Greetings. I am currently residing in central California looking to undertake my first fix-n-flip in and around the Pittsburgh area, but have a limited idea on what I'm doing. I purchased both of J Scott's books, and am making my way through them as fast as I can. Being that I am a remote investor, is there anyone out there with experience in this geographic location (Pittsburgh) that might be able to walk me through the process. I am in contact with an agent in that area to pinpoint a "farm" meeting the three criteria J outlined in his book, but apart from that I'm sort of stuck. Any and all input is greatly appreciated.
Remote fix-n-flips can be done fairly simply, as long as you have solid eyes and ears watching for your best interest. Hiring the right person that will be able to give you real-time updates and keep projects moving as they should. It can be tedious to find the right person, but if you utilize the right resources, you can definitely pull off a cross-country flip with no problem. Just do your due diligence and all will work as it should. Maybe even consider a project manager. If there is anything that I can help with, please let me know!
@Joel Lwanga I'd encourage you to find some boots on the ground who is local to the pittsburgh market so they can keep an eye on the property for you
Find a reputable contractor and someone who can do weekly inspections of the project to keep you updated.
Hey @Joel Lwanga , I'm in southern California and I'm investing in Pittsburgh as well! I have a property under contract right now and have discovered a few things (disclaimer: I'm new to the area too but have learned several things already). Pittsburgh is a really interesting market because the rental demand is strong, but a majority of the homes are 100+ years old and need a lot of work. As a result, I've found (along with other investors in BP investing in Pittsburgh), that GCs are very difficult to secure right now. There is so much rehab and investing going on from retail and investors with deep pockets (hedge funds), that contractors are booked at retail prices, and finding a good contractor willing to spend time on investor level prices is hard to find, for now. I've reached out to several contractors, only 1 has returned my call and they seem ify. Keep in mind that you can still find good subcontractors, but you may need to manage the entire rehab yourself (or find a PM or residential construction project manger).
I don't want to discourage you, I'm just letting you know what I've found. Through several property walkthroughs and studying comps, here are some things I've noticed:
- Closing costs are more expensive than you think! Going through a purchase right now, within Pittsburgh city limits, all real estate transactions charge a 2.5% Transfer Tax on the purchase amount (ouch!). Property taxes are a bit high as well. Make sure you account for these in your analysis.
- A majority of these older properties only have 1 bathroom (often times with really strange layouts/captive rooms), but I've found significant value changes for 1 1/2+ bathrooms in a property, so if you can add even a half bath, you're ARV will be much higher.
- Water seepage and moisture is extremely common. That's why most properties here have unfinished basements and run dehumidifiers often. Don't count on finishing the basement unless it's uncommonly dry at that location.
- ARVs range pretty drastically based on the area of Pittsburgh. Make sure that the comps are very centralized to the property in question, you may need to run comps on a larger date range, than the geographic area. 2 miles from my property shows a $80k difference in value for a similar property (and I'm not even in a warzone).
This is what I've discovered so far, I really hope it helps. I think there is a ton of opportunity here, but it's very different than Cali, lol, and requires a lot of learning.
I'd be more than happy to talk to you further if you'd like. Good luck!
Hey Joel, I live in Pittsburgh (born and raised) and am just getting started out in real estate investing, currently rehabbing my first investment property. Finding good contractors has been difficult for me so far, which seems to be a common problem. Feel free to DM me with any specific questions about neighborhoods, etc. and I'll help if I can. All the best!