All Forum Posts by: Anthony Angotti

Originally posted by @Nick Gerli:

Building Permits provide a snapshot into what the supply pipeline (new homes and apartments) in a market will look like in 12-24 months time. The more supply dropped into a market, the more growth needed to keep occupancies and rents up.

The graph below shows Building Permits as a % of Existing Housing stock in select markets. 

I'm curious what everyone thinks about this information. Would you be concerned investing in a market like Austin or Nashville given how much permitting there has been lately? Or do you feel like those markets will register enough growth to cover the increase?

Meanwhile, are Pittsburgh and Columbus good markets to get into right now? While their growth rates might be lower, you might feel more confident in the existing rents and value levels given how little supply competition there is. 

This data was collected from the US Census, which conducts a monthly building permit survey for every US metro. 

 Does population and job growth support the growth? If it does then nothing to worry about. If it does not then there's cause for concern. 

Pittsburgh is definitely nice to invest in because there's not a ton of increase of supply in rental units and we have a good percentage of the population as renters. 

If there are places that work for BRRRR, but not many people then I would focus more on that strategy than wholesaling. There's a strategy that works everywhere, but you have to work with what you have.

There are so many advantages to investing in your own backyard that I would definitely work it out where you are. However I would shift focus from wholesaling since it doesn't seem like a very viable business model based on what you said. 

 If you are a first timer finding someone who has done what you are trying to do is very beneficial because you kill two birds with one stone. You get an agent that knows what they are doing and a potential mentor to help you through your endeavors.

Cory S had some good points. 

I would recommend an owner occupant house hack as your first deal. It will be easier for you to qualify for. 

Is your current job mostly commission? That may make things a bit more difficult, just a heads up. 

Locate one of the most prominent wholesalers in the area and offer to do some work for them for free. A lot of them would have you knock doors, put up signs, etc. 

You can learn well that way and if you keep at it they will likely be more then happy to help you. 

 Contact the section 8 representative assigned to them and discuss the issues. 

Additionally you will learn over time that you'll be threatened to be sued in this industry many times by many people. Usually over very stupid things. I had someone say they were going to have their lawyer contact me about a broken dishwasher because it's been broken since Saturday (It was the Tuesday right after and we had dispatched a contractor they just didn't get to it yet). 

As long as you do the right thing and dispatch promptly there's nothing more you can do. They can huff and puff all that they want but even if you did go to court as long as you did what you were supposed to do no bad will come to you. 

I tell tenants all the time when they are being unreasonable that if they'd like to pay their lawyer $150 to draft a letter and send it to me they are more than welcome to. It will end up in the trash. Then if they'd like to pay a lawyer $500 to meet in court then I am more than happy to pay my lawyer $500 to also meet them in court. And then the lease says that if I win then they have to pay my attorney's court fees. So then all that will come of them going to court is a bunch of wasted time by them, their lawyer, and my lawyer, of which they will have to pay the bill for. 

Now obviously if someone is a slum lord A LOT of bad can come to you. However if you have prudent operations to make sure the property is in good condition (inspections, routine maintenance, etc), follow the law as it pertains to landlord/tenant relations in your area, and dispatch maintenance in a reasonable time frame the threat of law suits and all the screaming is just hot air. 

Also, for what it's worth when I'm on the phone if they scream at me I usually tell them that if they don't stop I am going to hang up the phone and they can contact me by text or email only moving forward. If they keep going I repeat that and tell them that I will count down from 5 and if they aren't going to stop yelling and have a normal conversation then I am done with the call. They normally don't stop so I count down from 5 and then hang up . . . It certainly annoys them, but I usually don't get to that point because I keep as much communication written as possible. 

If you are just looking for the 1% rule then Flats would be good. I live in Dormont and have over 50 units in Dormont and it's great, but getting expensive. As a new investor avoiding the MLS will come with some difficulties unless you are self sourcing, and even then it can be challenging.

Number 1: When you are new you don't understand the process which can make it difficult to navigate. 

Number 2: If you buy from a wholesaler you typically don't have inspection contingencies and your deposit is often nonrefundable. 

Number 3: Off market is likely going to need to be a cash, or like cash, purchase. The caveat being if you are souring leads yourself and can find someone that will seller finance to you, which though you hear a lot about on the internet isn't as common in practice in the B class and above 2-4 multifamily type areas.

Some other reasons buy off market can be challenging for a beginner. 

Buying is a good decision vs renting anyway because you are building equity. If you house hack a 2-4 unit it's the best decision to get started in my opinion because the numbers don't need to be as good for it to still be a worthwhile investment. 

I would consider Pittsburgh and Pennsylvania average as far as being favorable to landlords as far as the landlord tenant act is concerned. 

Some neighborhoods in Pittsburgh can be annoying with code enforcement and registration/inspections, but there is no rent control or anything of the like and most municipalities are easy enough to work with. 

 Depends if the area typically have radiant heat or forced air. Some neighborhoods have mostly boilers so it doesn't matter. 

A/C rarely matters as much but you always just have to be looking at and considering the competing rentals in the area have. That's the name of the game. Depends on what the market is. You should never over or under improve. 

@Randy Hunter

A couple general things here. 

1. Lots of stairs unless it's a great deal. 

2. Places that have no off-street and no nearby on-street parking. Off street parking isn't necessary, but NO on street is bad. Limited on street parking is fine, but some houses that look like they'd pencil out nice just don't have any available parking. 

3. Main bathroom not being on the same floor as the bedrooms. 

4. Places that are poorly cut up so that they layouts are incredibly awkward. 

Outside of that there aren't many hard and fast rules. The benefit to Pittsburgh is that the bulk of the landlord have very outdated and poorly maintained buildings. So by nature of having a clean, decently maintained property, you are already better than the average competing rental. Exceptions are the top neighborhoods, but outside of those, the rental really just needs to look clean.