Updated over 9 years ago on . Most recent reply
Pittsburgh Buy and Hold
Hey BP Community,
I‘ve seen a lot of people looking for success stories, so here’s mine… This is a buy and hold property in the South Side area of Pittsburgh, PA that I purchased in March. Please feel free to comment or message me. It’s always nice to hear feedback for improving the next deal.
I was targeting a SFH in the South Side area of Pittsburgh, an up and coming area where many college (Pitt, Duquesne, and Carnegie Mellon are all a 5-10 minute drive away) and young professional people live. I took the "funnel" approach that many of the posts and podcasts speak about. Reviewing/ running numbers on roughly 100 properties, touring ~30 properties, and eventually making offers on three. As a side, I currently live in Washington, DC (originally from Pittsburgh). The DC market is too rich for me, so I went back to a more affordable market that I know.
I toured over a three month period – coming to Pitt on a couple of different occasions to view. In the end, there were three in which the numbers made the most sense.
With a partner, I eventually ended up purchasing a 3 bed 2 full bath single family home two blocks away from the main road where restaurants, shops, etc. can be found.
Working with my partner, we put down 20 percent - borrowing $120,000 (on a 30 year fixed) from a traditional lender and we put down a combined $30,000 into the mortgage. Closing costs came out to roughly $7,000, and we put roughly $5,000 into renovations - out of pocket. These renovations included painting all six rooms of the house, significant landscaping and installing carpet in the three bedrooms upstairs. I did the painting and landscaping myself to save on labor and hired a company to install the carpeting. I believe these simple renovations increased the value of the property significantly. ARV is now roughly $180,000.
The house currently rents for $1,500, so I’m very close to the 1 percent rule. I pay water and the tenants pay all other utilities.
How I acquired these tenants is an interesting story for another time, but the property management – that do myself – has been worthwhile learning experience. I would recommend all newer people manage their first few properties.
Now, on to the next deal…