is scranton PA a good market?

Question

okay so sorry to everyone that i haven't been on here to update a discussion i had going, been working like crazy lately.

at any rate,

i'm ready to buy in Scranton PA. as i was doing my research over and over as i usually do for constant reassurance. i came across some very negative things about the scranton area and am now concerned.

i've seen that they are bankrupt, 200+ million in debt. ive read things saying its a dying city. i've even read something comparing the area to detroit.

all of these things make me very nervous to buy in the area.

so id like to hear from anyone who, either lives or invests their. is it declining ? do you think it will come up ? maybe a government bail out? future growth ? i still feel and have always felt that being a big city, with a university, hospitals, an airport, and not so far from NYC.  that it has potential in the future for appreciation.

any info would be helpfull thank you !

Erik Richards · Answer

The Government in Scranton and Lackawanna County can't get out of its own way. Is been like this for as long as anyone alive can remember. I don't think this area was effected by the 2008 crash because they are conservative. I believe they escaped it because they didn't realize it was 2008. They are still living in 1962 and JFK is the President.

I don't think Scranton expects a Federal Bailout anytime soon. The last major industry was coal until the mines flooded in 1959. Feds are anti-coal now so they won't support that. Any other large projects that come across the table get chased out by a few elite class that control the city and the county. The Universities and colleges are the only big employers in the city, and their salaries are weak compared to other cities like Allentown, Philly or NYC.

When people talk about Scranton, they are generally referring to the valley cities. There are a lot of good cash flowing, low taxed and regulated areas in the valley cities. Expand your map a bit around Scranton and take a peak. There are a few areas outside the city that are more investor friendly along with Luzerne county which is showing promising growth in some areas.

Adam Guiffrida · Answer

Craig,

I found it funny that you were able to pull up my links. These cases were mine. I sued the City for excessive fees for rental registration. Last week council has repealed all of its previous rental ordinances for rental registration. The new rental registration passed has removed all property inspections as well as the $150 per building fee. The good news is that we have won our class action case and the City has conceded with this new ordinance. But the funny thing is that I still have the injunction which means the city cannot collect any more funds for registration until this case is completely resolved which is most likely a year.

Secondly, we are about a month away from filing the same class action case against Scranton for its excessive garbage fees. We feel fees should be cut from $300 per unit to $150 per unit. This is a significant to all property owners especially multi-property owners.

Scranton is a disaster at the moment but I have great faith in its future potential. As I am very political, it will take the right leader to turn us in the forward direction.

Stephen Franco · Answer

I am a longtime resident (from Boston in 1996)

I have been investing in the Northeastern PA area since 2004

As an investor, and realtor, and wholesaler here I can CONFIDENTLY say:

Scranton city is the hardest community to work in for our region.  Still easy compared to other places in the "real world" outside of Northeast PA, but harder

Most of my investors buy anywhere but the city, but several do really well

My clients who lend me money for private lending do REALLY well without owning

(10-25%)

My clients who buy through me usually net after maintenance/vacancy/management pad of 30% (total) about a 15% cap rate.  Low end is 10, high is 25

I am currently bringing on 18 off market units, rented and in good shape with low costs.  Gross rent 130k, asking 330k including fee.  Buyer pays closing costs (transfer taxes and related)

An example deal:

income

2150

1999

mvm

645

3299

expenses

7692

2244

noi

17463

150

value

134330.769

0.13

cap

4000

roofs

5000

driveway

5000

misc

120330.769

mao

12033.0769

0.1

cmsn

6016.53846

0.05

closing

102281.154

max offer

Frank Casi · Answer

To Stephen I might be interested in getting into the lending game..just concerned how is the money I lend cholaterized.Also just started looking into Scranton and surrounding areas for investment properties.

Craig Osborn · Answer

I have been looking at the Scranton area for the past 6 months.  I am active in other markets, but havent pulled the trigger on Scranton / Wilkes-Barre yet.  Like any market - there are good deals and not so good deals.  I have found some attractive properties near Marywood U. that would provide decent cash flow.   Scranton has some pain in the rump processes and fees that you have to consider.  Here are two examples in the news :  http://thetimes-tribune.com/news/landlord-fights-s...

AND

https://www.youcaring.com/adam-guiffrida-dba-fight...

Look at their ordinances in regards to condemned properties.  They are quick to condemn properties for various reasons.  Also - be careful with mulitple units.  I have found very attractive 3 unit properties that can only be licensed as a two unit because of parking limitations.

The city is broke but their finances are improving.  The city is relatively safe.  I will probably continue to look for the right deal there and I personally am not afraid to invest there.

Good luck - Craig

Nicholas Weckstein · Answer

yeah being from new york, as a friend put it, has me brain washed. im not ever going to see appreciation in scranton like new york has. im just looking for a stable place to make some positive cash flow and hopefully maybe in 30 years make some money if/when i sell. just worried about the market tanking. may buy just outside of the city. @Timothy Maloney

Timothy Maloney · Answer

I like Scranton, PA.   I'm always amazed how much investors love my market of Syracuse, NY with Scranton/Wilkes Barre so close with comparable demographics and better schools.

The people of both Scranton & Syracuse are more conservative than most of America (which is why in 2008 neither area saw the deep declines in home values like FL, AZ, CA, and NV.)  You'll never see appreciation even close to the national average but you can cash flow nicely and enjoy relatively stable property values.

is scranton PA a good market?

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