All Forum Posts by: Jeremy Lee

The Oakland market is very saturated, unfortunately students are rough on places and you experience quite a bit of turn over. 

On the other hand, there is a student real estate investor club at Pitt, open to all. PM me for details.

Hi Jessey,

There are plenty of people who regularly virtually wholesale places. Technically, you don't need anyone on the ground to wholesale a property; however this is often very difficult. After you find a property without anyone who has an interest in the property you just need to get the owner(s) to sign a contract with an option. Then you can market the property and sell it. 

So the only people you need are a motivated seller, a buyer and a closing company familiar and willing to work with wholesalers. This is the bare minimum; however I would recommend adding more members - someone to negotiate with the buyer and someone to take pictures of the property. Its hard enough to explain optional contracts to owners in person, let alone over the phone. I wouldn't worry too much with finding ARVs and estimated repairs, if your target is experience flippers and landlords, they should have an idea of how much they are willing to pay based off pictures.

If you've found the right place for the right price, you have several options:

1. Make your own team, salaried employees to negotiate and walk the property, however these systems are difficult to build however this will give you a good amount of profit

2. Partner with a local wholesaler to put the place under contract; however you run the risk of getting cut out.  

3. Partner with a flipper on the property, but again this runs the risk of you getting cut out

4. Sign the contract with the owner and hire someone to take pictures, this will make you the most amount of profit

If you can do option #4, this will be the most amount of work, but is how most larger virtual wholesalers work - hire someone who knows nothing about wholesaling to go and take pictures, then get the owner to sign an optional contract.

My suggestion would be to call some reputable closing companies and see if they work with wholesalers and flippers, they could probably give you insight into the character of the people who might be interested in your deal and connect you to someone who is interested. Also they shouldn't be too interested in cutting you out, they get paid the same amount whether you are part or not part of the deal. They will make more money if its a double closing. 

Atleast in PA, unless you record the optional contract, there is still a possibility someone else can buy the property despite the fact you have an option to purchase. Unless you are making a good amount of money on the deal, its not worth taking costly legal action. Most wholesalers just forgive, forget and move on.

Best of Luck!

Hi Ratesh,

I think there are several things to consider when evaluating markets to flip or hold. For rentals it depends if you are looking for cashflow or appreciation. There are several areas in the bay where you can get some cashflow, but these are typically cheaper areas - between Sacramento and the 580 corridor and some parts of the southbay, typically farther from city center. If you are willing to be cashflow neutral and possibly get some appreciation, this expands possible investment areas, however the most money is made in areas with high appreciation, if you can afford it.

For flips, I would typically look in areas where there are older, smaller properties. Projects can be found all over, but the highest barrier is the cash to initially purchase and rehab the properties. 

EPA has been a long time coming, since Ikea moved in the area really started to turn. I would expect the peninsula to do better than the east bay, but theres still money to be made in both locations. I don't have much advice for the next place that will explode, I wouldn't recommend betting on this as a strategy. 

My guess is the biggest barrier that would limit you is finances and locale.

Best of luck

Hi Cole,

Its quite difficult to research areas to invest in that you have never been to and rely on internet stats to evaluate. Personally, I haven't ever bought anything in an area where I've never visited; but I've met several people who have and have researched the area before buying and never visited. 

To know street by street, it will be hard work and a lot of research, but with enough persistence, you can find pockets and areas that are reasonable. Sometimes, you can do some googling and read about particular areas on sites like the city data forums. Often locals will post their thoughts, I wouldn't trust everything they say, but it might give you a reasonable idea. http://www.city-data.com/forum/

The next would be to find properties and start calling management companies, see what their screening requirements and minimum standards would be to manage that property. It is important to note that some PMs won't manage b/c its out of their area, whereas some won't manage b/c the area is too rough. After calling a good number of PMs, it should give you a reasonable idea of the location of the property and who will be living there. 

I've found that most remote investors who haven't visited their properties have better luck with B areas or higher. 

Best of luck,

Jeremy

Hi Mike,

Brighton heights is a ever changing area, there are parts where drugs and crime are rampant, specifically farther west and south. I would say its mostly street by street and the types of properties you are purchasing. I know some in the area who have good luck if they fix the place up and screen the tenants well. I think if you stick to the north with nicer properties they should make some great rentals. If you are in some of the not so nice properties, it might be a bit harder to get a great tenants.

Good Luck!

I would want to mention that rental season will be ending as soon as the weather cools down, if you are looking to start before the end of the year, depending on the area it might be hard to get quality long term tenants during the cooler months. If it needs rehab, maybe rehab during the cold months and rent it once it warms up; otherwise you are racing against the end of rental season.

