Pittsburgh, PA · Member since 2018 · 9 posts · 0 votes
I’ve read a lot about Pittsburgh investing with most people referencing the ability to obtain cash flow. But what if I want to prioritize quality investments over cash flow?
Are there many other investors that try this strategy? Is it viable in this area?
Currently, I’m looking at areas such as Greentree, Whitehall, Castle Shannon, Mt. Lebanon, etc.
Investor · Pittsburgh, PA · Member since 2015 · 1k+ posts · 1k+ votes
7y
@Cody Williams it will be a challenge to buy is these class of neighborhoods and also reap the benefits of any significant cash flow. Its difficult to have the best of both worlds given the sellers market we are in and the high demand for investment property in the Pittsburgh Market. I love the idea of quality over quantity. Long term I think you will enjoy being an investor over the alternative of buying in lower quality areas. You are going to pay a premium and it will take a lot longer to find the right deal but it only takes a handful to set up your future financially. 10 properties that you buy and hold now worth 1 million dollars will be worth 2 million in 15 years. By that time, if you pay down the principle balance as quickly as possible its not unreasonable to expect to be a multi millionaire with 2 Million in real estate assets and a gross cash flow of $1500 a month per property. Thats a whopping gross passive income of $180,000 a year. Steady and slow wins the race.
I think it may be helpful to understand in more detail what you mean by "quality" investments. If by "quality" you mean a higher-priced property in a better neighborhood, it's certainly possible to achieve this in Pittsburgh. That's not to say you can expect to easily find a property in Shadyside on the MLS and expect it to generate positive cashflow with with a 20% down payment, but I personally have 5 multi-unit properties properties in what most would consider to be A/B+ neighborhoods, all of which generate >$1,000 cash flow/mo. after debt service. It may require networking or finding off-market deals, but it's definitely possible!
But you are correct. I was referring to a better quality of neighborhood and, hopefully, better quality of tenants.
I just wanted to know if it was worth trying this in Pittsburgh. My investment strategy is more passive and long term wealth. I’m not interested in the headaches that come with some of the “higher” cash flow in the C/D areas. Just wanted to see if this was do-able in the area.
Rental Property Investor · Gibsonia, PA · Member since 2018 · 33 posts · 29 votes
7y
IMHO if you are looking for passive investing I would check out some of those crowdfunding platforms out there or a syndication deal.
A lot of the housing stock here, even in the neighborhoods that you mentioned is at best 60-70 years old and worst 90-110 - there are going to be warts with alot of properties and those without, you are going to pay a premium for.
That being said the areas you mentioned are certainly more stable and reliable than the New Kensington, New Castle, Beaver, Mount Oliver, (insert Eastern neighborhood here) where you can find houses for under $20,000
But as @Andy Madden mentioned, anything is possible with the right networking and finding value-adds offmarket.
Pittsburgh, PA · Member since 2018 · 9 posts · 0 votes
7y
@John Fortes @Nick Michaels Thanks for the tips, guys! I am looking into syndication/crowd sourcing and turnkey long-term. But, for now, I am living in Pittsburgh for the next 2 years and would like to try an attempt at fixing up a house as a possible future rental unit. The only problem is that it has to be an area I'm happy living in, which are some of the areas I've listed above.
I want to take the method of having higher quality tenants, as lower quality tenants seems to come with hidden costs that quickly eat away your cash flow. Also, I'm looking for long term wealth, so I figured the method of appreciation was better fitting for my first pick of a property. I'm more focused on the schooling and quality of neighborhood for that reason.
Pittsburgh · Member since 2018 · 16 posts · 9 votes
7y
Hey Cody,
Nice chatting with you yesterday. I would suggest reaching out to @Alex Deacon and @Ian Hoover to get yourself set up with an email list of the types of properties you want. They know the area very well, especially the South Hills. They operate a few different resources that'll prove helpful to you including an agency. I've had nothing but great experiences with them.
Investor · Pittsburgh, PA · Member since 2015 · 1k+ posts · 1k+ votes
7y
@Cody Williams it will be a challenge to buy is these class of neighborhoods and also reap the benefits of any significant cash flow. Its difficult to have the best of both worlds given the sellers market we are in and the high demand for investment property in the Pittsburgh Market. I love the idea of quality over quantity. Long term I think you will enjoy being an investor over the alternative of buying in lower quality areas. You are going to pay a premium and it will take a lot longer to find the right deal but it only takes a handful to set up your future financially. 10 properties that you buy and hold now worth 1 million dollars will be worth 2 million in 15 years. By that time, if you pay down the principle balance as quickly as possible its not unreasonable to expect to be a multi millionaire with 2 Million in real estate assets and a gross cash flow of $1500 a month per property. Thats a whopping gross passive income of $180,000 a year. Steady and slow wins the race.
Multi-Family Syndicator · Abington, MA · Member since 2017 · 603 posts · 347 votes
7y
House hacking works as a means if you can fit it in your criteria. Just have to look hard and network with brokers to buckle down on what they are sending you. Good luck!