All Forum Posts by: Alex Hileman

We've all been asked, "how's the market?"

My brokerage has been tracking the data from the West Penn MLS for the past 2 years, and I would like to share some of the highlights so that we all have some hard facts to lean on when answering this question. This data is for Allegheny County only and is tracked on a weekly basis. I hope this helps!

Total Active Listings: 2,349 (up 17% over last year)

Total Pending Listings in the Last 7 Days: 248 (1% down from last year)

Total Sold Listings in the Last 7 Days: 139 (1% down from last year)

Average Days on Market: 40 (vs 36 last year)

Average Sales Price: $359,167 (vs $335,323 last year)

Number of Price Reductions in the Last 7 Days: 688 (vs 606 last year)

Sales to List Price Ratio: 97.6 (vs 98.83 last year)

Number of Expired Listings in the Last 7 Days: 152 (exactly the same as this time last year)

Number of Agents: 8,518 (150 less than last year)

Interest Rates: About 7% (vs 7.875% this time last year)

Key takeaways: We're seeing more active listings and price reductions but less pending sales, resulting in a shift from a seller's market to a balanced market.

No, you cannot just change the locks on them. If they are still there after their lease ends, they are considered a "holdover tenant". Unfortunately, you will need to file for eviction if you don't want to renew their lease.

Is there anything in the lease specifically about renewing or a holdover? A lot of leases include language about the lease automatically renewing if no written notice is given. Read the lease thoroughly and consult an attorney if you are not sure.

Hi Brian, I like to look at Zillow, Apartments.com, and Rentometer. Most rental listings here don't go on the MLS.

I pick the closest comps and then compare the locations, square footage, amenities, finishes, etc. The important thing is to adjust accordingly because there usually isn't an exactly identical rental property.

The good thing about rentals is that you get feedback about your pricing quickly and can react accordingly. If you're getting overwhelmed with showing requests, then it's probably priced too low. If you're not getting any responses, then it's priced too high. 

It really helps to have someone local walk the property and neighborhood, but if that's not feasible for you yet I would at least "walk" the neighborhood virtually through Google Maps.

Lastly, I would join a Facebook group of investors and landlords in that specific neighborhood. You can find out about local events that impact landlords and renters in that area and also learn about the local standards. For example, do landlords in that neighborhood charge for coin operated laundry, or do they hold pet deposits? Do most of them include the utilities in the monthly fees? Are most of the renters students that move out when the school semester ends?

All of the suggestions above are helpful. I would add to ask for the rental payment history. There may be a lease in place for $1,000 per month, but the tenant could be 3 months behind and the seller's haven't filed for eviction because they want to keep their occupancy rate high in order to sell, or just don't want to deal with the hassle of going to court. They could be allowing a tenant to pay rent late each month, and that tenant will be expecting you to make the same exceptions for them. 

Obviously you will also want to walk all of the units physically during your due diligence period to see the condition of the apartments inside. This is also a great time to talk to the residents that are home. They usually like to share how long they've lived there and how they feel about their home. If they have been asking the landlord to fix something for weeks and it still hasn't been done, they will let you know.

As for finding a larger multifamily building, LoopNet and Costar are the largest listing platforms in our area. Multis are also sold off-market and your agent should be networking with other agents and investors and keep a pulse of who will be selling. I let other commercial agents know what my client is looking for to leverage their network of investors and help find a solution for my clients.

Best of luck!

Hi Davin,

You will want to word it as a deposit instead of 1st or last month's rent, because a tenant could interpret that as they don't need to pay you last month's rent.

Each state allows different deposits upfront, check in the area of your rental. 

In PA, landlords can't charge more than two months' rent as a security deposit in the first year. In the second year, landlords can't charge more than one month's rent as a security deposit.

Also in PA, landlords must put security deposits over $100 into an interest-bearing account and pay the interest to the tenant after the 3rd year of occupancy.

You can charge an up front pet fee or pet deposit and you can charge for parking, storage, utilities, or other amenities that you rent separately.

It will depend on your situation, but I hope this helps in general!

@Karolina Powell which group meets regularly? Is it the ACRE meetup?

Hey All, it looks like there's a lot of people here looking to meet and work together on a project. I know this is an older post, but are any of you interested in meeting up in person and getting something going? 

Unfortunately this is common with DSCR and commercial loans. Regulation Z does not apply to most commercial loans, and you do not have the same consumer protections as you would from a residential loan. The commercial lender is not required to disclose borrowing costs, interest rates and fees upfront and in clear language. It's really the Wild West.

Right now I am dealing with a DSCR lender that switched my client's product to a Bridge loan and gave him a very hard time when he asked for a copy of the appraisal. We've had to keep extending closing for weeks because his communication is almost non-existent. As soon as my client paid for the appraisal and signed up with the lender, he stopped communicating and has outright refused to contact the title company.

Commercial lenders are a nightmare. I would highly recommend going through a mortgage broker or finding a lender through referrals.

Welcome Tomer! Pittsburgh is an awesome place to invest and has been appreciating like crazy.

I like the suburban areas like Verona, Penn Hills, Aspinwall, Sharpsburg, Etna, Jefferson Hills, Carnegie, Green Tree, and Dormont. They've shown stable growth and they're affordable.

Feel free to reach out if you would like to talk about the Pittsburgh market more in depth. 

Best of luck with your search!

Hi Kayla,

If the seller accepts your offer then the offer is contingent. After the contingency period ends, then the property is under contract.

The contingency period is your time to get your inspections done and do your due diligence. At the end of the contingency period, you and your agent will let the seller know if you want to move forward with the purchase, if you want to terminate the agreement, or if you want to ask the seller to make repairs or issue a monetary credit before closing. Those things are negotiable between the buyer and seller. The seller may only agree to some or none of the things you ask for. You will then be able to accept, reject, or renegotiate. 

You will want your agent to add language into your offer that says "Contingent upon satisfactory review by the buyers" if you want to be able to terminate for something that's not inspection related. This is more common for investors who live out of state and can't see the property in person, so they get the property "under contract" and then send a contractor or inspector if their offer gets approved. 

The main reason buyers back out is if there major issues on the inspection report that they don't want to fix, or that the seller doesn't want to fix them. The seller will want to see proof of funds like a bank statement or a pre-approval letter with your offer, so that they know you won't back out due to financing. Other than the inspection report, there aren't a lot of reasons why buyers change their minds after submitting an offer.

Since these are legally binding contracts, you could be opening yourself up to be liable for losing your hand money and even paying the full purchase price of the contract you sign. I highly recommend working with a buyers agent or a real estate attorney, especially on your first purchase.

Please reach out to me if you want more help!