Good Luck!

Hi Justin,

Wholesaling in Pittsburgh is a saturated market as far as very desirable areas. Once you get away from the city center into less desirable neighborhoods, the competition decreases; however thats not where the biggest profits are made. Pittsburgh is a large market with lots of housing stock in those less desirable areas. 

This is not legal advice and I would recommend you consult a lawyer, but an assignment contract is a popular thing to do in PA. Some people use double closings, its a matter of preference in terms of how comfortable you are with the process and the parties involved. 

Good Luck

Hi Samantha,

I'm glad you liked that area, there is going to be a lot of money that is going to be put into that area in the upcoming few years. 

The short answer and that one you don't want to hear is no. You won't easily find a property like that in that particular area. I'm not saying its not possible, but chances are the answer is no. You might get lucky with a tired landlord who has been maintaining the property for a while and circumstances now prevent them from owning the property, but such properties will not be on the MLS, no one is going to market them to you. You would need to seek and find such properties yourself. The problem is in such a desirable area, everyone wants to own a nice property that needs paint and carpet to make a couple extra bucks, this drives up prices hence the ability for the economy to support those who can gut and rehab a place.

If I were looking to live rent free, I would run the numbers on the rent and determine how much you can afford in monthly payments, this is your cashflow. From there, depending on how many expenses you are willing to pay, this dictates your mortgage payment and hence the price of a multi-family that you can afford. It doesn't matter how much it costs total, aslong as the numbers work out for you. This will probably limit the neighborhoods you can look at and help you narrow down where you can live. Run these numbers for retail or slightly below retail price, then search for properties that meet your criteria. Check zillow to see if there are properties that recently sold in that area for true price estimates of how much people are paying, not properties that are still for sale.

The longer you wait, the better chance you can get something for below market value, but you need to weigh how important it is to you to live there and the timeframe you can work with moving and relocation.

Good Luck!

You can probably find a place in some of the nicer areas that doesn't need to much work, force appreciate it a little bit and if you hang on to it for a while there might be some appreciate for you. I think a duplex or a triplex would work well for you, it will still cashflow, you will have a place to live and you can force appreciate it. Also if you install tenants and prove that they pay, sell it to a turn key place for a premium. 

@Alex Deacon suggestion is reasonable, he also has a monthly event where you can pick up nuggets of information. He will try to sell you on a couple things, but its not a hard sell or anything, a small price to pay for information.

Hi Samantha,

Welcome to PGH. I think lots of what you are looking at has to deal with the era that these properties have been built in and the types of modernizations that are coming to PGH. Each wave of people moving in had new things built. The first wave was the steel mills and industrial age, this created lots of developments around the same time. After the hospitals got big and tech moved in starting in the mid to late 2000's, this let to a new wave of people moving in and causing more revitalization, hence renovation. Since it is all timeframe dependent, that is why you are seeing the two ends of the spectrum. It also has to deal with the area, Lawrenceville and Bloomfield recently turned over, within the last 5 years. This means that lots of properties are either of the old era, quarters for a different social economic class of people and lots of properties have been redone for the new era, representing a new class of people. This is what you will find in the city, to find that middle ground, you need to go to the suburbs. Most of the city is very old and the buildings remain from that timeframe, anything new was built within the last decade due to the economic cycle of the city.

If you are looking for more middle ground, look to the suburban areas, Wexford, Cranberry and Bethel Park, these areas have developments from the 80s and 90s and do not have the funky layouts that you see. These are really nice areas, but you can find places and houses that rent for a $2000 on the low end.  These are A/A+ areas.

If you go to like Westview, Bellevue and parts of Brighton Heights you could probably get a nicer house for $1200/1100 per month. These are basically B areas, depending which parts you are in. Some are row houses, but you can get a nice free standing house that is in decent condition for this amount. I know someone who recently redid a house near fineview and wanted $1100/mo, not the best area but really nice house.

If you area near allegheny hospital, there are a couple newer townhomes in the north side ($1100/mo) and some nicer homes between milvale and etna, they aren't row houses, rather standalone houses for about ($800/mo).

Again everything is location dependent, and that dictates the type of housing stock you will find, hence the types of apartments available for rent.

If you are looking for a place that needs paint and carpet to buy and rehab, you probably won't find these places in the 'hipster' areas, many of these places are old and need lots to rehab, these would exist in the suburbs with not great margins. Ultimately, it depends on what your goal is, do you want to rent? Or do you want to do a live-in-flip? Let me know your criteria and we will try to help you find a suitable area.

Best of luck,

Jeremy