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User Stats

73
Posts
41
Votes
Brandon Morgan
41
Votes |
73
Posts

buying rental properties in Pennsylvania

Brandon Morgan
Posted

Hi all I am looking to buy My first property for rent. I am new to real estate. I Live in jersey and the Prices seem to not be going down here and there is little to no inventory So I started to look at Pennsylvania. Pennsylvania specifically the Scranton area seems to have more options and the prices are better. looking to buy a multifamily for rent or even a flip depending on the numbers. Does anyone have any experiences with Pennsylvania? is it worth it? does anyone know about rental properties in that area? any advice on the matter would be great. open to any suggestions. 

User Stats

91
Posts
35
Votes
Dan Marriggi
  • Rental Property Investor
  • Scranton, Boston
35
Votes |
91
Posts
Dan Marriggi
  • Rental Property Investor
  • Scranton, Boston
Replied
Welcome Brandon - I have properties here in the wyoming valley.
I am a native to the area.
Scranton has many hoops to jump as an investor - esp. an out of the area investor.
One is you'd have to hire a property manager if you do not live in the city of Scranton or within 20 miles of the city.

Real estate taxes are high -that plus the current interest rate and ask prices makes cash flow an issue.

You can find "deals" but please do your due diligence.
Here is an example of a potential deal I am evaluating in the hill section of the city: 20 y/o, 2000 sq ft. 3b/3bath TH - Needs paint, new carpeting, and general wear and tear repairs after a 4 year tenant. Ask price off market: $250K, No HOA, rents approx: $1900-2100/month, RE taxes approx : 7400/year, Property insurance : $1200/year, Misc fees trash,rent registration etc : $400 / year
Evaluate this and let me know your thoughts.

User Stats

73
Posts
41
Votes
Brandon Morgan
41
Votes |
73
Posts
Brandon Morgan
Replied

Is this just a single family? based on what I looked at with the calculator the mortgage is around $2400 monthly not including extra fees. if rent is around 2000 a month you'd definitely be under. I mean maybe if its fixed up it could add some value but it seems to be negative. but My math could be wrong I'm still new to this haha. what would you do in this situation? 

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User Stats

73
Posts
41
Votes
Brandon Morgan
41
Votes |
73
Posts
Brandon Morgan
Replied
Quote from @Dan Marriggi:
Welcome Brandon - I have properties here in the wyoming valley.
I am a native to the area.
Scranton has many hoops to jump as an investor - esp. an out of the area investor.
One is you'd have to hire a property manager if you do not live in the city of Scranton or within 20 miles of the city.

Real estate taxes are high -that plus the current interest rate and ask prices makes cash flow an issue.

You can find "deals" but please do your due diligence.
Here is an example of a potential deal I am evaluating in the hill section of the city: 20 y/o, 2000 sq ft. 3b/3bath TH - Needs paint, new carpeting, and general wear and tear repairs after a 4 year tenant. Ask price off market: $250K, No HOA, rents approx: $1900-2100/month, RE taxes approx : 7400/year, Property insurance : $1200/year, Misc fees trash,rent registration etc : $400 / year
Evaluate this and let me know your thoughts.
Is this just a single family? based on what I looked at with the calculator the mortgage is around $2400 monthly not including extra fees. if rent is around 2000 a month you'd definitely be under. I mean maybe if its fixed up it could add some value but it seems to be negative. but My math could be wrong I'm still new to this haha. what would you do in this situation?

User Stats

73
Posts
41
Votes
Brandon Morgan
41
Votes |
73
Posts
Brandon Morgan
Replied
Quote from @Dan Marriggi:
Welcome Brandon - I have properties here in the wyoming valley.
I am a native to the area.
Scranton has many hoops to jump as an investor - esp. an out of the area investor.
One is you'd have to hire a property manager if you do not live in the city of Scranton or within 20 miles of the city.

Real estate taxes are high -that plus the current interest rate and ask prices makes cash flow an issue.

You can find "deals" but please do your due diligence.
Here is an example of a potential deal I am evaluating in the hill section of the city: 20 y/o, 2000 sq ft. 3b/3bath TH - Needs paint, new carpeting, and general wear and tear repairs after a 4 year tenant. Ask price off market: $250K, No HOA, rents approx: $1900-2100/month, RE taxes approx : 7400/year, Property insurance : $1200/year, Misc fees trash,rent registration etc : $400 / year
Evaluate this and let me know your thoughts.

 I mean based on what I've seen it still seems a lot better than what I've been seeing in New jersey. I wouldn't be able to get something like that for anything less than 500k here. 

User Stats

409
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406
Votes
Tanner Lewis
Pro Member
  • Lender
  • Austin, TX
406
Votes |
409
Posts
Tanner Lewis
Pro Member
  • Lender
  • Austin, TX
Replied

I've done quite a few deals in Pennsylvania. Many of them have worked pretty well as rural STRs, I have also seen a few LTRs, but honestly not a lot of flips. The BRRRR strategy works pretty well in some PA submarkets.

User Stats

73
Posts
41
Votes
Brandon Morgan
41
Votes |
73
Posts
Brandon Morgan
Replied
Quote from @Tanner Lewis:

I've done quite a few deals in Pennsylvania. Many of them have worked pretty well as rural STRs, I have also seen a few LTRs, but honestly not a lot of flips. The BRRRR strategy works pretty well in some PA submarkets.

