Help me understand this listing
Hey all.
I'm new to BP and REI and so I spend most of my time lurking and trying to absorb information. I came across this listing in the Pittsburgh area:
- MLS#1351695
- https://www.zillow.com/homedetails/2004-Gregory-St...
- Duplex. 3bd + 1ba, 1bd + 1ba
- Somewhat dated, could use cosmetic updates but otherwise appears to be in good condition
- $129,000
I've spent some time looking at rental listings in the immediate area and my rough estimates are that you could get at least $500/mo for the 1bd and $1000/mo for the 3bd for a total of $1500/mo before any updates or renovations. Given the asking price and the fact that this duplex appears to be immediately rentable, this stands out to me (as a beginner) as a good deal. However, there are some things that don't make sense to me:
- The properties in the nearby area are listed for much more
- Judging by what I read on BP, most good deals are found off-market these days whereas this property is on the MLS
- This property has been listed for 6 weeks and is not even under contract, contingent, accepting backup offers, etc. If this was a good deal then it wouldn't last that long
- The description doesn't mention anything about the property needing work or TLC
Essentially what I'm asking is, what am I missing? Is this not actually a deal? Are my estimates off? Is there likely a major repair that the seller is trying to hide? Did this deal just slip through the cracks?
A couple of things:
1) Just because you are hearing something on BiggerPockets doesn't make it true for all metro areas or even all neighborhoods of all metro areas. Real Estate is hyper local, and deals do come on the MLS in Pittsburgh.
2) Have you seen the house in person? I've seen a ton of amazing deals on paper, but when I visit I notice the house is held together with duct tape and it turns out they have no occupancy permit to be a triplex or whatever.
3) The fact that it's been on for 6 weeks does tell you for some reason investors in the area are not interested - because in my experience most multi-units have investors crawling all over them on the listing day, but that could be a variety of reasons and honestly I've seen many similar deals in the slopes over the years - only way to know for sure is go see it. It looks vacant which tells you someone is having trouble renting it.
Hey @Garrett Holbrook! I’m also somewhat new at bigger pockets looking at getting into my first deal! From what information I have gathered, over my learning period, is that the south side slopes can be hard to find the right property. I completely agree with @Phil Anderson about needing to physically look at a property and see what the value is. That type of area is a very specific street by street case when it comes to good and bad rentals in the area. If I were you I would take a drive by the place and look beyond the property to see if it’s an overall solid street to get renters in. Otherwise it won’t matter what’s your numbers say if no one wants to rent the property because they feel usafe in the area. I would love to chat sometime to get your overall personal perspective in the market as well! Best of luck!!
@Garrett Holbrook please ask the agent why the last deal fell through. It was most likley an inspection reason and there may be a report that you can review before seeing the property. I think you may be high on the 3 bedroom rent because that area is saturated so I would estimate lower on rents to be safe.
@Garrett Holbrook It says the owner is currently trying to get occupancy changed from single family to 2 unit, that might have something to do with it also.
You need to run through the analysis. Down payment etc. There is a price for any rental. This is C neighborhood.
Originally posted by @Jeremy Taggart:
@Garrett Holbrook It says the owner is currently trying to get occupancy changed from single family to 2 unit, that might have something to do with it also.
That could definitely have something to do with it. Last time I checked (which was a while ago), the city wanted off street parking to allow the switch.
All good advice above. Need to take a drive-by if you don't know the area. Also run some basic numbers (do you know all the costs to consider?). It will help you evaluate rentals, in general, better.
Before the occupancy permit issue, it seemed like not an amazingly good or bad deal.
Zillow is often wrong as to the status of the property. Confirm with tour agent that it is still available
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I appreciate the input guys. I'm actually not local so I won't be able to check out the area or see the house in person. I spend a lot of time looking at listings in all sorts of areas just out of pure curiosity and I wanted to hear what more experienced folk thought of this.
@Jeremy Taggart @Jay Belcher Where do you see that information? Or is that just through word of mouth / talking to the agent? I'm looking at the MLS listing and the county website
@Garrett Holbrook It doesn't matter how much other people are asking for their properties. You have to look for recently sold properties. Did you already compare it to actual comps (sold properties in the last 6 months?)
I only see one furnace so you'd probably have to pay for heat. Check with the city if this is a legal 2 unit building. A lot of the times people turn SFH into two units to live in one and rent the other one but they don't always apply for the conversion. This is probably a very old building so don't forget to add a good amount for CapX. Remember to do some research on vacancy rates. Judging by the pictures and price point, this is probably either a C or D neighborhood. I wouldn't purchase any property in a D neighborhood so make sure you do good research on the area before you commit.
Great advice as usual from everybody.
If you're not going to see the house yourself, you absolutely need someone you trust to do a walk through. The skills of the photographers are very impressive and 95% of houses marketed online are misleading in my humble opinion!
Best of luck, Stay hungry!
I'm pretty sure you're missing a water heater in pic 15 lol....
I'd pass this isn't worth it at all. Almost everything in that house looks to be done as cheaply as possible and probably NOT by qualified people. It's not rent ready, at min it's going to need probably appliances, paint, and flooring. That's if you don't find any other surprises along the way and from just looking at 15 pics online.
Plus if zoning is off that's just another headache not worth dealing with.....
Check out these, offer below list and they'd be easier to manage then what you suggested. Assuming you don't care about location... they're in KC metro (on the outskirts). They're not even the best examples, just something I found quickly, that's rent ready, and EASY to manage out of state. Think of the HOA as a prop manager.
This is probably like 11-1200 mo and rent ready.
https://www.redfin.com/MO/Grandview/14055-Dunbar-C...
This probably like 800-1k
@Garrett Holbrook I have MLS access from being an agent and it was in the agent notes section that only shows up if ur an agent.
@Garrett Holbrook get an agent
Hey @Russell Brazil you liked one of my Instagram posts. I didn't know you were on there. You got to have all your social media covered. I'm thinking about connecting with people on Tender next to expand the brand.