All Forum Posts by: Blake McLaren

Ok, so I've been analyzing potential deals for 2 months (maybe 40-50 total) or so and am getting an itchy trigger finger for my first deal. This popped up on our local REIA site and is bring sold by a large buyer/holder of SFR's in the Pittsburgh area. I'd like to start a rental portfolio, though I'm open to flipping properties along the way. Here's what I have on this....

Purchase price = $20,000  (it's a 3/1, and one half of a duplex)

Repair/closing/holding costs = $46,500 (it's also a dog, though has great bones, no foundation issues, and no "major" structural problems, just needs everything)

ARV = $80,000 (maybe closer to 90k, trying to be conservative with all numbers)

Rent = $1,100

Vacancy = 8%

CapEx = 5% (since most all work will be completed)

Repairs = 5%

Ins = $55/mo.

Mgmt Fee = 10% (to pay myself)

Property taxes are currently $125/yr., though will increase in year two to aprox. $750/yr

This is by far the worst property on a great street, probably a "B" area with many young families who are buying properties in the area.  I would pay all cash initially, and then re-fi for 15 years at 4.875% for 65k which leave me with $510/mo. mortgage.  Looks to bring in $186/mo profit until year 16...

It's my first property, so it would be jumping in head first with respect to the rehab, though I'm comfortable w/ managing it and working w/ contractors, which I have already identified.

This will go fast.  They already have an offer on it, so any feedback would be appreciated!!

Thank you in advance,

Blake

Chad,

Check out new Choice Home Decoration Inc., Mckees Rocks.  I haven't used them yet myself, though they're around $30 sq/ft and work with a number of investors in the area.  Not sure if they'll go to Greensburg or not.

Good luck

Chris,

I think you're probably on target for your cap rate estimation as well as vacancy (currently just under 5% for 2015).  Take a look at some of the new builds, specifically in East Liberty and downtown.  Historically Pittsburgh has been able to absorb aprox. 300-500 new units with affecting rental prices, though there are 5000 slated to come online over the next 4-5 years.  A few of the larger companies in town are already beginning to see a compression in their prices, and slightly higher vacancies and it's a trend that will probably continue for a few more years until things even out.  Just to be frank, many renters are asking themselves if they would rather live in a brand new building or a 100-130 year multifamily.  

Food for thought.

I would also recommend Wilke and Associates, LLP in Carnegie. David Cooke is a partner who mainly works with RE investors in the area. He will meet with you and see if there is a good fit first, and then make himself and his assistant(s) available anytime to you. I went in for an hour or so to learn QuickBooks and setup a few other things. Impressed so far!

Many thanks!  I'll keep everyone update as it progresses.

Hey there,

I just wanted to introduce myself and say hello to the BP community.  I've decided to take the plunge by leaving my old career and move into real estate investing, though I can't quite call myself an investor as I have yet to buy a property.  I'm looking to flip some properties until I can begin buying and holding, with a goal of eventually having a 30/70 split of flip to buy.  That said, my wife and I live in Pittsburgh with a couple of cats, 5 chickens, and a garden we love to work in.  She does great work as an attorney advocate for disadvantaged public school children in PA, and I'm looking to stay the money man =).  Feel free to reach out and drop a line.  Always open to meeting up and chatting with folks, catching a game in town, and seeing where this RE thing goes.

Best - Blake