 posts · 91 votes
8y
I have 5 SFR in WB. Never even considered flipping them for the first 5-10 years. I listed all 5 a couple of years ago. 200K, some owner financing and a cask flow of net cash 20+% after ALL expenses! No luck except a couple of tire kickers. With the high cash income, i really don't need to sell them and they don't take much time to manage. All with long-term residents. Would have used the money to buy something else at the time. Moral of this story; know your market.
I've been flipping houses in southeastern PA for the past 11 years. As I read your post there's one thing that really jumped out at me. Price point.
Whenever I'm evaluating a potential fix and flip project I try to target properties that will appeal to the largest amount of people once they are complete. This means targeting median home prices. For me that means ARV's between $225-450,000.
In the beginning of my REI career my target markets had much lower price points. What I found was that these types of properties needed to be exceptional after the renovations to compete for the few QUALIFIED buyers that wanted to buy in these type of neighborhoods. That meant my rehab costs were always a high percentage of my investment. Additionally, buyers at lower price points often will need help with closing costs. That's more money off your bottom line. Lastly, sales are always going to be contingent on an appraisal. That means it doesn't matter the sales price. If the appraisal comes in $5,000 lower than the contract price, the money comes out of your pocket.
There are other reasons I transitioned to median home value properties: lower DOM, stronger buyers, less repairs, less competition, more demand, etc. Ultimately my decision came down to dollars and cents. Instead of hoping for a $30,000 profit, I target $50-75,000 margins. Even when things don't go quite according to plan, the deals are still profitable. I can't say the same about those lower end deals.
Hopefully this helps you decision. Good luck on finding the next flip!