All Forum Posts by: Anthony Angotti

The one I live in because the property will be managed with the most care and long term success if I manage myself and learn the ins and outs of management. Then even if I invest out of my home market I will know what goes into overseeing a rental property and can better evaluate and manage the manager. 

Hey Joshua,

I'm not an attorney and you should consult one. If you want my attorney's contact info I'll be happy to provide it just message me. He's done a few seller finance agreements for me in the past. 

You are looking to assume her mortgage it sounds like. If you want to officially do this you'll need to make sure the mortgage is assumable. You could also so a lease option agreement. Lease option would probably be the easiest in this case I would think if the mortgage is not assumable. A lot of conventional mortgages are not assumable.  

These could all become messy options by the way, the simplest option is to outright purchase and just rent to her. That way there aren't any issues in the future personally. Everything is peaches with friends and family until something goes wrong. . . It's easier when there's a clear arrangement up front about who owns what. 

 Are you looking for all in of 60k or just the purchase price? If all in and you need it to be turnkey you are going to be limited to mostly "D class" type properties. Though if I'm being honest Pittsburgh doesn't have that many neighborhoods that I would consider dangerous, just those that a bit more run down and lower income. Those would be "D Class" in Pittsburgh. 

Some spots that actually work with and OK tenant pool in the 0-60k SFH price range. Overbrook, WIlmerding, Natrona Heights, Part of Turtle Creek can be OK, Crafton Heights, Parts of Carrick, and some others.

I own a little over 100 units now and can say that I got out of anything that I had in that price range because it was pretty management intensive and you can find good tenants, but it just takes longer. 

I always say that finding good tenants is more your practices than the area, and that's true, but the worse the area the longer you have to hold out for them and the nicer your place has to be to attract them. 

@Josh Deeden

Pittsburgh is a fantastic place to house hack.

Plenty of small multifamily and a good number of renters with great price to rent ratios.

Prices have gone up and taxes can be a bit high but the rents typically offset it even in the nicer areas. Especially if house hacking and self managing. You can also find deals in a variety of areas that work for pretty much any kind of real estate investing (though becoming harder to find flips and BRRRR has been tough pretty much all over the nation and pittsburgh is not excluded.)

Well of course, but a $1200 a month SFH won't cost $1100 a month in fixed costs. We are talking like a Beechview SFH at maybe $120k. Which would probably cost around $650 a month in non variable expenses (basically PITI on a 30 year note). Call it $800 if you have to do a commercial loan. But then you're not buying that deal.

Thats not a great deal, but I'd rather have that then a $750 a month rental in Mt Oliver that cost me $50k. Fixed monthly costs on that would be somewhere in the avenue of $400 a month. 

But then as soon as you actually save appropriately for capex, management costs, vacancy, etc. You're probably negative on that cheaper one or close to break even. A house in Pittsburgh costs MINIMUM $200 per month in capex plus repairs. And often ends up being a little more. 

So even the bad deal in a better higher rent area ends up being better than an average deal in a lesser area. 

If you can pick up these houses in areas like Mt Oliver for 10-30k that don't need much work that's a different story. But that's not the norm. If you're buying things in reasonable condition at reasonable prices then the better, higher rent areas are generally the better bet for a number of reasons. 

@Nico Savoia

Are you local or out of state. I think it can work if you manage it yourself and do a great job screening, maybe do section 8, etc.

However I wouldn't trust a property manager to manage effectively in this area personally unless it was on one of the better streets and a well maintained building.

Every area has good tenants, you just need to manage your investment properly to find them, however mt Oliver has a lot of metrics regarding crime, income, lowly ranked schools, etc. that make it a very management intensive area.

I wouldn't buy or manage there unless you had some experience managing in similar areas or are willing to gain the hard experience of doing so. If you do that then investing in these kinds of areas can be very lucrative cash flow wise. However the values don't go up and Mt Oliver doesn't have anything going for it that would make me think appreciation is imminent. So youre going to miss out on all the long term benefits of RE investing.

Additionally major repairs cost the same if your rental is $500 or $1200. So when you need to replace the roof which one would you rather have?

@Liam OKeefe personally I think that buying something nearby will help you learn the business and give you the tools to help you but OOS. You'll also be a better evaluator of your core team for your out of state purchases.

So I think that while the deals may be better OOS your education as an investor, and thus your confidence, will be better served buying near you first.

 Construction permitting process is going to be a mess I would think. 

Every time I've seen someone go down this path it is either unsuccessful or the juice was hardly worth the squeeze. 

There are exceptions with people that make it work, but the process in the city of Pittsburgh for construction permits and these kind of permits is a nightmare. 

 This is kind of entertaining to read because in my market people are miffed if they can't find 2% rule deals!!!!!!

Anyway there are so many more reasons to investing than just straight cash flow (though IMO you should never buy a property that doesn't at least break even after all of your costs). Principle paydown, appreciation, tax advantages, etc. 

If you are after cash flow and your market doesn't offer it you either need to 

A) Put in more effort to find deals that work, or put in the effort to build a network that will find you deals that work. Though if you are after deals in your market with much better numbers than what you see you're unlikely to have someone give that to you. If you want slam dunk deals you most always need to find the sellers on your own. However the vast majority of people build their RE on singles and doubles and then wait. Id rather find a way to buy 10 singles and doubles in one year than one home run personally. The advantage to investing at this time is that interest rates are ludicrously low. You'll build much more wealth buying 10 average/above average deals than holding out for 1 slam dunk each year. The road to wealth in real estate is a long one. That's why they say don't wait to buy real estate. Buy real estate and wait. 

The only caveat is that I don't believe in buying deals that cash flow negative. There should at least be something there after you've factored in all your expenses. If you otherwise have a very strong income and don't need the money then I suppose properties with no cash flow can work in high appreciation areas, but that's a risky game if you aren't independently wealthy enough to eat that year over year. 

B) Find a creative strategy in you area that does work for cash flow (Air BnB, Finding some niche strategy you can apply like adding units or renovating properties with big issues like bad foundations).

C) Invest in a different market. 

 Still a Realtor yes. My team does between 50 and 70 transactions a year most every year. 

My unit count is about to go over 100 with the next purchase. 

I did a post for 2019 here; https://www.biggerpockets.com/...

I will likely also do one for 2020 though that was a bit messier of a year haha