Investor · Bellevue, WA · Member since 2016 · 65 posts · 36 votes
Hello BP Community! I'm evaluating whether I buy 3 SFRs near Pittsburg Pennsylvania in New Castle. Two are on the upper side, one on the lower side. The purchase price is $120k for all 3 with $3k in repairs needed. The rents are 2500 combined (875 for the upper side ones and 750 for the lower side one).
I don't know the area and would love your advice. My goal here is high cash flow properties and I'm not banking on any appreciation. If you know the area, what are your thoughts on a stable renter base? I'm factoring in 5% for vacancy, 10% for repairs (they are 1920 homes), and 5% for capex (2 are newly remodeled and the 3rd is a year from having been remodeled).
Investor · Pittsburgh, PA · Member since 2015 · 1k+ posts · 1k+ votes
8y
@Scott Hawley New Castle is rough so be careful. There is a reason you are getting such a good deal. High cash flow is hard to come by. Not impossible but difficult. On paper the less desirable areas will cash flow but in reality after you factor in all the other BS that goes with that type of portfolio your patience can and may run thin. Not saying dont buy but make sure you do your homework and account for lower rents and higher expenses and vacancies just in case.
Investor · Westport, MA · Member since 2013 · 10 posts · 8 votes
8y
Scott,
I've invested in New Castle, PA since 2011 and can share with you a ton of information. I've posted a few articles in the past on the good and bad of the area. In the interest of full disclosure I have a seven property (8 unit) portfolio up for sale with an asking price of $189K. Gross rents per month are $4130 and require no capital expenses or repairs. Five of the seven units have new roofs with numerous other capital investments. Depending on the repairs you're considering I find 10% to be a low estimate. Also I'd be suspect of the vacancy rate of 5%. I trade off vacancy rate for quality tenants so I keep my places empty rather than suffer the constant turnover of tenants and the associated turnover costs. I have documentation to substantiate all my data. I want you to fully understand this market before you make an investment and and can share with you one man's perspective.