Since that part of PA is over an hour from me I was thinking more Long Term Rentals for my strategy. but at this point whatever works best and I can find a good deal. 

User Stats

409
Posts
406
Votes
Tanner Lewis
Pro Member
  • Lender
  • Austin, TX
406
Votes |
409
Posts
Tanner Lewis
Pro Member
  • Lender
  • Austin, TX
Replied
Quote from @Brandon Morgan:
Quote from @Tanner Lewis:

I've done quite a few deals in Pennsylvania. Many of them have worked pretty well as rural STRs, I have also seen a few LTRs, but honestly not a lot of flips. The BRRRR strategy works pretty well in some PA submarkets.

Since that part of PA is over an hour from me I was thinking more Long Term Rentals for my strategy. but at this point whatever works best and I can find a good deal. 

That makes sense. I suggest looking for more turnkey properties if that is your priority

User Stats

91
Posts
35
Votes
Dan Marriggi
  • Rental Property Investor
  • Scranton, Boston
35
Votes |
91
Posts
Dan Marriggi
  • Rental Property Investor
  • Scranton, Boston
Replied
Also remember that prior to Covid, Appreciation of our RE here was not great.
We were a cash flow market NOT an appreciation market. I don't believe we will see the price jumps going further. Probably a more normalized market gain of a few percent per year.

I think you should find a turnkey property as mentioned and hold it.
I'm happy to help if you have any questions or if you want to run some numbers.

User Stats

7
Posts
3
Votes
Emmanuel Ojo-Powerson II
  • Wholesaler
  • NJ NY PA, MD
3
Votes |
7
Posts
Emmanuel Ojo-Powerson II
  • Wholesaler
  • NJ NY PA, MD
Replied

Hello Brandon, hope you’re doing well. I do have some off-market properties within the Scranton area. Looking forwards to connect with you and to collaborate. 

User Stats

42
Posts
32
Votes
Kate Daye Ruane
Agent
  • Specialist
  • Scranton, PA
32
Votes |
42
Posts
Kate Daye Ruane
Agent
  • Specialist
  • Scranton, PA
Replied

Hi Brandon! I'd love to work with you on investing in these markets. You aren't going to find more sounds deals than the Scranton Area IMO when looking at ROI and stability / appreciation. I Invest here and surrounding areas and also in Florida, but none of them perform as well as Lackawanna County.I'm AWFUL at checking BP regularly (hence while I'm just seeing this, I'm so sorry!) So if you want to chat call, text, or email me direct anytime.

I've closed over 500 transactions in the last few years, with 75%+ of them being with NY investors, and not a SINGLE one of them have an ill-performing property. 

User Stats

7
Posts
2
Votes
Jane Trust Ryan
Pro Member
  • Real Estate Broker
  • NY/NJ/PA
2
Votes |
7
Posts
Jane Trust Ryan
Pro Member
  • Real Estate Broker
  • NY/NJ/PA
Replied

I am also looking to invest in the vicinity of Scranton/Wilkes Barre.  I have been running a lot of test cases but have not leapt on anything yet.  It seems to me that if you can find a value add it can happen.   

One of the things I am thinking about is the solvency of the University of Scranton.  I am an alum, so I am of course biased, BUT it is a big driver there.  Anyone have any insight on how to investigate something like that?

Further....  what is your feeling on % appreciation going forward for both rent and price.   I am doing math and think the % I am getting are too high....

User Stats

91
Posts
35
Votes
Dan Marriggi
  • Rental Property Investor
  • Scranton, Boston
35
Votes |
91
Posts
Dan Marriggi
  • Rental Property Investor
  • Scranton, Boston
Replied
Jane - Great questions.
Regarding the U - They recently broke ground for another new building - I think they will be around for awhile. They also have a very rich donor as well as others.

The properties in the area typically did not appreciate well - they did cash flow however.
Since C19, prices have jumped significantly. This makes cash flowing properties hard to come by imo.
Several of my local investor club buddies are sitting on the sidelines, selling some inventory and building a cash hoard.
Happy to help with info - as always - do your due diligence and do not blindly listen to some random poster on web sites.
Good luck
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User Stats

42
Posts
32
Votes
Kate Daye Ruane
Agent
  • Specialist
  • Scranton, PA
32
Votes |
42
Posts
Kate Daye Ruane
Agent
  • Specialist
  • Scranton, PA
Replied

Jane -- I would recommend narrowing down a strategy in regards to importance. There are tons of properties here that cash flow super high on paper, but they wouldn't be my cup of tea. To each their own. Then you have one's that you can force appreciation / value-add, and also the ones in the neighborhoods that will simply continue to naturally appreciate with your regular maintenance. The "wilkes barre / scranton" market is SO big contrary to what one would think - while it's not as populated as a city like Philly or Pittsburgh, those two areas cover a vast amount of land and each neighborhood has it's perks. You're looking at a dozen neighborhoods in Scranton alone that each differ, and dozens of municipalities surrounding. 

In regards to the U, I don't think it's hurting by any means and seems the most stable out of it's local competition. Though I will say, as an owner / specialist in local student housing, student housing wouldn't be my play right now especially for a first-time investor. You can get good numbers residentially.

Feel free to let me know if you have any questions on a specific area or property.